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Radio Mirchi Q1 net down 42% due to new station launches

MUMBAI: Entertainment Network India Ltd (ENIL), the operator of FM radio channel Radio Mirchi, has posted 42% lower net profit for the quarter ended 30 June due to investments in new radio stations.

The company reported net profit of Rs 16.5 crore (Rs 165 million) during the quarter compared to Rs Rs 28.3 crore (Rs 283 million) in the corresponding quarter of the previous fiscal.

Prashant PandayThe company had to incur heavy upfront expenses incurred in the new stations of Kochi, Guwahati and the second channels in Bangalore and Hyderabad, ENIL MD and CEO Prashant Panday said.

The company expects to launch three more stations in August and 10 more by December this year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) stood at Rs 29.4 crore (Rs 294 million), down 16.8% over the last year. In the same quarter of the previous fiscal, the company had reported an EBITDA of Rs 35.4 crore (Rs 354 million).

“Our highly profitable radio business reported a strong 24% growth this quarter, ahead of industry numbers. Our non-radio business suffered a temporary de-growth, but we expect a full recovery in Q2,” Panday said.

The company posted a growth of 9% in total income at Rs.110.8 crore (Rs 1.11 billion) compared to Rs 101.5 crore (Rs 1.02 billion) in Q1 FY16. Within this core radio business, the bulk of the business saw a 24% growth in revenues.

Total expenses jumped 20.85% to Rs 89.78 crore (Rs 897.8 million) from Rs 74.29 crore (Rs 742.9 million) in the previous fiscal.

Programming and royalty expenses increased 39% to Rs 5.26 crore (Rs 52.6 million) from Rs 3.78 crore (Rs 37.8 million). Licence fees payout increased 34% to Rs 6.87 crore (Rs 68.7 million) from Rs 5.11 crore (Rs 51.1 million). Marketing expenses shot up 35% to Rs 15.28 crore (Rs 152.8 million) from Rs 11.29 crore (Rs 112.9 million).