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Political ads pump up TV Today’s Q1 performance

MUMBAI: Buoyed by political advertising, TV Today Network has posted a stupendous 54.1 per cent increase in revenue from the year-ago period to Rs 137 crore ( Rs 1.37 billion) in the fiscal first quarter ending 30 June 2014.

Surpassing market expectations, net profit in the June quarter almost doubled to Rs 32.79 crore ( Rs 327.9 million). Incidentally, this was TV Today’s seventh straight quarter of positive bottom line.

“Political ads gave a boost to TV Today. Being an election quarter, advertisers also increased their exposure on news channels. TV Today was a big beneficiary of this,” said a media analyst.

Employee and production costs hardened. In spite of steady growth in operating expenses, the company’s operating profit (EBITDA) grew 161.7 per cent to Rs 50.44 crore (Rs 504.4 million).

In the quarter, the company has forked out Rs 38.75 crore (Rs 387.5 million) for acquisition of digital rights of its news channels from its holding company Living Media India Ltd. Such consideration paid has been recognised as an intangible asset, to be amortised over 10 years.

Carriage fees rise

Employee costs, carriage fees and production costs continued to hog operating expenditure. Carriage fees (advertising/distribution and sales promotion expenses) paid to multi-system operators (MSOs) shot up 26.9 per cent quarter-on-quarter to Rs 21.53 crore ( Rs 215.3 million) despite Aaj Tak dominating the Hindi news channel space.

TV broadcasting biz

The company’s TV broadcasting business reported first-quarter operating profit of Rs 51.42 crore ( Rs 514.2 million) compared to Rs 21.18 crore ( Rs 211.8 million) a year ago.

TV operations logged 55.6 per cent increase in revenues to Rs 133.6 crore (Rs 1.34 billion). The company operates Hindi news channel Aaj Tak and English news channel Headlines Today.

TV broadcasting business, which accounts for 99.6 per cent of the company’s total revenue, benefited from its reach in the Hindi heartland. The segment contributed Rs 51.43 crore ( Rs 514.3 million) to the bottom line.

Total capital employed in the TV broadcasting business stood at Rs 382.36 crore ( Rs 3.82 billion) as of 30 June 2014, up from Rs 355.16 crore ( Rs 3.55 billion) in the preceding quarter.

FM radio biz

The company’s FM radio business, which accounts for a meagre 0.4 per cent of the total revenue, witnessed 11.5 per cent increase in turnover to Rs 3.36 crore ( Rs 33.6 million) during the quarter under review.

The FM radio segment continues to be a drag on TV Today’s operating profit. For the quarter period, the segment reported operating loss of Rs 2.56 crore ( Rs 25.6 million) as against Rs 2.33 crore ( Rs 32.0 million) a year ago.

Mail Today stake

TV Today has strategic investment of Rs 45.52 crore ( Rs 455.2 million) in Mail Today Newspapers Pvt Ltd for entering into print media. Though Mail Today is in the initial stage of operations and is presently incurring losses, the company said it is confident of its future profitability and consequently of the carrying value of its investment.

Share price up

On the BSE, the TV Today counter did well for the day by closing 0.22 per cent higher at Rs 137.00 per share amid volume of 135,000 shares. This was nearly twice as much as its average daily volume of 72,000 shares in the last two weeks. The stock had hit a 52-week high of Rs 154.95 on 30 May 2014 and a 52-week low of Rs 53.85 on 2 August 2013.