Market softness dampens RJRGLEANER performance - HD TV buildout continues
Radio Jamaica Limited, parent of the RJRGLEANER Communications Group, reported an after-tax loss of $42 million for the year ended March 31, 2018, compared to net profit of $145 million last year.
Group revenue slipped by $183 million to $5.04 billion, compared to $5.22 billion for the prior year. Company directors attributed the results to continued market softness during the period.
Other income slipped by $83 million to $132 million, caused mainly by foreign-exchange fluctuations and lower earnings on the group's foreign currency-denominated portfolio.
An increase in fixed assets by $381 million was attributed to the acquisition of a new high-definition television outside broadcast unit which, the statement said, positions Television Jamaica Limited (TVJ) to not only produce its own content in high definition but enables it to compete for third-party production services in the market, "providing higher-quality output, greater revenue potential, and lower operating costs".
According to Group CEO Gary Allen, "The group has leveraged the capital injection from the amalgamation to invest in strategic workflow upgrades for HD broadcasting, expanding outside broadcast production capabilities, as well as performing necessary upgrades to its radio and television transmission networks."
Allen cautioned, however, that the demand for capital will continue for a few years to come as the buildout culminates with eventual free-to-air HD broadcast known as digital switch over (DSO).
Viewers on the two largest cable TV providers are now able to enjoy programming in high definition on TVJ and TVJSN, an even more important development as the group gears up for executing the greatest show on earth, the 2018 FIFA World Cup, for which TVJ has exclusive free-to-air and subscriber cable TV broadcast rights, as well as non-exclusive mobile, broadband and radio rights.
While direct expenses fell by $49 million and selling expenses decreased by $28 million because of the lower cost of newsprint during the year, administrative costs of $1.1 billion increased by $29.6 million when compared to the prior year.
The company statement said that activities of the group during the financial year were "driven by a refocused strategy built around retooling for business expansion and synergistic acquisitions to adjust to the changing media and communications landscape."
The RJRGLEANER Group, in May of this year, announced its investment in
e-marketing platform Gustazos. According to Allen, "This investment, which is a first step, allows the group's expansion into digital business, which doesn't rely on the core editorial content, but benefits from the promotional strength which comes from the various media platforms within the group. It also allows us to offer smaller businesses an affordable and exciting alternative to reach their customers."
When questioned on the progress of the integration of RJR and Gleaner post-amalgamation, Allen said that good progress has been made and that the entity remained focused on the objectives of improving efficiencies, as reflected in cost-containment efforts, while building and expanding new or revamped products and services to meet clients' needs. The entity continued to do this with the well-established strengths of media talent and skills.
"The group's market, leading free-to-air television platform TVJ, the Gleaner and Star publications, the five radio stations, cable channels and online business have all in the last year executed on a strategy to maximise profitability and quality of product for the long-term improvement of shareholder value," said Allen.