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Demonetisation and new launches impact TV18’s FY17 profit

MUMBAI: A slowdown in the second half due to demonetisation of high-value currency notes and new launches in entertainment, news and digital segments impacted TV18 Broadcast’s profit performance in the fiscal ended 31 March 2017.

TV18’s segment profit (including proportionate share of joint ventures) plummeted 74% to Rs 61.5 crore in FY17 compared to Rs 236.3 crore a year ago. The JVs include Viacom18 and AETN18.

However, adjusting for the investments in new initiatives and one-time expenses, the company’s segment profit jumped 30% over the earlier year to Rs 308.3 crore in FY17.

Despite demonetisation wreaking havoc on the economy in the second half of the fiscal year, the company’s revenue grew by 7% to Rs 2676.9 crore driven by entertainment and national news.

Consolidated Ind-AS revenue stood at Rs 979.4 crore, up 6% from Rs 924.9 crore in the earlier year.

Summary Consolidated Financials TV18 fy17

Consolidated Q4 performance

As far as the Q4 is concerned, TV18’s operating profit on a consolidated basis under Ind AS stood at Rs 26.4 crore compared to Rs 91.6 crore a year ago.

Segment profit before interest and tax plunged 77% to Rs 22.1 crore. Excluding the impact of new initiatives and one-time expense, the segment profit was down 4% to Rs 92.6 crore.

Consolidated revenue in the quarter ended 31 March 2017 grew 7% to Rs 715.4 crore versus Rs 669.3 crore a year ago.

Consolidated revenue as per Ind AS (accounting the JVs under equity method) for the fiscal fourth quarter stood at Rs 278.9 crore versus Rs 301.6 crore a year ago.

Reported Consolidated Financial Performance for the Quarter & Year Ended 31st March, 2017

Segment performance

In terms of segments, the media operations operating profit for the full year crashed by 74% to Rs 63.7 crore. The silver lining was the 8.18% increase in revenue to Rs 2602 crore. Q4 operating profit was down by 63.14% to Rs 15.7 crore while revenue was up by a measly 1.19% to Rs 679.4 crore.

Film production segment operating profit during the fiscal nosedived 77% to Rs 0.3 crore while revenue fell 29% to Rs 92.2 crore. The company posted a profit of Rs 7 crore in Q4 compared to a loss of Rs 0.7 crore in the previous fiscal year. Revenue increased 146% to Rs 46.1 crore.

Reported Consolidated Segment Information for the Quarter & Year Ended 31st March, 2017

Standalone performance

The company’s standalone net profit comprising news channels was down 5.23% to Rs 52.5 crore. Revenue from operations increased 3.46% to Rs 203 crore while expenses rose 4.5% to Rs 150.8 crore.

Reported Standalone Financial Performance for the Quarter and Year ended 31st March, 2017

TV18 Broadcast, which operates 47 channels in India spanning news and entertainment, said that tepid ad-industry environment had dragged revenues, especially in regional markets.

It also said that the media industry was still facing impact of deferment of advertising spends that kicked in during November-December 2016 due to likely slow-down in consumer spending.

The revival of advertising spends was witnessed at a much faster clip for national channels, while regional markets were still recovering, the company noted.

It further added that the lack of growth recovery at the regional channel was exacerbated by launches of regional news and entertainment channels over the last 18 months, including four in early FY17.

Adil ZainulbhaiTV18 chairman Adil Zainulbhai stated, “The last year has been a period of flux for the media industry, and a tale of two-halves. Despite headwinds in the later part of the year, we have continued to grow. Our commitment to growth is visible in our continued investments into regional and digital—the two growth axes we believe shall shape the future of media in India.”

New initiatives and one-time charges

The aggregate operating loss of the new initiatives of Viacom18 (second Kannada GEC Colors Super, OTT video destination VOOT and movie channel Rishtey Cineplex) for the quarter was Rs 36.1 crore.

Three regional news channels, namely News18 Kerala, News18 Tamil Nadu and News18 Assam/NE, which were launched during the first quarter of the fiscal year, incurred an operating loss of Rs 26.9 crore during the quarter.

fyi TV18, a lifestyle programming channel from the AETN18 stable (a JV between TV18 and A&E Network), incurred an operating loss of Rs 7.6 crore during the quarter. The channel, which commercially launched in July 2016, gained a market share of 21% in the quarter.