sabido investments PROPRIETARY Limited (Sabido)

Remgro has an effective interest of 31.9% in Sabido which has a range of media interests, which include South Africa’s only private free-to-air television channel, e.tv, its sister news service, eNews Channel Africa (eNCA), free-to-air satellite platform Platco Digital, Gauteng-based radio station, Yfm, and various studio facilities and production businesses.

Sabido has a March year-end and therefore its results for the twelve months to 31 March 2014 have been included in Remgro’s results for the year under review. Sabido’s contribution to Remgro’s headline earnings for the year under review amounted to R131 million (2013: R148 million).

The decrease in Sabido’s results was mainly attributable to increased costs relating to the launch of three new businesses – a free-to-air direct-to-home (DTH) satellite platform under the brand name Openview HD, five new e.tv channels and the online news business enca.com. All three initiatives are in line with the group’s multi-channel, multi-platform and multi-territory strategy.

While e.tv exceeded its revenue targets for the year under review, free-to-air television advertising revenue is under increasing pressure. The ongoing delay in the launch of digital terrestrial television (DTT) has resulted in a significant shift in audiences and advertising revenue to pay-TV as audiences seek out multi-channel offerings beyond the current four-channel analogue terrestrial offering.

The launch of Openview HD in October 2013 was aimed at providing a multi-channel free-to-air alternative to pay-TV in an attempt to stem the losses of audiences and revenue to pay-TV.

eNCA, Sabido’s 24-hour news channel, continued to benefit from subscriber growth in the DStv Compact platform. Despite the launch of two new South African 24-hour news channels, eNCA retained its position as the premier news service on DStv. enca.com, the group’s online news offering, achieved record highs during the passing of former President Nelson Mandela, with over 675 000 unique browsers during December 2013.

Television and music content businesses, Sabido Productions, Natural History Unit and Lalela Music, had good operating performances, but publishing business Jacana struggled amidst difficult trading conditions.

Facilities business Sasani performed better than expected and was operating at full capacity, while Cape Town Film Studios had a satisfactory performance and continues to show satisfactory occupancy levels. The performance of the post-production and equipment rental business, Silverline 360, improved significantly although the closure of the Filmlab (owing to the digitisation of cinemas across South Africa) had a negative impact on its results during the current year.