TVB records HK$647 loss impacted by eCommerce and OTT

TVB has recorded a loss of up to about HK$647 million in FY 2021 due to the increasing loss of eCommerce and Hong Kong broadcast business, in addition to the reduced income of OTT business.

The company announced its official annual results on Wednesday. It lost HK$647 million in the financial year ended on 31 December 2021, compared to the loss of HK$281 million in 2020. One of the highlights of its loss was the negative EBITDA of HK$314 million due to the increase in its operating costs for the year, and the absence of any COVID-related wage subsidy income from the Hong Kong government. In 2020, the company's EDITDA was HK$74 million.

There was a 14% increase in total operating cost from HK$3,253 million to HK$3,707 million in 2021, mainly due to continued investment in content production talent and resources, and its consolidation of Ztore Group’s operating costs from late August 2021. In August 2021, TVB acquired Ztore which owns and operates two eCommerce platforms in Hong Kong, namely ztore.com and neigbuy.com. TVB owns a majority of shares and voting rights in this investment. In the announcement, TVB said the acquisition boosted its eCommerce revenue for the year from HK$29 million to HK$238 million, bringing substantial opportunities for the company to market and cross-sell products to our large audience base, creating new monetisable touchpoints with Hong Kong viewers and consumers in the process.

However, myTV SUPER OTT streaming business revenue was down from HK$412 million in 2020 to HK$367 million in 2021 due to lower advertising revenue arising from a weaker advertising market together with rotation by some customers into our broadcast TV slots to take advantage of special offers.
Subscription revenue was largely flat for the year, as growth in subscribers of our myTV Gold top-tier service helped offset a decline in subscription revenue due to the expiry of certain bundled sports packages.

Its international operations revenue decreased by 12% from HK$459 million in 2020 to HK$403 in 2021 million mainly due to lower fees from traditional pay-TV operators in Malaysia and Singapore. The decrease was partially offset by growth in revenue from digital channels such as the TVB Anywhere streaming service, and YouTube. TVB Anywhere had an aggregate user base of 9.0 million in our overseas markets, an increase of 39% from 6.5 million in 2020.

Looking ahead, TVB said its advertising sales of the TV broadcasting business began well in 2022, but slowed down significantly in February and March as advertisers became cautious as a result of the fifth wave of the pandemic. It expects a gradual recovery in Q2 after the pandemic restrictions will be progressively eased. Meanwhile, it continues to broaden its advertising income through digital media, as we further enrich our content offerings through non-traditional channels.

Lastly, when it comes to its eCommerce business, TVB said it started strongly in 2022, with monthly GMV reaching HK$94 million (by in-take order) in February 2022, adding that the fifth wave of the pandemic is driving shoppers to its online platforms, leading to the new records in monthly GMV, but are also entrenching shopping habits and building loyalty.

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