​Gazprombank's Media-Business segment discloses financial results for January-June 2020
28 August 2020

On August 28, Gazprombank released its financial results for the January-June 2020 period, which showed key figures on Gazprom-Media Holding as part of the Media-Business segment.

The unpredictable coronavirus situation, which emerged in the second quarter and led to nation-wide restrictions, made the biggest impact on the company’s financial performance in the first half of 2020. The situation especially affected Gazprom-Media’s key media market segments: television, sports broadcasting and film distribution.

The second quarter of 2020 was challenging for media holdings. Movie theatres were closed to the public, while top sports competitions were suspended or postponed, including the Euro 2020. Moreover, there was a decline in overall business activity, which had a negative impact on the television advertising market. Some advertisers decided to move their budgets to the fall.

Key financial figures of the Media-Business segment for January-June 2020:

  • Consolidated revenues decreased by 8% to 42.7 billion rubles due to a general decline in TV advertising and the absence of sports events and film distribution in the second quarter.
  • Advertising revenues decreased by 8% and added up to 30.5 billion rubles.
  • Non-advertising revenues decreased by 7% to 12.2 billion rubles due to decreased income from the sale of rights to audio and video content and the sale of broadcast services while movie theatres and sports venues were closed in the second quarter.
  • Consolidated expenses decreased by 3% to 42.9 billion rubles due to efficient cost management. As a result of the epidemiological situation and the specifics of the media business, cuts were made to the most costly operations. For example, there was less spending on content as TV channels broadcast previously aired, popular shows. Premiere projects were rescheduled for future use. Moreover, there were no longer costs for the broadcast of sporting events, which helped to offset the overall decrease in income.
  • The operating loss totaled 184 million rubles. The net loss was 1.3 billion rubles as a result of the general economic decline in the context of the epidemiological situation. Sharp fluctuations in the exchange rate also had an effect on the revaluation of foreign exchange liabilities.

Key financial figures of the Media-Business segment for April-June 2020:

  • Consolidated revenues decreased by 22% and added up to 17.8 billion rubles as a result of a 19% decrease in advertising revenues in the context of a general decline in the TV advertising market, as well as a 35% decrease in income from the sale of rights to audio and video content while film distribution and sports broadcasts remained suspended.
  • Consolidated expenses decreased by 11% to 19.6 billion rubles. The epidemiological situation and the specifics of the media business influenced the decision to cut costs.
  • The operating loss totaled 1.8 billion rubles, while the net loss was 2.2 billion rubles.

During the time of restrictive measures and “non-working” days, the Holding’s television channels adapted to create new forms of content, such as screen-life series, socio-political programs without in-studio audiences, and shows done as videoconferences. This approach has made it possible to maintain the audience numbers for the Holding’s channels, which partially offset the overall decline in the market. Moreover, Gazprom-Media channels benefited from the successful premieres and reruns of popular projects during the second quarter*.

On April 26, NTV released the final episode of the musical show Maska (The Mask), which got a record number of television viewers - 28.8% share, 10.7% rating. These were the best figures among entertainment programs on Russian television dating back to December 2016, and the best figures for musical shows since December 2013. At the peak moment of the show, when the winner takes off their mask, the audience share reached 38%.

The channel’s premiere content also had high ratings. As such, the series Ded Morozov (Grandfather Morozov) became a leader in its time slot on May 10 with a share of 15.2% and a rating of 4.8%, while the new series Aleks Lyutyy made NTV the leader of the evening primetime slot thanks to its average share of 14.9% and rating of 4.3%. The second season of the TV series Dinozavr-2 (Dinosaur 2) also had good numbers (13.4% share, 4.4% rating) as did the new series Ricochet (13.1% share, 4.6% rating). Moreover, viewers continued to show an interest in NTV news broadcasts in the second quarter. In April the program Itogi Nedeli (Weekly Summary), hosted by Irina Zeynalova, became the best weekly analytical program on Russian TV. The average share of the program in the second quarter was 14.1%, while its rating was 4.5%.

Similarly, the series premieres that aired on TNT channel became the leaders in their evening time slots. The new series Mir! Druzhba! Zhvachka! (Peace! Friendship! Chewing Gum!), made by Good Story Media, had a viewership share of 11.4%, while the new seasons of the projects Realnye Patsany (Real Guys) and Politseysky s Rublyovki (Policeman from Rublyovka) also got good viewership shares - 12.7% and 11.9%, respectively. TV audiences were also drawn to the new series Proekt Anna Nikolaevna (10.8% share) and 257 Prichin, Chtoby Zhit (257 Reasons to Live, 9.7% share).

The second season of the show Posledniy Geroy (The Last Hero) aired on TV-3 in the second quarter. The final episode got the maximum share across Russia - 9.3%, and 11.2% in Moscow. The premiere of the new season of Znaki Sudby (Signs of Fate) had an average season share of 5.6%. Moreover, TV-3 brought in 50% more sponsorship funding in January-April as compared to the same period last year thanks to its own program lineup.

Two premieres got high audience numbers on Friday! channel in the second quarter. The new show Boy s Girls (Fight with Girls), hosted by popular comedians and actors Ekaterina Varnava and Aleksandr Gudkov, had an average share of 5.1%, while the new season of the culinary project Konditer (The Confectioner) featuring Renat Agzamov had a share of 4.8%. The next installments of the shows Na Nozhah (Knives at the Ready) and Mir Naiznanku (The World Inside Out) also had solid ratings - 7.6% and 6.1%, respectively.

Gazprom-Media Holding is a socially responsible business. Its PREMIER video service was the first and only online movie theater to give its viewers free access to content created by Gazprom-Media’s studios and television channels during the quarantine period in Russia (from March to June 2020). NTV-Plus also gave free access to high-quality content (up to 190 channels covering various topics) to its current and new satellite and OTT subscribers at this time.

*Mediascope, Russia, cities with a population of more than 100,000 people, 01.04.2020-30.06.2020, audience aged 14-44 for TNT, TV-3, Friday!; and audience aged 18+ for NTV. Average viewership share (%), rating (%).