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Radio One Q1 EBITDA at Rs 6.49 cr

MUMBAI: Next Radio Ltd, a subsidiary of Next Mediaworks Ltd that operates FM radio stations under the brand name of Radio One in seven Indian cities, has reported a 51.6 per cent jump in its operating profit (EBITDA) to Rs 6.49 crore (Rs 64.9 million) in the fiscal first quarter, from Rs 4.28 crore (Rs 42.8 million) in the year-ago period.

Operating revenues were up 18.5 per cent to Rs 17.21 crore (Rs 172.1 million). The revenues had stood at Rs 14.52 crore (Rs 145.2 million) in the corresponding quarter of the previous fiscal.

The company claims that its EBIDTA margin in the quarter under review represents an industry best figure of 38 per cent.

The company’s profit before tax was up 364 per cent to Rs 2.22 crore (Rs 22.2 million), as against Rs 0.48 crore (Rs 4.8 million) in the year-ago period.

Radio One MD & CEO Vineet Singh Hukmani stated, “Large networks have seen their Q1 volume growth largely due to a spurt in DAVP advertising but our ‘value’ growth has come from existing and new clients offering us better rates for our innovations across our seven ‘differentiated’ cities. In a slow economy, clients prefer better targeting that Radio One offers as compared to generic reach offered by others. Our effort in consistent digital engagement of a well-profiled audience has established a new currency with our advertiser.”

According to Next Radio, future strategies in the radio industry can only be revealed once the Phase III auctions are over. “But it is evident that escalating auction prices especially in Delhi, Mumbai and Bengaluru will certainly affect the profitability of many large network players in the short term even though it may mean improved topline. Multiple frequencies owned by a single player could also be subjected to discounting by agencies and advertisers,” the company stated.

The company recently got commitment from investor Rakesh Jhunjhunwala for an investment, while it has also raised debt in order to fund its Phase III plans.

Meanwhile, on a consolidated basis, Next Mediaworks, the holding company of Next Radio, posted a net loss of Rs 25.87 crore (Rs 258.7 million) due to the recognition of deferred tax assets on account of unabsorbed tax losses and depreciation amounting to Rs 37.25 crore (Rs 372.5 million).

In the year-ago period, it had posted a net loss of Rs 85 lakh (Rs 8.5 million).

Next Mediaworks CMD Tarique Ansari said, “We are extremely excited to see the continued growth of our radio business, ahead of the market. Both sales and EBIDTA have seen tremendous traction in the quarter, a performance that we hope to replicate in the year ahead. On the eve of FM Phase III, we are also cleaning up our balance sheet to put the difficulties of the past behind us and take the company forward on a new trajectory. These are exciting times and we are navigating them with both passion and caution.”

The company runs Radio One FM stations in Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Ahmedabad and Pune.