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ntv7 en route to gaining sound financial health
(Business Times (Malaysia) Via Thomson Dialog NewsEdge) NATSEVEN TV Sdn Bhd (ntv7) is optimistic of being debt-free within the next three years, from being laden with debt of as much as RM250 million at one time.
For its current year to December 2006, the free-to-air television operator expects to double revenue to RM90 million.
A wholly-owned unit of Media Prima Bhd, the company turned around to a net profit of RM160,000 for the first six months of this year from a net loss of RM80 million for the whole of last year.
ntv7 chief executive officer Amrin Awaluddin is confident its revenue target can be achieved because the company has already registered a turnover of RM40 million in the first half.
"We anticipate more television commercials coming in towards the later part of the year due to the strong cash flow coming in at the moment.
"This includes the many coming festivities such as Hari Raya, Christmas and Deepavali," Amrin told Business Times at ntv7's headquarters in Shah Alam.
ntv7 was bought over by Media Prima in December last year along with its RM250 million debt. Media Prima then injected RM50 million to revive the ailing company.
The company, which started broadcasting in 1998, has been in the red since 2001, weighed down largely by high operating cost and stiff competiton from other operators. Last year, it spent RM50 million on overheads alone.
"As of now, we have managed to pare down the debts by 60 per cent at between RM130 million and RM140 million, which we expect to fully settle in the next one to three years," said Amrin, who is also Media Prima's financial adviser.
He said the company managed to trim its debt by 60 per cent by outsourcing some of its activities, trimming its workforce to almost half, moving into automation and renegotiating some of its business deals.
"We also got a `haircut' (discount on loan repayments) from our 100 creditors, and made arrangements to pay by instalments," said Amrin.
He added that ntv7 is on track to registering a higher revenue based on the increased advertising and viewership anticipated from the latest TV programmes it is bringing in, both local and foreign.
Amrin said that a lot of rejigging has been done to improve TV content, such as revamping its news presentation and local talk shows to improve ratings.
ntv7 is one of four television channels operated by the Media Prima group, which also owns TV3 (for the mass market), 8TV (young Chinese audience) and Channel 9 (Malay market).
Media Prima also operates the Hot FM (previously Wow FM) radio station.
According to AC Nielsen figures, ntv7 commands a viewership of 10 per cent in Malaysia, which has a TV population of five million households.
ntv7 currently commands an adex (advertising expenditure) share of 20 per cent, which was worth between RM700 million and RM800 million last year, of which half goes to TV3. The whole media industry adex was worth RM3 billion last year, of which a large chunk went to newspaper companies.
Riding on its 3R motto - restructure, rationalise and rejuvenate - Amrin said that 100 per cent of its revenue is contributed by traditional TV commercials.
"We hope to introduce new products, such as used-car advertisements, and attract companies like Panadol to advertise and emulate the hugely successful Power Root commercial." The company also plans to sell some of its TV content to other mediums, such as Streamyx, broadband, webcast and iPod.
Copyright 2006 The New Straits Times Press (Malaysia) Berhad. Source: Financial Times Information Limited - Asia Intelligence Wire
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