South Africa: Profitable picture at etv

Investment

Free-to-air television station etv has posted another large jump in profits, according to figures released by parent company Hosken Consolidated Investments (HCI) on Thursday.

Interim results to end September for HCI showed that the Media and Broadcasting division - which is largely underpinned by etv - bumped up pre-tax profits 45% to R225m from a 35% hike in turnover to R544.5m. That represents a trading margin of over 50% - a statistic that would make the SABC green with envy.

Media and broadcasting was the second biggest contributor to HCI's interim pre-tax profit of R1,2bn - accounting for nearly 20% of pre-tax profits. HCI's gaming investments (mainly Tsogo Sun) chipped in over R600m to pre-tax profits.

Aside from etv, HCI also holds interests in Gauteng-based radio station YFM, Dreamworld Film Studios, Dreamworld Film Studios, satellite television licence holder e.sat tv and mobile solutions provider ViaMedia. Directors said results were in line with expectations, but noted that profit margins were enhanced by "management's focus on containing costs while leveraging the inherent advantages of the media business model".

Currently etv is the most-watched English-medium television channel in SA and the second-largest channel overall. Directors said etv remained committed to a pan-African media strategy - the company would adopt a cautious approach. They added that expansion plans remained focused on etv becoming a multi-channel, multi-platform business and a television content aggregator.

With reference to e.sat tv's successful application for a satellite pay television license, directors said the group was currently evaluating opportunities in the sector with a view to launching new channels in 2008. This, they indicated, would be undertaken without exposing the media and broadcasting division to excessive financial and operational risk.