MEDIA & ENTERTAINMENT
● While media companies saw some recovery in advertising revenue in 2021, the sector is still feeling the effects of the pandemic-induced lockdowns, which caused companies to cut their ad spend to preserve cash. That’s on top of pressure from internet giants, including Facebook and Google which, the Wits journalism department estimates, have taken as much as 60% of local advertising revenue over the past decade.
MultiChoice, the largest player in the sector, reported a rebound in ad revenues in its latest interim results. But it says it has yet to return to pre-pandemic levels. E.tv parent company eMedia Holdings has reported a similar trend.
Meanwhile, print and publishing company Caxton, which has been restructuring in the face of falling newspaper and magazine sales, has returned to annual profit after cost-cutting.
There would seem to be opportunity in video, radio and music streaming services. All SA’s major television broadcasters
MINING
2021 was a mixed year for mining: platinum group metal prices beat a hasty retreat, gold prices flatlined, iron ore surged and then slumped, and 2020’s go-go shares (like Sibanye-Stillwater) went nowhere, while coal producers had their unlikely moment in the sun precisely because of the green energy push.
It helps explain why the FM’s 2021 stock pick, Anglo American (up 44%, including dividends), was bested by Glencore, which rallied 68% thanks to its coal mining and trading business.
While many stock pickers are still punting Sibanye strongly, as well as platinum companies like Northam and Impala Platinum amid talk of an extended commodity super-cycle, the smart money may be in the less obvious miners listed on SA’s resources index.
Take, for instance, ferrochrome producer Merafe. Until 2012, SA was the world’s largest producer of ferrochrome (the key ingredient in stainless steel). Then Eskom’s soaring tariffs and unreliable now offer online viewing options: eMedia is adding a platform called eVOD to its portfolio; MultiChoice owns DStv Now and Showmax; and the SABC has a deal with Telkom to stream its television and radio content. power supply saw Chinese companies take the lead. Now, ructions in Asia and surging freight rates have ramped up the cost of ore reaching Chinese ferrochrome producers. That’s a problem SA doesn’t have, given that it
Restrictions on movement have also benefited companies that live-stream business, sporting and music events — GoToWebinar, Zoom, Microsoft, Corpcam and, locally, Telkom, with its BCX offering. is home to more than 72% of global chrome reserves.
While Merafe had a stonking year in 2021, gaining 185%, the price has yet to reach its 2008 highs of R4-plus. x