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NDTV’s TV biz posts losses in Q1

MUMBAI: News broadcaster New Delhi Television (NDTV) is looking to diversify in the digital and ecommerce space while news, its core business, is under pressure amid lower ad growth and higher carriage cost.

NDTV has seen its fiscal first-quarter consolidated net loss widening, mainly on the back of ecommerce business, while its news business has remained unprofitable.

Consolidated net loss in the quarter ended 30 June 2015 stood at Rs 24.29 crore (Rs 242.9 million), compared to a net loss of Rs 1.49 crore (Rs 14.9 million) a year ago.

NDTV’s topline in the television business was impacted during the quarter under review, compared to the higher base in the previous fiscal due to ad income from general election.

Even as its digital business maintained growth momentum, a 20 per cent drop in TV and allied business resulted in NDTV’s consolidated revenue falling to Rs 120 crore (Rs 1.20 billion), from Rs 147.42 crore (Rs 1.47 billion) in the year-ago period.

Increased ad spending on television channels because of the general election last fiscal had added to NDTV’s Q1FY15 showing.

Carriage fee and marketing, distribution and promotional expenses continued to pinch. It stood at Rs 29.33 crore (Rs 293.3 million) in the fiscal first quarter, a 13.86 per cent growth over Rs 25.76 crore (Rs 257.6 million) it had incurred in the year-ago period.

The company said that digital and ecommerce revenues now account for 21 per cent of total group topline (up from 13 per cent in the same period last year), reflecting the ongoing the NDTV Group’s commitment to and investments in key digital assets.

Meanwhile, the company managed to keep its expenses under control at Rs 145.92 crore (Rs 1.46 billion), compared to Rs 148.18 crore (Rs 1.48 billion) in the prior-year quarter.

Consolidated loss from operations (before other income, finance cost and exceptional items) stood at Rs 25.91 crore (Rs 259.1 million), compared to just Rs 76 lakh (Rs 7.6 million) in the year-ago period.

Production costs came down to Rs 22.79 crore (Rs 227.9 million) from Rs 36.67 crore (Rs 366.7 million), whereas employee expenses jumped to Rs 50.77 crore (Rs 507.7 million), from Rs 46.28 crore (Rs 462.8 million) in the year-ago period.

When enquired about the high employee cost (over 42 per cent of revenues), NDTV group CEO Vikram Chandra told TelevisionPost.com that NDTV takes pride in its pool of talent. “We have senior people working for over 10 years. Wherever you see across the channels, you will find talent grown at NDTV. We take pride in that and nurture our talent. So naturally, our employee cost may look on the higher side compared to the industry. However, because of this talent pool, we have been able to do so many things in-house.”

Biz chart

NDTV Q1 FY16

Standalone business

Incidentally, NDTV’s news channels business (standalone business comprising NDTV 24X7, NDTV India and hybrid channel NDTV Profit/ Prime) turned unprofitable with a net loss of Rs 14.60 crore (Rs 146 million), compared to a small net profit of Rs 2.57 crore (Rs 25.7 million) in the prior-year quarter.

Revenue was down 23.2 per cent to Rs 90.06 crore (Rs 900.6 million), from Rs 117.24 crore (Rs 1.17 billion) in the year-ago period. The company said that excluding revenues specific to elections, there is no decline in revenues.

The news business’ loss from operations (before other income, finance cost and exceptional items) was at Rs 11.77 crore (Rs 117.7 million), compared to a profit of Rs 6.57 crore (Rs 65.7 million) in the same period last year.

Convergence biz stays firm

NDTV Convergence maintained its growth momentum clocking 51 per cent growth year on year. (See table).

While EBITDA from convergence was at Rs 1.2 crore (Rs 12 million) compared to Rs 1.5 crore (Rs 15 million) a year ago, the company did not make any profit or loss from the business in the quarter under review.

Ecommerce venture

IndianRoots achieved a GMV (gross sales based on order book) of Rs 21.7 crore (Rs 217 million), compared to Rs 3.3 crore (Rs 33 million) in the year-ago period.

While revenue growth of 32 per cent was achieved year on year, the ecommerce business incurred a loss of Rs 10.8 crore (Rs 108 million) during the quarter, compared to Rs 5.4 crore (Rs 54 million) in the year-ago period.

Also read:

NDTV gets funding for new ecommerce ventures at $80 mn valuation