3Q 2024 Earnings Release

The Group reported a 378.0% increase in net income to record SAR 250.5 million in 9M 2024, driven by solid revenue growth and expanded profit margins across all segments. SHAHID’s AVOD revenue more than doubled, alongside continued subscriber growth, as MBC Group invested in premium content and innovative digital experiences to drive viewership and strengthen its position in the MENA region. Broadcast & Other Commercial Activities (BOCA) also witnessed steady advertising demand and increased revenue, contributing to the Group’s strong performance overall.

Riyadh, KSA – 10 November 2024: MBC GROUP (“MBC” or the “Company” or the “Group” | Tadawul: 4072), the leading media and entertainment conglomerate in the Middle East and North Africa (MENA) region, announced its financial results today for the nine-month period (9M 2024) ending 30 September 2024. The Group delivered a strong financial and operational performance, with an 11.6% year-on-year (YoY) revenue increase to SAR 2.9 billion and a 378.0% YoY rise in net profit to SAR 250.5 million.

Sam Barnett, MBC Group’s Chief Executive Officer, commented: “MBC Group’s nine-month results show revenues nearing SAR 3 billion and a nearly fivefold increase in net profit. These results underscore the strength of our strategy and the resilience of our business model. Our focus on premium Arabic content, digital innovation and diversification of our revenue streams has enabled us to capture value from both traditional and digital platforms. SHAHID’s growing reach and engagement post-Ramadan and sustained advertiser demand for our broadcast channels demonstrate our ability to meet audience needs while achieving strong commercial outcomes. Our strategic focus and market growth across our key segments keep the MBC Group well-positioned for the future.”

Consolidated Financial & Operational Highlights

Group revenue grew by 11.6% YoY in 9M 2024, reaching nearly SAR 3 billion. This was driven by strong performance in Broadcasting & Other Commercial Activities (BOCA) and SHAHID, which delivered a YoY increase of 20.7% and 35.9% in revenue, respectively. However, Media & Entertainment Initiatives (M&E) revenues declined by 35.5% YoY in 9M 2024 due to cyclical project timelines and phased revenue recognition.

The Group’s gross profit in 9M 2024 reached SAR 891.4 million, marking a 43.1% YoY increase, and gross profit margins expanded to 30.1% from 23.5% in 9M 2023. This improvement reflects higher revenue contributions from SHAHID and BOCA, alongside disciplined cost management across all segments.

Net profitability across the Group’s three business segments showed solid improvement in 9M 2024, led by SHAHID’s performance, which reduced losses by 73.9% YoY. This was accompanied by a significant 89.0% YoY increase in the M&E segment’s net profit. These factors collectively supported a substantial YoY net profit increase to SAR 250.5 million, underscoring the Group’s strategic focus on revenue growth and cost optimization.

Moving to the Group’s quarterly performance, revenue reached SAR 757.1 million in 3Q 2024, illustrating resilience in MBC’s core business segments, despite seasonal cyclicality impacting some advertising sectors. SHAHID contributed SAR 248.3 million (up 25.9% YoY) while BOCA recorded SAR 430.4 million (a 21.6% YoY increase).

Content continued to expand in 3Q 2024 with a diverse slate of multi-genre series, including premium regional offerings such as "Al Ameel," a thriller-drama adapted from Turkish literature; "Omar Affendi," a popular comedy-drama in Egypt; and "Bait al Ankaboot," a Saudi social-drama. Additionally, SHAHID aired Season 4 of "RSL" and the Diriyah Saudi Super Cup in late August, attracting sports audiences.

SHAHID’s Advertising-Video on Demand (AVOD) active monthly users grew by 13.7% YoY, reaching 17.8 million by the end of 3Q 2024, while Subscription Video on Demand (SVOD) subscriptions rose 22.2% YoY to 4.8 million users. This growth across the ad-supported and subscription models illustrates SHAHID’s ability to attract diverse audience segments and drive monetization beyond peak seasons like Ramadan.

Accordingly, MBC Group is updating its guidance for SHAHID, which, based on the Group’s current plans, is projected to reach breakeven by FY2027, a year ahead of the previous FY2028 target. This timeline reflects SHAHID’s robust growth across Subscription Video on Demand (SVOD) and Advertising Video on Demand (AVOD) revenue, supported by sustained operational efficiencies that have enabled SHAHID to maintain a steady cost base. Key drivers behind this revised outlook include higher-than-anticipated subscriber growth and a marked increase in AVOD performance relative to prior years.

Business Segment Performance

BROADCASTING & OTHER COMMERCIAL ACTIVITIES
The Group’s Broadcasting & Other Commercial Activities (excluding SHAHID) includes revenue generated from advertising on free-to-air (FTA) channels and other media-related activities, which include service agreements such as the one in place with the Saudi Sports Company (SSC). Commercial activities also include content revenue generated by third-party sales and generated by other business ventures such as gaming, events and music.

The BOCA segment recorded a 20.7% YoY increase in total revenue for 9M 2024, reaching nearly SAR 1.8 billion compared to SAR 1.5 billion in 9M 2023. Gross profit for the period rose 13.1% YoY to reach SAR 641.6 million while net profit reached SAR 298.3 million up from SAR 279.9 million, highlighting the Group’s strong market positioning in both traditional broadcasting and diversified commercial activities.

The primary drivers of growth in the nine-month period were TV revenues, which increased 5.8% YoY, and Broadcast & Technical Services revenue, which doubled to record SAR 654.5 million in 9M 2024, up from SAR 317.8 million. Despite seasonality, advertising revenue increased by 2.8% compared to 9M 2023, with the number of advertisers growing by 27% to reach 711.

In 3Q 2024, BOCA generated SAR 430.4 million in revenue, marking a 21.6% YoY increase. However, gross profit for the quarter declined by 11.1% YoY to SAR 131.4 million, and net profit decreased by 40.7% to SAR 44.3 million. This decline was primarily due to a temporary reduction in gross margins from broadcasting and technical services contracts, influenced by the timing of contract signings and expected variability in programming costs during the quarter.

SHAHID (OTT PLATFORM)
The Company operates a high-growth online video streaming service across SVOD (subscription video-on-demand) and AVOD (advertising video-on-demand) platforms. The revenue from this business segment is mainly driven by subscription fees paid by subscribers and digital advertising on AVOD.

SHAHID, MBC's OTT platform, recorded a 35.9% YoY increase in total revenue to SAR 805.7 million in 9M 2024, driven by growth in both subscriber and advertising revenue. In 3Q 2024, SHAHID achieved SAR 248.3 million in total revenue, reflecting a YoY increase of 25.9%, primarily supported by robust AVOD performance. Net losses for SHAHID decreased significantly by SAR 173.4 million in 9M 2024 compared to 9M 2023.

SHAHID's subscriber base continued to expand, reaching 4.8 million SVOD subscribers in 3Q 2024, representing a 22.2% YoY increase YoY with nearly 1 million new users. This growth underscores SHAHID’s increasing year-round appeal, maintaining strong momentum even beyond the month of Ramadan.

SHAHID's AVOD platform saw a 13.7% YoY rise in active monthly users, reaching 17.8 million at the end of September, reflecting strong demand for its ad-supported content. Consequently, advertising revenue more than doubled YoY as the Company continues to focus on expanding and enriching its content lineup on the free-to-watch, ad-supported platform.

In addition, the Group continues to invest in technological enhancements on the SHAHID platform to create a more personalized user experience, optimize content delivery, and support operational efficiency. AI integration efforts are underway to further personalize viewer experiences, enrich content, and broaden the platform’s reach with expanded subtitle options in additional languages.

MEDIA & ENTERTAINMENT INITIATIVES (M&E)
The Group prioritizes its partnership with the Saudi government through media and entertainment initiatives, aligning with Vision 2030 objectives. These efforts aim to enhance the media landscape in Saudi Arabia and contribute to the broader national goals of development and progress. While distinct from its core commercial operations, these initiatives underscore the Group’s commitment to societal advancement and align with its overarching mission.

In 9M 2024, the Group continued to meet its agreed KPIs with the Saudi government for all ongoing M&E initiatives. Despite a revenue decrease from SAR 589.2 million in 9M 2023 to SAR 380.1 million in 9M 2024, primarily due to variations in project cycles, the segment maintained a stable gross profit of SAR 127.1 million in 9M 2024, reflecting a 0.8% increase YoY. In line with guidance, net profit reached SAR 13.4 million, marking a notable 89.0% YoY increase and resulting in a net profit margin of 3.5% for the period. This increase was driven by new projects that began incorporating management fees.

MBC ACADEMY continued its commitment to nurturing and developing Saudi talent within the entertainment industry, training over 11,300 individuals, offering more than 4,500 virtual courses, and conducting over 6,400 auditions in 9M 2024.

MBC STUDIOS remains focused on high-quality content creation, with upcoming productions that include two fully funded football documentaries following Saudi Arabia’s Al Ahli Football Club and Spanish football club, Unión Deportiva Almería. The upcoming releases also include “Autumn in My Heart”, SHAHID’s first Saudi adaptation.

In line with Vision 2030 and the government’s plan to revolutionize the media and entertainment ecosystem in KSA, 70 out of 84 projects are currently being produced or planned for production in KSA - a significant increase from 2023. The Group remains on track to raise this percentage further in the coming years.

Lastly, the MBC Narjis Studios site is continuing to progress well, with the first studio prepared to host ‘Arabs Got Talent’ in November. The second and third studios, adding an additional 7,000 sqm of studio space, are set for completion in 1Q 2025. Furthermore, the post-production facilities and the office space, designed to accommodate over 250 employees, are scheduled to open by the end of 1Q 2025.

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