SURYA CITRA MEDIA

The Fed did not change its Benchmark rate on September 2015

The Fed opted not to change its fed fund rate on September 2015, but they still plan to raise its benchmark interest rate in this year. They decided it due to the unemployment rate in US which is at 5.1 %. The Fed decreased its benchmark rate in to near zero three months after the collapse of big investment bank, Lehman Brother. The lower rate could increase sales in automotive sector and commercial estate. As the result of that the official unemployment rate dropped from 10 % in 2009 in to 5.1 % in august. According to moody’s the key marker of healthy unemployment for US is below 5 % and it is expected in next several months, the unemployment rate will move to below 5 %. The slowdown of economic growth in china is also as the key factor to decide not to change federal fund rate.   

The median projection for rates at the end of 2015, June 2016 and June 2017 is 0.375%, 1.375 % and 2.625 % respectively. The long term projection rate will be at 3.75 %.

For Indonesia and other ASEAN’s country the Federal fund interest rate is having strong influence in their currencies. Currencies may be declined when the investor pull their easy money back because their investment is funded from debt with lower interest rate.  It has been occurred once the Federal Reserve makes announcement about their monetary policy.

Company Analysis

SCTV was no.1 ranking in all the time 5 + demographic

Surya citra media is owned by Elang Mahkota Technology as the largest shareholder with more than 60 % of total share. The company’s key person is Mr. Sutanto Hartono, formerly CEO of Microsoft Indonesia, he hold MBA degree from university of California, USA. He has been supported by Mr Alvin widarta sariaatmadja which is as vice CEO of the company. Mr Alvin may be a relative of CEO of Elang Mahkota Technology, Mr. Eddy Sariaatmadja.

For president commissioner position is filled by Mr. Raden Soeyono, vice president commissioner is Mr. Suryani Zaini and Mr. Glenn M Surya yusuf has been appointed as independent commissioner. Mr. Glenn is also vice president commissioner of CIMB Niaga and non executive director of CIMB group.

Surya citra media has done a merger with indosiar karya Mandiri, the parent company of indosiar visual mandiri in 2013. At recent indosiar is one of company’s subsidiary.

Surya Citra Media has subsidiaries, it consists of Screenplay production, Indosiar Visual Mandiri(indosiar), Bangka television,Surya tri optima multikreasi, Surya Citra Gelora and Surya Citra pesona and also surya citra televisi (SCTV). Screenplay production is run its business in Drama series and television movie production. Meanwhile Surya tri optima multikreasi is shaped from joint venture with trinity optima production, a local artist management. This company operates in artist management and entertainment sector.

In 2014, the sales growth was 9.7 % compared to sales growth in 2015. There was also a slightly improvement in gross margin from about 62 %in to 64 %. The biggest client of the company in 2014 was wira pamungkas pariwara which contributed more than 24 % of total revenue from advertising.

For the program material in 2014, it consisted of 91 % local program, 3.6 % import and 11.7 % in house. According to emtek’s annual report SCTV is no.1 ranking with 17.2 % average audience share in all the time 5 + demographic, meanwhile indosiar achieved 11.9 audience share, it was no. 3 ranking.

In 2014, the company has expanded its business in digital advertising technology and service at Singapore. It acquired 50 % share of whisper media pte ltd.

The company has good liquidity; it has a lot of cash. The company has license of broadcasting of champion league, Europe league and others league. The bank guarantee from Citibank na was amounting to USD 13,4 million. 

Source: annual report SCMA, Annual report EMTK . internet