Television advertising in South Africa is down 10% over the past year, entertainment group eMedia has reported.
On Thursday, eMedia Holdings (EMH) said the TV advertising market “has seen a decline year on year, which is a product of a tough economic climate, declining around 10%”.
“The market has seen consecutive monthly decreases since September last year, partly due to a decline in TV audiences,” the company said.
Worth R1.4bn on the JSE, eMedia owns television and radio broadcasting businesses that include eNCA, OpenView and Yfm, with production studios.
Unlike its rivals, eMedia depends heavily on advertising. In addition to advertising, DStv operator MultiChoice earns most of its revenue from subscriptions, while national broadcaster SABC, a state-owned enterprise, also takes in funds from TV licences.
The group reported that its advertising revenue decline was 3.4% better than the national average at 6.1% in the half-year to September.
Group revenue was 3.2% lower at R1.529bn for the period.
Despite the advertising decline the company’s profit measures improved. Operating profit rose 5.2% to R232.7m while profit from continuing operations was 18% more than the previous comparable period at R174.8m.
“This improved performance is due to the cost savings around the high beam satellite transponder space (the lease was cancelled last year), legal fees and effectively managing content costs,” the group said.
Earnings before interest, tax, depreciation and amortisation (ebitda) amounted to R284.9m for the half, compared with R282.8m in the previous period.
HEPS, which strip out the effect of one-off financial events, improved by 20.9%, rising from 22.42c to 27.09c.
A dividend of 14c per share has been declared.
In September, eMedia finalised its move to take full control of the entity that holds its stake in e.tv, having struck a deal with Remgro’s technology investment unit, Venfin, to do so.
Before this deal, EMH held about 67.69% of eMedia Investments (EMI), while Venfin held the balance.
Venfin Interco is an investment holding company that focuses on technology-oriented interests, formed in 2000 as part of a restructuring of the Rembrandt Group, in terms of which the group’s technology investments were held by Venfin Interco while traditional investments remained with Remgro.
In November 2009, Remgro and Venfin merged again, adding media and technology interests to the group’s investments.
The agreement was that Venfin would subscribe for shares in the group to the value of R59.5m. Thereafter, Venfin unbundled its shareholding in EMI for additional shares in the group to the value of R715m.
At the end of the period, the group had bought back 12.8-million EMH N ordinary shares worth R22.8m.
A little-traded stock, eMedia shares were up 1.6% on Thursday at R1.91. Year to date the share is down 46.8%.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.