TVB records loss of HK$807m due to weakened TV advertising market

Local broadcaster TVB has recorded a HK$807m loss attributable to equity holders of the company for the last financial year due to weakened TV advertising market and slowdown in the company's China co-production business caused by covid restrictions across the border. Meanwhile, its revenue increased 24% mainly due to expansion of its eCommerce revenue of its subsidiary platform Ztore.

According to its financial results in 2022, TVB’s loss attributable to equity holders of the company for the year totalled HK$807 million, an increase of HK$160m or 25% from HK$647m in 2021, which was mainly attributable to an impairment loss on receivables from a joint venture of HK$212m.

This marked the company’s third consecutive year of losses, following deficits of HK$647m in 2021 and HK$281m in 2020.

On the other hand, the revenue of TVB increased from HK$2,899 m to HK$3,586m, an increase of HK$687 million or 24%, which was mainly driven by expansion of eCommerce revenue from HK$238 million to HK$863 million with the full year consolidation of the results of Ztore which was acquired by TVB in late August 2021, representing an increase of HK$625 million.

Another factor leading to increase in revenue includes improvement in income from advertisers from the Hong Kong TV broadcasting segment by HK$37m, from HK$1,141 m to HK$1,178 m; offset by decrease in revenue from OTT streaming and international operations amounted to HK$39m, from HK$770m to HK$731m.

Furthermore, segment revenue from Mainland China operations increased from HK$666 million to HK$698 million, mainly driven by higher revenue from digital media businesses including Mai Dui Dui, which helped overcome weakness in our drama co-production business in the second half of the year, when widespread pandemic restrictions in Mainland China resulted in slower buying activity by our platform partners. Overall, this segment recorded an EBITDA of HK$160 million during the Year, representing a decrease of HK$29m or 15% from HK$189m.

In terms of its OTT revenue, TVB’s streaming platform MyTV SUPER OTT segment revenue declined 5% to HK$349m following its discontinuation in 2022 of certain premium sports channels, which led to a one-off loss of subscribers. However, due to the resultant savings in content cost and also continued growth in subscribers of our myTV Gold premium service, segment EBITDA jumped 78% to HK$66m. During the year, myTVSUPER also saw the launch of a new Scoop+ (東張+) infotainment segment, which led to an increase of registered users to 10.4m, and an increase of MAU to 2.5m.

Don't miss: TVB and Youku ink deal to bring HK-style dramas to wider Chinese audience

Moving forward, TVB said China’s exit from pandemic restrictions also creates a favourable outlook for its Mainland China operations. "We expect our drama co-production business to benefit as content buying activity by the major video platforms picks up. In this regard, on 22 March we entered into a supply agreement with Chinese video platform Youku, whereby the group will coproduce a certain number of drama titles and also supply simulcast and library dramas to Youku worth about RMB700m in aggregate, over a two year period," the statement read. 

While its Mai Dui Dui direct-to-consumer streaming service continues to grow, it is also creating new opportunities such as its recently announced livestreaming partnership with Taobao. "While the outlook for our business has undoubtedly improved, other challenges such as geopolitical tensions, rising interest rates, and changing viewer habits remain. As such, the company has taken steps to reduce costs by adjusting the volume and nature of our content production in 2023. Lower-impact programmes are being discontinued, and we are also trimming our staff costs and overheads," the company added. 

Through these steps, the company targets to save over HK$260m in annualised cash expenses and overheads, where 5% of the company’s staff will be affected.

Related articles:

TVB reportedly cuts 5% of its workforce for cost optimisation
TVB expects up to HK$830m loss in 2022 due to weak advertising revenue