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EMPOWERMENT GROUP’S RESULTS GET A BIG BOOST – THANKS TO e.tv

08 Nov General

TELEVISION broadcaster e.tv played a starring role in empowerment group Hosken Consolidated Investments in the six months to the end of September.

Results released on Friday showed that HCI’s media unit — which mainly consists of etv — managed a 19% hike in operating profit to R331 million, even though revenue grew only 2.7%, to R766 million.

The performance by e.tv, which recently extended its core free-to-air offering with subscription channels, stands in stark contrast to the tatty financial position of state broadcaster SABC. The pre-tax profit donation of R289 million from e.tv represented more than 33% of HCI’s pre-tax profit for the interim period.

HCI chief executive Johnny Copelyn said e.tv saw a continued rise in adspend during the interim period.

He said recently launched subscription channel eNews passed break-even point and was expected to make its first contribution to profit during the second half of the year.

Copelyn reckoned e.tv’s expansion into four channels — eTV, eNews, eAfricaTV and eAfrica News — was significant.

He said eAfrica News had been launched as a three-hour-a-day block but would be developed into a 24-hour continental news channel.

The continued strong performance by e.tv, which also has Remgro/ Venfin as a major shareholder, has caught the attention of market- watchers.

Aside from e.tv there were a few more bright spots for HCI. The group’s investments in Limited Payout Machine Gaming (R31 million) and Golden Arrow Bus Services (R70 mfflion) increased their contributions at operating profit level.

HCI’s mainstay gaming investments (via Tsogo Sun and to a lesser extent Gold Reef Resorts and Century Casinos) showed a small increase in operating profit to R773 mfflion, but this was offset by a marked drop in profit from hotels (which plunged to R239 mfflion from R366 million last year). HCI’s biggest bruises came from its automotive engineering interests (a loss of R22 million) and the Khusela coal venture (a loss of R7 million). HCI’s natural gas investment in the US and its 70% stake in clothing and textile group Seardel realised pre-tax losses of R42 million and R51 million respectively.

Overall, HCI’s earnings before interest, tax, depreciation and amortisation for the interim period dropped 6% to R1.5 bfflion, while group pre-tax profit dropped 9% to R863 million.

Source: City Press – Marc Hasenfuss