Profile

Sabido has a range of media interests, the most significant of which is e.tv. e.tv is the only independent free-to-air television broadcaster in South Africa.

Sabido investments PROPRIETARY Limited (Sabido)

Remgro has an effective interest of 32.4% in Sabido that 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 2015 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 R69 million (2014: R131 million).

During the second half of the year, Sabido management made the strategic decision to exit some non-core and certain under­performing entities within the group through disposal or closure thereof. These include the production arms of a factuals unit in Sabido Productions and the Natural History Unit, the eNCA Africa division, etv China, Setanta and the Africa Channel. The group continues to focus on its core South African operations, being e.tv, eNCA, eTV Multichannel, Openview HD (Platco), and its radio, production and property interests. The group continued with its strategy to further develop its multi-channel and Openview HD platforms with an additional investment of R245 million during the year. These investments, albeit costly and currently loss-making in the absence of significant revenue due to the delays in the rollout of Digital terrestrial television (DTT) and the slow box uptake, are necessary to establish these platforms for future content development and channel creation. Sabido has, however, recently been increasing its investment to assist in an acceleration of the set-top box rollout, which enabled it to reach levels of 200 000 set-top boxes during August 2015.

The abovementioned factors, as well as the pressure on revenues due to the general downturn in the economy resulting in lower advertising spend, led to significantly reduced profits for the year under review. Excluding the impact of the discontinued operations and the investment into multi-channel and Openview HD, the latter of which will yield future returns, the normalised earnings for the year amounted to R520 million compared to R572 million for the previous year.

The year under review was a difficult one for free-to-air broadcaster, e.tv. Rights to broadcast the FIFA 2014 World Cup were held by third-party broadcasters, which took audiences away from e.tv. Competitor broadcasters also invested significantly in local (and often vernacular) content, which necessitated increased programming investment by e.tv. Aggressive counter-scheduling by free-to-air competitor channels, combined with their local programme investment, also contributed to a reduction in audience during the year. e.tv continued to invest significantly on new local programming in order to counter the prevailing market conditions, and the new prime time schedule was launched in March 2015.

The concept of increased choice is becoming commonplace amongst South African television viewers. To bring viewers into the group stable, e.tv’s multi-channel bouquet, currently available on satellite platform Openview HD, is the route to providing viewers who want choice with that possibility. Sabido expects better growth in the take-up of Openview HD set-top boxes in 2015/16 and, consequently, better revenues.

eNCA continues to perform strongly as the best, by market share and revenue, of all television news services available in South Africa.
DTT broadcasting in South Africa is in an imminent phase of migration from analogue to digital platforms. As soon as DTT rolls out, Sabido’s multi-channel offering will be available on more screens than ever before which is expected to increase revenues.