etv's owner has lost R1.5 billion
CAPE TOWN - eMedia Holdings, the SA TV broadcaster that owns brands such as etv, eNCA, OpenView HD, and YFMon reported an operating loss of R1.54 billion rand for the period ended March 2018, from a prior profit of R242 million. according to its annual results.
Revenue decrseased to R2.2 billion from R2.3 billion it reported in 2017. Gross profit of R983 million was also lower than R1.2 billion in the previous year.
The group said it ended the period with a loss for the year from continued operations of R1.6 billion compared to a profit in the prior year of R112 million.
“Included in the loss for the current year is the impairment of goodwill of R1 501 million relating to the goodwill recognised upon the acquisition of eMedia Investments Proprietary Limited. Also included in the loss is the impairment of goodwill of subsidiary Coleske Artists of R31 million and an impairment of the investment in an associate company Da Vinci Media, of R64 million,” eMedia said.
Earnings before interest, tax, depreciation, and amortisation (EBITDA) for the group was R178 million compared to R405 million in the prior year, a 56% decrease year-on-year.
Headline earnings amounted to a loss of R12.5 million compared to a profit of R98 million in the prior year.
In addition, the group said it continued to invest in the Openview platform which remains loss-making.
“etv’s share of the broadcast audience remains under pressure, mostly due to the popularity of local dramas commissioned by the SABC. The group has implemented various schedule changes, including the launch of an additional local drama in April 2018.
“While the SABC commissions a substantial amount of local programming, at much higher cost than equivalent international content, our ability to commission additional local drama is limited by our production budget and profitability.
“Our schedule will remain under pressure while the SABC continues to operate under a subsidised regime; however, we are confident that our current schedule should arrest any significant decline.”
Additionally, Openview earned advertising revenue of R60 million and incurred content costs of R173 million, eMedia said.
The net operating loss of Openview amounted to R366.6 million, down from R394.5 million in 2017.
“While these programmes and channels will be loss-making in the beginning, they are part of the content that is required to promote set-top box uptake and viewership. Openview currently attracts about 3.5% of the television audience in South Africa and breakeven is estimated to be in the region of 6%,” it said.
The company said that Openview set-top box activations continue to grow at an average of 35,000 per month.
At the end of the period, a total of 1,149,217 (778,493 in 2017) boxes have been activated and a total of R74 million (R99 million in 2017) has been spent on retail subsidies.
The company also announced that an Afrikaans block of programming, including news and current affairs, would be launched.
Earlier this year, the group also caused distress and anxiety for etv and eNCA studios with some staff reportedly leaving the channels amid allegations of “constructed retrenchments”.
Employees at the Hyde Park studios have told The Star that eMedia Investments, which owns the channels, has been unfair to them by formulating retrenchments “fronted as reconstruction”.
“People are being exploited here. The team I’ve worked with for the past three years was told yesterday that they will not be needed by end of March but they are employed as permanent staff. The same was done at archives and IT departments. Reporters at eNCA are in distress. It’s a mess,” said an etv programme anchor.
The Star has also been told that some employees have already started packing while others have not reported for work since the new changes were communicated.
- BUSINESS REPORT ONLINE