eMedia’s Financial Performance
For the year ending 31 March 2022, eMedia has experienced a resounding bounce back in its fnancial performance after the impact of the pandemic on businesses and the economy generally. This resounding bounce back is evident in a signifcant increase in proft from continued operations of R426.4 million as compared to the previous year’s proft of R138.5 million.
The year’s proft is also signifcantly better than the pre-COVID-19 year fiscal which ended in March 2020, which ended with an adjusted proft after adding back the goodwill impairment of R241.6 million. This fscal as compared to the pre-COVID-19 March 2020 proft shows a R184.8 million increase or a 76.5% increase and as compared to March 2021 is R287.9 million more and 207.9% better.
Revenue and Market Share
The Group’s revenue for the fiscal of R3.2 billion is the highest ever achieved, underscored by an increase in television advertising revenue to R2.1 billion. The television advertising revenue ended 39% better than the prior year and approximately 15% better than the market.
The Group beneftted from the resurgence of television advertising revenues as compared to the pandemic affected years which experienced a decline in advertising spend. This beneft in advertising revenues can be attributed to an increase in the Group’s prime time audience market share from 29.6% in March 2021 to 34.1% in March 2022, an increase of 15.2%.
Further analysis of the Group’s market share reveals an increase in both shoulder and prime time. The share ended at 31.8% and 34.1% respectively, making the Group the biggest broadcaster in audience share in both categories in South Africa.
e.tv
The increase in audience market share has driven up eTV’s advertising revenue. e.tv’s local dailies such as Imbewu, Scandal, House of Zwide and Durban General have driven the surge in market share in prime time. Edged on by this, management have invested in another local daily soap at 9.30 pm called The Black Door. With a few schedule changes Management is confdent of increasing market share.
e.tv may well be affected by the imminent analogue switch of facing the country but the group is confdent that the audience share will be carefully managed. At present the Group is awaiting a Constitutional Court decision on whether the switch off would be delayed giving more time to assist ordinary South Africans to be well accommodated and not be left without TV.
Openview
There has also been an improvement in the ratings of the other six channels produced by the group. eExtra, eMovies Extra and eReality rank in the top 15 of all satellite channels available in South Africa. A few more channels will be launched on the Openview platform.
This DTH unit of the business accounted for 21.9% of the advertising revenue amounting to R468.1 million which is up from R269.6 million in the previous year. Proftability in this unit has been achieved for the frst time with content costs for the fscal being pegged at R446.3 million.
The distribution of the four Openview entertainment channels on Multichoice, which contributed to the Group’s audience and revenue share, is presently under investigation by the Competition Commission after non-renewal of the channel carriage agreement. At the time of this report the channels remain on the Multichoice bouquet as a decision is yet to be received.
The set-top box activations for Openview are increasing on a monthly basis from an average of 35 000 per month to 40 000 per month. At the end of the period a total of 2 774 454 boxes were activated.
Technological advancements being the focus of the business will bring in the next upgraded phase of the Openview set-top box, a smarter set-top box which will have memory facilities and Wi-Fi capability.
eNCA
The news channel, eNCA, is the most watched news channel in the country, although it’s not offered on all tiers of the DSTV bouquet, whereas the competition is on all tiers. The advertising revenue targets were achieved through the pandemic affected years while its costs were carefully maintained.
The group has secured a further fve year agreement with Multichoice for the carriage of eNCA. The channel will remain exclusive to Mutichoice.
eVOD
In August 2021 eMedia launched an OTT platform, eVOD which has been well accepted in its target market. The number of registered viewers to date has been very encouraging with the average daily minutes viewed in excess of 1 000 000. The eOriginals offering on eVOD is the leading audience generator on eVOD making the group bullish about investing a further R100 million in local original content which will be amortised across the Group’s platforms and channels.
Other Subsidiaries
All of the groups subsidiaries which include Media Film Service, Sasani Studios, The Refnery, Cape Town Film Studios and YFM have posted better results having recovered from the COVID-19 years and all have returned to proftability.
Costs
Administrative and other costs have been well maintained although an increase of 19.7% has been revealed. This increase is mainly due to certain companies within the Group returning to 100% of salaries after reductions in the period of lockdowns and an increase in marketing activities after the lull brought on by the pandemic.
Cost of sales, which mainly consists of the cost of content, in the case of e.tv and employee costs in the case of eNCA, increased from R1 494.2 million to R1 748.1 million. Much of this increase is because of the bold step of introducing a new prime time daily “soap”, Durban General which launched in October 2020. This calculated risk was rewarded by the outstanding performance of the programme in its time slot. The fnancial year has also seen another new “soap”, House of Zwide replace Rhythm City. House of Zwide improved the group’s market share in the time slot. This increase in share of both of the new soaps underwrites an increase in revenue.
Proftability
The only asset of the group is a 67.69% interest in eMedia Investments the company that owns etv, eNCA, Openview, eVOD among other businesses.
The Group ended the year with a net proft of R420.8 million, which is inclusive of the loss of R5.6 million relating to discontinued operations, made up of losses from operations that the Group has considered non-essential and will be exiting or closing in the next fnancial year.
The above proft should be viewed in the context of the proft of the prior year of R107.9 million and an adjusted proft of R225.0 million in the year ended 31 March 2020. The year before the impact of the pandemic.
Earnings before interest, taxation, depreciation and amortization for the Group ended on R677.9 million compared to R302.9 million in the prior year, a 123.8% increase year-on-year.
Conclusion
The Group is forging ahead with numerous technology advances and strategic planning to continue to be the audience share market leader. The investment in Openview provides the Group with the strategic flexibility and is the plan to address the challenges of the transition that digital migration brings with it.
With the closure of non-core assets, the Group is now focused on its core business of broadcasting, content creation, platform advancements and a granular focus on technology that improves broadcasting.
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