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TV18 Q3 net impacted due to new channel launches and Voot
MUMBAI: Continuing to be in investment mode, TV18 Broadcast reported lower consolidated net profit in the fiscal third quarter compared to the year-ago period.
Due to investments in new channel launches and over-the-top (OTT) service Voot, TV18 Broadcast’s net profit for the quarter ended 31 December 2016 stood at Rs 19.7 crore, down from Rs 84.9 crore a year ago.
Meanwhile, the TV18 board has approved a proposal for merger of its wholly owned subsidiaries with the company. This is intended to simplify the corporate structure, consolidate businesses and gain synergy and scale benefits.
Segment profit before interest and tax on a consolidated basis, including the performance of JVs, fell to Rs 30.6 crore from Rs 90.5 crore. Excluding the impact of new initiatives and one-time expenses, the segment profit for the quarter was Rs 83 crore.
EBITDA on a consolidated basis under Ind AS (accounting the JVs under equity method) stood at Rs 34.7 crore for the quarter versus Rs 49.2 crore a year ago. Excluding the impact of new initiatives and one-time expenses, the operating profit for the quarter was Rs 52.3 crore.
EBITDA was aided by lower marketing, distribution and promotional expenses, which reduced 7.5% year-on-year (YoY). Employee cost rose 27.2% YoY. Other expenses, at Rs 93.2 crore, were up 1.8% YoY.
Operating loss for new initiatives
Viacom18’s aggregate operating loss from new initiatives (2nd Kannada GEC Colors Super, movie channel Rishtey Cineplex and Voot) stood at Rs 34.8 crore for the quarter. Viacom18 is a joint venture in which TV18 owns 50%.
Lifestyle channel fyi TV18, which was commercially launched on 4 July 2016, incurred an operating loss of Rs 5.2 crore during the quarter. The channel was launched by AETN18, a JV between TV18 and A&E Network.
The company incurred an operating loss of Rs 9.1 crore during the quarter due to the launch of News18 Kerala, News18 Tamil Nadu and News18 Assam/N.E. The three channels were launched during the first quarter of the current year.
TV18 incurred a one-time expense of Rs 3.3 crore for the rebranding of Hindi news channel IBN7 as News18 India.
Consolidated revenue (including proportionate share of joint ventures considered for segment reports) grew 1.28% to Rs 701.3 crore compared to Rs 692.4 crore a year ago. Revenue from JVs rose 1.48% to Rs 451.3 crore from Rs 444.7 crore.
Consolidated revenue as per Ind AS for the quarter stood at Rs 250 crore compared to Rs 247.7 crore a year ago.
TV18 said that the impact of softening demand from advertisers in November–December was partially offset by good growth in the festive season, which fell entirely in October this time. There was a mild revival at the fag-end of the quarter.
Said TV18 chairman Adil Zainulbhai, “We continue to invest in both linear and digital media to capture value from the fastest-growth-engine of tomorrow. The ‘Network effect’ of having reach and scale in regional markets too is a key advantage which we hope to leverage for driving growth in the medium term. That our revenues have grown in what was a challenging quarter for the media industry is testimony to the strength of our channel bouquet and franchise.”
TV18’s segment profit dipped 64.87% to Rs 32 crore from media operations compared to Rs 91.1 crore a year ago.
Revenue from media operations stood at Rs 687.6 crore compared to Rs 681.8 crore a year ago.
The film production and distribution segment loss during the quarter narrowed 58.33% to Rs 5 million compared to Rs 1.2 crore in the year-ago period.
Revenue from film production and distribution business stood at Rs 18.7 crore compared to Rs 10.6 crore.
TV18 owns and operates 47 channels spanning news and entertainment. Besides, it caters to the global Indian diaspora through 11 international channels. TV18’s television channels are watched by around 586 million viewers and are leaders in most segments in news and entertainment.