TVB sees revenue growth due to higher advertising income and eCommerce site

Local media broadcaster TVB has achieved a 46% revenue growth mainly driven by higher advertising income, its new eCommerce platform and its continued growth in Mainland China.

According to its official interim results released on 24 August 2022, TVB’s revenue grew by HK$572million (46%) from HK$1,248million to HK$1,820 million, due to its expansion of eCommerce revenue from its newly acquired platform Ztore Group, improved advertising income and continued growth in Mainland China.

The company also posted a decrease in net losses by 21% to HK$224 million in the first half of this year compared with the same period in 2021, with the TV broadcasting business in Hong Kong achieving 10% top-line growth from HK$544 million to HK$596 million.

This was caused by higher advertising income, which saw weakness from February to April, but rebounded strongly in May and June once the government began relaxing pandemic restrictions. This rebound also helped the company achieve positive Group earnings before interest, taxes, depreciation, and amortisation (EBITDA) in May and June.

TVB’s eCommerce revenue has also risen from HK$17 million to HK$461 million with the consolidation of the post-acquisition results of Ztore, representing an increase of HK$444 million. Furthermore, the company’s operations in China grew by HK$119 million or 42%, from HK$284 million to HK$403 million; offset by decrease in revenue from over-the-top (OTT) streaming and international operations amounted to HK$43 million, from HK$403 million to HK$360 million.

Looking ahead, TVB expects its advertising income in the coming second half to grow more than 20% compared to the same period last year as it sees the ongoing recovery of the industry due to easing of pandemic restrictions, and advertising clients start to spend more to attract consumer dollars.

For its eCommerce business, TVB aims to grow its gross merchandise value further this year by continuing to integrate eCommerce ever more closely into its TV programmes and platform resources. It shall also begin shipping eCommerce orders into Mainland China in the second half of this year, through its cross-border commerce site on the Douyin platform.

Back in March this year, 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.

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