eMedia presents a satisfactory financial performance for the 2024 financial year given its mitigation against continued loadshedding, which had a negative impact on overall viewership and saw a further decline in television advertising spend of approximately 1%.
The actors and writers’ strike in Hollywood at the beginning of the financial year also had a severe negative impact on one of the subsidiaries in the Group, Media Film Service, which made R31.5 million less in profit after tax when compared to the prior year. The Group also continued its legal battles against Multichoice during the current financial year spending R8.8 million more in the current year when compared to the prior year.
Notwithstanding all the negative impacts to business operations in the macro-economic environment in South Africa, the Group was able to return favourable results and further continues with the declaration of dividends to its shareholders with a dividend of 16 cents per share at the close of the financial year.
Revenue and market share
The Group’s revenue for the fiscal of R3.1 billion is only 2.1% less than the previous year which can be mainly attributed to the decreased revenue earned by Media Film Service as mentioned above. This was further underscored by television advertising revenue ending on R2.165 billion an increase of 3% despite the television advertising cake declining by 1%. This is the highest television advertising revenue earned by the Group in its history.
The Group once again outperformed the market in terms of advertising revenue in the television market. This benefit in advertising revenues can be attributed to the Group maintaining prime-time audience market share at 33.5% in March 2024 from 34.5% in March 2023, a slight decrease year on year.
Further analysis of the Group’s market share reveals an increase in both shoulder and prime time. The share ended at 33.0% and 33.5% respectively, making the Group the biggest broadcaster in audience share in prime time and second to DStv in shoulder time in South Africa.
e.tv
The prime-time market share for e.tv has shown a slight decrease of 0.7% to 20.7% audience share. Of interest, however, is that e.tv is now the biggest channel during both prime time and shoulder time surpassing SABC1. The continued loadshedding saw a change in viewer patterns and this saw an impact on some of the shows. Scandal (19:30 to 20:00) and House of Zwide (19:00 to 19:30) continues to have a demanding market share in their respective timeslots with Scandal, however, coming into some competition with SABC1 moving Skeem Saam from its 18:30 slot to the 19:30 slot.
During the year, e.tv launched new dramas, Smoke and Mirrors at 21:00 to 21:30 and Isitha at 21:30 to 22:00. Both these dramas command the number one position in their timeslots. The 18:30 drama, Nikiwe was withdrawn from the schedule as it was not commanding a satisfactory market share and was replaced by a new drama, Isipetho, which has more than doubled the market share.
e.tv now spends approximately R600 million annually on local drama series and again shows the dedication of the Group to grow the local television industry.
e.tv continues to face the impact of the uncertainty of the imminent analogue switch-off facing the country but the Group is confident that the audience share will be carefully managed. At present the Group is once again engaging with the Department of Communication in relation to the switch-off date regarding e.tv analogue transponders. The Group is firm in the belief that too many ordinary South Africans will remain without TV in a hard switch-off environment.
Openview and multichannel
The non-linear eMedia channels continue to improve their ratings with eExtra, eMovies Extra and eReality which rank in the top 15 of all satellite channels available in South Africa. A few more channels will be launched on the Openview platform in the new fiscal year.
The rest of the eMedia channels, available on multiple platforms accounted for 26.9% of the advertising revenue amounting to R610.6 million which is up from R501.3 million in the previous year. Profitability in this unit has been maintained with content costs for the fiscal year being pegged at R325.6 million.
The distribution of the four eMedia entertainment channels on Multichoice, which contributed to the Group’s audience and revenue share, is still 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, and the court case is set down for August 2024. As mentioned, this has attributed to the year-on-year increase in legal costs.
The set-top box activations for Openview for the year amounted to 377 916 taking the amount of activated set-top boxes to 3 428 523 activated at the end of the period. 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
eNCA continues to perform satisfactorily in its targeting of the discerning news viewer. In an attempt to engage the viewer, the channel has changed its positioning from ‘No Fear, No Favour’, to ‘Question, Think, Act’. It also continues to be the leading advertising revenue generator in the news market.
Other subsidiaries
All of the Group’s subsidiaries, with the exception of Media Film Service, have performed exceptionally with Y ending the year on a profit after tax of R16.8 million, an increase of 6% year on year.
Costs
Administrative and other costs were well maintained, increasing by only 2.35% year on year. This increase is mainly due to marketing activities returning back to normal, increases in legal fees as previously discussed and the adverse impact of the rand fluctuation.
Cost of sales, which mainly consists of the cost of content, in the case of e.tv, employee costs in the case of eNCA, and cost of the Openview decoder sales, decreased from R1 629.4 million to R1 584.8 million. A significant portion of the decrease can be attributed to close control of content costs across the channels and the retrenchments to create efficiencies within eNCA.
Profitability
The only asset of the Group is a 67.69% interest in eMedia Investments, the company that owns e.tv, eNCA, Openview, eVOD among other businesses.
eMedia Investments ended the year with a net profit after tax of R353.2 million, compared to a profit of R404.7 million in the prior year. The above profit should be viewed in light of the continued loadshedding and the impact this had on the advertising cake, foreign exchange rate and the impact of diesel usage on the business, as well as the increased legal and marketing costs together with the impact of the actors and writers’ strike in faraway Hollywood.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) for the Group ended on R628.3 million compared to R667.2 million in the prior 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. The Group also intends to launch a number of digital developments to enhance its revenue generation capabilities and take advantage of our highly in-demand content.
The Group remains focused on its core business of broadcasting, content creation, platform advancements and a granular focus on technology that improves the broadcasting process.
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