e-tv shows SABC how it's done

Cape Town - Television broadcaster e-tv played a starring role for empowerment group Hosken Consolidated Investments in the six months to end-September 2009.

Results released on Friday showed that HCI's media unit - which mainly comprises e-tv - managed a 19% hike in operating profits to R331m, even though revenue only grew 2.7% to R766m.

The performance from e-tv, which has 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 R289m from e-tv represented over 33% of HCI's pre-tax profits for the interim period.

HCI CEO Johnny Copelyn said 64% held e-tv saw a continued rise in adspend during the interim period.

He said recently launched subscription channel eNews passed breakeven point and was expected to make its first contributions to profits 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 recently eAfrica News had been launched as a three-hour per 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.

Recently Finweek24.com, commenting on e-tv's additional broadcast platforms, asked whether a JSE listing was not in the offing to fund expansion plans.

More bright spots Aside from e-tv, there were a few more bright spots for HCI.

The group's investments in limited Payout Machine Gaming (R31m) and Golden Arrow Bus Services (R70m) 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 an small increase in operating profits to R773m, but this was offset by a marked drop in profits from hotels (which plunged to R239m from R366m last year).

HCI's biggest bruises came from its automotive engineering interests (a loss of R22m) and the Khusela coal venture (a loss of R7m). HCI's natural gas investment in the US and its 70% stake in clothing and textile group Seardel realised pre-tax losses of R42m and R51m respectively.

Overall HCI's earnings before interest, tax, depreciation and amortisation for the interim period dropped 6% to R1.45bn, while group pre-tax profits dropped 9% to R863m.

- Fin24.com