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Jagran Prakashan Q1 net down 4.7% amid surge in newsprint cost

MUMBAI: With higher newsprint costs, employee expenses and depreciation provision eating into its profitability, Jagran Prakashan Ltd (JPL), the publisher of leading Hindi daily ‘Dainik Jagran’, has seen a drop in its bottom line during the quarter ended June 2014.

JPL clocked a consolidated net profit of Rs 55.08 crore (Rs 550.8 million), down 4.7 per cent over the year-ago period.

This is despite the fact that its total operating income grew 6.8 per cent year-on-year to Rs 440.29 crore (Rs 4.40 billion) primarily on the back of its Hindi daily. Incidentally, ‘Dainik Jagran’ scaled the top position as per the Indian Readership Survey 2013.

While the absence of political party spending curtailed JPL’s advertisement revenues, its subscription revenues also remained muted. Consequently, there was no marked improvement in realisation and performance sagged under pressure.

Expectedly, ‘Dainik Jagran’ continues to take a lion’s share in JPL’s performance. The daily reported 8.3 per increase in its operating revenue to Rs 335.9 crore (Rs 3.36 billion).

The company’s other publications including ‘Nai Dunia’, ‘Mid Day’, ‘I-Next’, ‘City Plus’, ‘Punjabi Jagran’, ‘Josh’ and ‘Sakhi’ contributed Rs 76.1 crore (Rs 761 million) to the top line.

Despite lower ad revenue from political or government promotions, advertising revenue grew 6.6 per cent year-on-year to Rs 308.9 crore (Rs 3.09 billion).

The company has always maintained that it is hopeful of maintaining the growth trajectory in spite of challenging environment and economic recovery remaining tentative.

Subscription revenue increased to Rs 95.66 crore (Rs 956.6 million), up 11.9 per cent year-on-year. Given the company’s double-digit growth in subscription revenue, this could be due to improvement in realisations and higher sales volume.

JPL’s operations took a hit owing to a sharp rise in operating expenses. Higher newsprint costs, weakening rupee, employee benefit costs and other operating expenses grew 9 per cent to Rs 329.36 crore (Rs 3.30 billion). Shooting operating expenses also marred its operating profit margin.

Operating profit (EBITDA) eased 0.6 per cent to Rs 84.9 crore (Rs 849 million). The EBITDA margin stood at 20.4 per cent, marking a contraction of 785 bps year-on-year.

Meanwhile, shares of JPL ended 0.5 per cent higher at Rs 119.40 a share on the BSE. The stock hit an intraday high of Rs 121.50 and a low of Rs 118.05.

JPL’s business interests span print, OOH, activations and digital. With nine titles in five different languages, it operates newspapers across 15 states with over 100 editions.

JPL acquired the Madhya Pradesh-based Hindi daily ‘Nai Dunia’ in April 2012 and ‘Mid Day’ in 2010.