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Jakarta Post

Media groups gain from political ads

  • Khoirul Amin

    The Jakarta Post

Jakarta   /   Mon, March 30, 2015   /  09:04 am

Publicly listed media conglomerates PT Visi Media Asia (VIVA) and PT Surya Citra Media (SCMA) saw double-digit growth in both revenues and net profits last year, partly supported by general election-related programs that boosted advertising revenues.

'€œWhile not the main revenue booster, general election-related programs helped the two companies attract corporations or political parties to advertise more as the programs were watched by many people,'€ Reza Priyambada, an analyst with NongHyup Korindo Securities Indonesia, said on Friday.

It was crystal clear that free-to-air television station TVOne, which is run by VIVA, attracted a lot of political advertisements last year, he said.

VIVA is owned by Golkar Party politician Aburizal Bakrie, who backed presidential candidate Prabowo Subianto in last year'€™s election.

Reza went on to say that the station, along with its sister TV station ANTV, also benefitted from broadcasting the 2014 World Cup, which attracted millions of football lovers in the country.

According to its financial report, VIVA wound up last year with a 34.7 percent increase in its revenues to Rp 2.25 trillion (US$172.7 million) from Rp 1.67 trillion in 2013.

The company'€™s net profit surged by 63.6 percent to Rp 173.07 billion from Rp 105.79 billion year-on-year (yoy), driven by declining foreign exchange (forex) losses as it has slashed exposure of its US dollar-denominated debts.

Converted into rupiah, VIVA'€™s total liabilities in foreign currencies stood at Rp 2.6 trillion last year, a drop from Rp 2.9 trillion in 2013.

Cost efficiency was likely also a factor in the increase of VIVA'€™s net profit. Free-to-air station ANTV, which is also run by
VIVA, previously stated that it targeted to increase its in-house production to 75 percent for better cost efficiency.

SCMA, which runs free-to-air stations SCTV, meanwhile, maintained its double-digit growth. The firm'€™s revenues increased by 10.3 percent to Rp 4.06 trillion last year from Rp 3.69 trillion in 2013.

Its net profit increased by 13.3 percent to Rp 1.45 trillion in 2014 from Rp 1.28 trillion in the previous year.

SCMA'€™s parent company, PT Elang Mahkota Teknologi (EMTK), which controls the other free-to-air station Indosiar, obtained around 71 percent of its revenues from advertising.

Sutanto Hartanto, the president director of PT Elang Mahkota Teknologi, said last year the general elections would have not significantly helped boost his company'€™s revenue as many politicians would advertise on their own affiliated-media.

'€œThe 2014 general election is unique, there is no significant boost. Golkar has its own TV, Hanura also has its own. Their spending will likely go to their respective affiliated TV channels,'€ he said.

During the 2014 elections, a number of politicians who are also media tycoons joined the race.

Chairman of NasDem Party, Surya Paloh, who owns Metro TV, supported President Joko '€œJokowi'€ Widodo during his presidential campaign last year.

Hary Tanoesoedibjo, who controls MNC Group, was previously part of the Hanura Party before eventually deciding to leave the party and lend support to Prabowo.