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Strong readership drives HMVL’s Q3 performance
Mumbai: Hindustan Media Ventures Ltd (HMVL), publisher of the second largest Hindi daily ‘Hindustan’, witnessed a strong growth in the quarter ended December 2013.
The company’s coordinated strategy of staying focused on expansion and effecting price initiative has helped boost the topline, highest so far in any quarter.
Increasing prosperity and rise in consumption in the rural areas have driven its advertisement revenue growth.
‘Hindustan’, the second largest Hindi daily in the country according to the latest IRS survey, is currently the driving force for the company.
Being a dominant player in the north, HMVL could effectively implement the pricing initiatives amid higher ad revenue to boost total revenues.
For the period under review, total revenues grew 18 per cent to Rs 199.0 crore ( Rs 1.99 billion). Ad revenue increased 16 per cent to Rs 137.5 crore ( Rs 1.37 billion) and continued to dominate its composition in total revenues.
However, there was a marginal dip in the composition of ad revenue to total revenue, which stood at 69 per cent during the quarter under review, as opposed to 70.1 per cent in the corresponding quarter last year.
Circulation revenues have grown 18 per cent to Rs 45.9 crore ( Rs 459 million), which is in line with the findings of the latest readership survey.
On the operational front, the company derived mileage from its dominant position as evident from a sharp increase in operating profits (EBITDA) in spite of a sharp rise in input costs.
EBITA for the period under review increased to Rs 47.2 crore ( Rs 472 million), which translated into an EBITDA of 24 per cent compared to 21 per cent recorded in the corresponding quarter last year.
Higher newsprint prices and the weakening rupee against the US dollar collectively pulled raw material costs 22 per cent higher at Rs 80.6 crore ( Rs 806 million).
There was no respite from employee costs and other expenditures as well, which have maintained a steady upward trend.
Employee costs advanced 6 per cent to Rs 21.8 crore ( Rs 218 million), while other expenditures (including those related to ad and sales promotions) grew 5 per cent to Rs 49.4 crore ( Rs 494 million).
Net profit for the quarter stood at Rs 28.8 crore ( Rs 288 million), up 38 per cent, indicating the company’s success in leveraging its position.
HMVL chairperson Shobhana Bhartia in her statement said, “We are glad to report yet another quarter of a healthy growth in revenue and profit. Our pricing initiatives and improved traction in advertising revenues across markets have resulted in the highest ever topline in any quarter.”
Latest IRS survey did bring cheers to HMVL. Its flagship brand ‘Hindustan’ emerged as the second largest daily in the country and is a clear No. 2 in Uttar Pradesh and No. 1 in Uttarakhand while maintaining its dominance in Bihar and Jharkhand.
As per the recent IRS result, ‘Hindustan’ is the second largest Hindi daily in the country with a readership of 14.25 million. The company maintains that the continuous growth in readership has been result of strong brand building initiatives and leveraging of opportunities.
The management is confident that the expansion strategy, coupled with the healthy balance sheet, will help to put the company in a stronger position to deliver sustained growth in near future.
HMVL’s balance sheet (net cash of Rs 380.9 crore or Rs 3.89 billion) is strong enough to fund its expansion plans.
Apart from ‘Hindustan’, HMVL also prints and publishes kids magazine ‘Nandan’ and general interest magazine ‘Kadambini’. Its holding company HT Media is a publisher of the leading English tabloid ‘Mint’.