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TV Today Q1 net slumps 45% amid ad rev drop and rebranding of English channel
MUMBAI: Aroon Purie-promoted TV Today Network, which operates leading Hindi news channel Aaj Tak and English news channel India Today TV, has seen a 45 per cent drop in its net profit for the first quarter ended 30 June 2015.
The bottom line has been impacted mainly as the revenue during the quarter fell, compared to the higher base in the corresponding quarter of the previous fiscal due to election spends. At the same time, the company incurred Rs 14.38 crore (Rs 143.8 million) as marketing expenses towards the rebranding of Headlines Today as India Today TV.
TV Today posted a standalone net profit of Rs 17.96 crore (Rs 179.58 million) in the quarter under review, as against a net profit of Rs 32.79 crore (Rs 327.94 million) in the corresponding quarter of the previous fiscal.
Incidentally, this was TV Today’s 11th straight quarter of positive bottom line.
Total income from operations was down 4.6 per cent to Rs 127.11 crore (Rs 1.27 billion), from Rs 133.22 crore (Rs 1.33 billion) a year ago. In the previous fiscal, TV Today had witnessed a 54.1 per cent increase in revenue.
Profit from operations (before other income, finance cost and exceptional items) was at Rs 21.82 crore (Rs 218.24 million), as against Rs 47.7 crore (Rs 477.01 million) in the year-ago period.
Expenses jump 18.9%
Total expenses jumped to Rs 105.29 crore (Rs 1.05 billion) from Rs 85.52 crore (Rs 855.18 million) a year ago.
Production cost saw a 5.8 per cent decline to Rs 12.11 crore (Rs 121.13 million), compared to Rs 12.86 crore (Rs 128.64 million).
On the other hand, distribution and sales promotion expenses catapulted 83.8 per cent to Rs 38.24 crore (Rs 382.37 million), from Rs 20.81 crore (Rs 208.06 million) in the year-ago period.
In addition to marketing spend on rebranding, this also comprised carriage fees paid to multi-system operators (MSOs).
Employee cost increased by 18.9 per cent to Rs 32.81 crore (Rs 328.14 million), from Rs 27.6 crore (Rs 275.98 million) in the year-ago period.
Employee costs, carriage fees and production costs continued to hog operating expenditure.
TV broadcasting business
The company’s TV broadcasting business reported first-quarter profit of Rs 27.98 crore (Rs 279.8 million), compared to Rs 51.43 crore (Rs 514.27 million) a year ago.
TV operations revenue fell from Rs 129.85 crore (Rs 1.3 billion) to Rs 124.65 crore (Rs 1.25 bllion).
FM radio biz
The company, which had signed a non-binding agreement with Entertainment Network India Ltd (ENIL) for the sale of its seven radio stations, has received permission from the Ministry of Information & Broadcasting (MIB) to sell four of its stations, while the case concerning the remaining three frequencies is in the Delhi High Court.
TV Today said that it is currently engaged in discussions with ENIL for the sale of the four radio stations.
The FM radio business (Oye FM), which accounts for 1.9 per cent of the company’s total revenue, saw a decline in income to Rs 2.46 crore (Rs 24.6 million) during the quarter under review, compared to Rs 3.36 crore (Rs 33.6 million) in the year-ago period.
The FM radio segment continues to be a drag on TV Today’s operating profit. For the quarter, the segment reported operating loss of Rs 2.62 crore ( Rs 26.21 million), as against Rs 2.56 crore (Rs 25.6 million) a year ago.