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HT Media Q1 net up 2.3% amid new radio channel launches

MUMBAI: HT Media, which runs newspaper brands like Hindustan Times, Mint and Hindustan, has posted a 2.3% higher net profit of Rs 39.3 crore (Rs 393 million) for the quarter ended 30 June compared to Rs 38.4 crore (Rs 384 million) recorded in the previous quarter.

This is primarily due to higher EBITDA being offset by higher amortisation and interest costs with respect to new radio station launches.

In March, the company launched new radio stations, Radio Nasha 107.2 in Delhi and 91.9 in Mumbai.

EBITDA rose 28.3% to Rs 112.1 crore (Rs 1.12 billion) from Rs 87.3 crore (Rs 873 million), primarily due to an increase in other income and growth in advertising, circulation revenues being offset by a 2% increase in raw material costs, an 8.8% increase in employee costs and only 2.6% increase in SG&A.

Total revenue was up by 7.5% at Rs 662.4 crore (Rs 6.62 billion) from Rs 616.1 crore (Rs 6.16 billion).

Expenditure increased 4% to Rs 550.4 crore (Rs 5.5 billion) from Rs 528.8 crore (Rs 5.29 billion).

Advertising revenue increased 3.3% to Rs 483.7 crore (Rs 4.84 billion) from Rs 468.3 crore (Rs 4.68 billion) primarily due to an increase in advertising volumes. Subscription revenue increased by 5.9% to Rs 77.2 crore (Rs 772 million) from Rs 72.9 crore (Rs 729 million) primarily due to higher net realisation rate per copy.

Radio business

Radio business EBITDA was flat at Rs 9.5 crore (Rs. 95 million) with margins at 25.6% vs 35.9% during same period last year. Dilution in margins resulted from expenses related to new radio station launches and the impact of higher license fee costs.

The radio business reported 35.2% increase in revenue to Rs 33.2 crore (Rs 332 million) in Q1’FY17 from Rs 24.5 crore (Rs. 245 million) in Q1 last year driven by new radio station launches.

Digital segment

The digital segment revenue increased 25% to Rs 38.2 crore (Rs 382 million) from Rs 30.6 crore (Rs 306 million) in the same quarter last year. Shine.com registered revenue growth of 65% in Q1’FY17 vs Q1 last year. HT Mobile registered a revenue growth of 3.5% in Q1’FY17 vs Q1 last year.

Commenting on the results and performance, HT Media chairperson and editorial director Shobhana Bhartia said, “The first quarter of this year started on a cautious note with tepid top-line growth. Macroeconomic concerns translated into restricted spends by large advertisers and affected our English print business more than Hindi print, while our other businesses continued to do well.

“Our new radio stations, Radio Nasha 107.2 in Delhi and 91.9 in Mumbai are now operational and receiving rave reviews, while our digital business continues to grow and reduce its losses.

“We remain optimistic that sentiment will improve in the second half of the year, on the back of a good monsoon and implementation of the Seventh Pay Commission’s recommendations. With infrastructure already in place, we are well placed to leverage our inherent strengths to realise benefits of an uptick in the economy.”

The company intends to drive profitability of the newly launched radio stations besides improving profitability of the digital segment by focusing on growing revenue exponentially. It also plans to leverage the strong balance sheet (net cash of Rs 823.4 crore) to fund expansion.