Robust income from advertising boosted the revenues of publicly listed media firms PT Surya Citra Media (SCMA) and PT Media Nusantara Citra (MNCN) between January and June.
Surya Citra’s revenues surged 20.8 percent to Rp 1.8 trillion (US$175.15 million), while those of Media Nusantara climbed 3 percent to Rp 3.13 trillion. Surya Citra corporate secretary Hardijanto Saroso said the company, which runs the SCTV television station, continued to receive higher revenue inflow from advertising by big advertisers throughout the first half, driven by strong consumer consumption.
Its latest financial report shows that income from advertising grew by one-fifth from a year before and made up more than 80 percent of its total revenues. “Many companies are still interested in promoting their products, especially in consumer goods. So even though ad spending is usually low at the beginning of the year, this year’s overall first-half results remained positive,” he said Monday.
Lower financing costs and higher finance income helped the company offset its increased expenses to book Rp 632.17 billion net profits in the first six months, a 23 percent increase year-on-year.
Hardijanto said he was optimistic Surya Citra would be able to maintain its advertising income in the second half, supported by Ramadhan — during which TV stations generally see flourishing advertising spending — and its upcoming soccer league broadcast.
Media Nusantara, part of publicly listed media conglomerate PT Global Mediacom (BMTR), similarly derived the bulk of its earnings from advertising.
Global Mediacom CEO Hary Tanoesoedibjo said that in the second quarter of the year, Media Nusantara’s advertising revenue grew 24 percent annually when excluding the one-time revenue from the Euro 2012 soccer championships aired in June. Media Nusantara’s revenues rose 2 percent year-on-year to Rp 1.7 trillion in the second quarter alone, while Global Mediacom’s second quarter revenues rose 15 percent to Rp 2.6 trillion, with first-half consolidated revenues climbing 16 percent to nearly Rp 5 trillion.
Around 60 percent of the revenues came from advertising.
Media Nusantara finance director Jarod Suwahjo recently said Ramadhan would further drive revenues up in the second half.
He added that advertising revenues would remain strong until the fourth quarter because people would keep up consumption until the end of year, partly due to Christmas.
Optimism about higher ad spending and strong domestic consumption is also reflected in Nielsen’s May survey results on consumer confidence, which said Indonesian consumers remained the world’s most confident for two consecutive quarters in 2013.
Separately, Investa Saran Mandiri analyst Kiswoyo Joe said TV stations would also benefit from ads related to politics ads as well in the second half.