South Africa: E.TV sees profits double
E.TV, the only commercial terrestrial channel in South Africa, nearly doubled after-tax profit in the year ended in March, giving a timely liquidity boost to its major shareholder, Hosken Consolidated Investments. It will need deep pockets to set up its pay TV venture E.sat -- one of four new pay TV licenses issued in South Africa this month.
Tech investment group Venfin said E.TV, through its holding company, Venfin subsidiary Sabido, was the main profit-driver for the group. It almost doubled its valuation of its E.TV investment to $180 million from $98 million a year ago.
HCI, which has the major stake in Sabido, said its media and broadcasting division had revenues of $130 million and after-tax profits of $49.5 million in the fiscal year ended in March, with the bulk of revenues and earnings derived from E.TV, which had lifted its revenue by 31% and after-tax profit by 95%.
Launched in 1998, E.TV was in the red six years ago but has since shown steady growth. HCI chairman Marcel Golding said the channel had continued to slowly increase its viewership, driven by a marked increase in its black, middle-income viewership. Sabido announced earlier this month that it had acquired a 49% stake in Gaborone Broadcasting Co., based in northern neighbor Botswana.
Media analysts believe HCI's cash-rich situation could be one key to its success in the looming pay TV market battle, which will see four new players -- E.sat, Telkom Media, On Digital Media and Walking on Water -- take on MultiChoice, which has had a decades-long monopoly in the South African market.
(Variety.com, 26th September 2007)