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TV18 Q4 consolidated net profit doubles; revenue up 18.7%

MUMBAI: TV18 Broadcast, the company which houses a clutch of news channels and holds a 50 per cent stake in entertainment channels under Viacom18, has posted stellar performance for the quarter and fiscal ended 31 March 2014.

For the fiscal fourth quarter, the company posted a net profit of Rs 35.9 crore (Rs 359 million), which is twice as much as what it had posted (Rs 17.3 crore or Rs 173 million) in the corresponding quarter of the previous fiscal.

Even operating profit (EBITDA) more than doubled to Rs 69.7 crore (Rs 697 million), from Rs 34.6 crore (Rs 346 million) in Q4 FY13. The EBITDA margin also increased to 12 per cent, from 7 per cent in the year-ago period.

Meanwhile, operating revenue jumped 18.7 per cent to Rs 563.3 crore (Rs 5.63 billion), as against Rs 474.7 crore (Rs 4.75 billion) in the corresponding quarter of the previous fiscal.

The just-concluded general election gave a boost to the company’s revenues. TV18’s advertising revenue jumped 29 per cent in an otherwise soft ad market. Ad revenue stood at Rs 357.8 crore (Rs 3.58 billion), compared to 277.5 crore (Rs 2.77 billion) in the corresponding quarter of the previous fiscal.

Meanwhile, the company’s operating expenses shot up due to a surge in production and other expenses. Total expenses stood at Rs 493.6 crore (Rs 4.94 billion), up from Rs 440.1 crore (Rs 4.40 billion) in the year-ago period.

The company stated that the commercial closure of some large distribution deals in the fourth quarter also helped in achieving higher revenues in this quarter. In addition, one-time restructuring and acquisition expenses for ETV and a one-time severance pay as part of the company’s restructuring initiative to realise operational synergies across the news network amounted to Rs 17.1 crore (Rs 171 million).

The consolidated results include 100 per cent of TV18 standalone, AETN18, ETV News and ETV entertainment, and 50 per cent share in IndiaCast, Viacom18 and IBN Lokmat.

Meanwhile, subsequent to receipt of all regulatory approvals, TV18 has completed acquisition of 100 per cent equity securities of Equator Trading Enterprises Pvt Ltd (promoters of ETV) with effect from 22 January 2014. Effective from the same date, Equator is a 100 per cent subsidiary, including its subsidiaries Panorama Television (ETV News), Prism TV (ETV Entertainment) and Eenadu Television (ETV Telugu).

Fiscal performance

For the full fiscal, TV18 turned around, showing a net profit of Rs 103.6 crore (Rs 1.04 billion), compared to a net loss of Rs 25.5 crore (Rs 255 million) in FY13.

EBITDA for the fiscal stood at Rs 210.5 crore (Rs 2.10 billion), up from Rs 112.1 crore (Rs 1.12 billion) in the previous fiscal, while the EBITDA margin jumped to 11 per cent, from 7 per cent in the year-ago period.

Operating revenue was Rs 1,968.1 crore (Rs 19.68 billion), up from Rs 1,699.1 crore (16.99 billion). Expenses grew to Rs 1,757.6 crore (Rs 17.58 billion) from Rs 1,587 crore (Rs 15.87 billion) in the corresponding quarter of the previous fiscal.

Network18 MD Raghav Bahl said, “We are enthused by the outstanding performance of TV18 for this financial year. All our businesses contributed positively to achieve our highest ever post-tax profits of Rs 103.6 crore despite the continued uncertainty in the macro-economic environment. We are confident of sustaining our growth trajectory, as we continue to extract value from our existing operations as well as profitably grow our newer initiatives.”

Network18 group CEO B Saikumar added, “We are extremely pleased that all our broadcast operations continued to deliver their margins despite softness in the advertising environment. IndiaCast has delivered a stellar swing in net distribution income. While our business news operations remained stable, our general news operations, led by CNN-IBN, have turned around this year, due to a strong focus on operational synergies, further aided by the elections.”

News & infotainment operations

In the news and infotainment segment, TV18’s total revenue for the fourth quarter stood at Rs 198.9 crore (Rs 1.99 billion), up from Rs 158.3 crore (Rs 1.58 billion) in the year-ago period.

Revenues from general news (CNN-IBN, IBN7, IBN Lokmat) stood at Rs 68.6 crore (Rs 686 million); from business news (CNBC TV18, CNBC Awaaz) at Rs 86.1 crore (Rs 861 million); from infotainment (AETN18) at Rs 8.3 crore (Rs 83 million); and from inclusion of ETV News Rs 35.9 crore (Rs 359 million).

Operating profit of overall operations stood at Rs 57.8 crore (Rs 578 million), up from Rs 25.8 crore (Rs 258 million) in the year-ago period. However, general news turned positive at Rs 16.8 crore (Rs 168 million), business news EBITDA dropped to Rs 24.1 crore (Rs 241 million), infotainment turned positive to Rs 2.5 crore (Rs 25 million) and ETV News EBITDA stood at Rs 14.5 million.

TV18 FY14 news and infotainment

Overall operating margin grew at a healthy 29 per cent during the quarter, compared to 16 per cent in the year-ago period.

Meanwhile, for the full fiscal, revenue from the news and infotainment segment stayed flat at Rs 592.4 crore (Rs 5.92 billion), from Rs 591.3 crore (Rs 5.91 billion) in the year-ago period.

Revenues from general news, business news, AETN18 and ETV News stood at Rs 239.7 crore (Rs 2.4 billion), Rs 289.3 crore (Rs 2.89 billion), Rs 27.4 crore (Rs 274 million) and Rs 35.9 crore (Rs 359 million), respectively.

Operating profit stood at Rs 131.4 crore (Rs 1.31 billion), up from Rs 77.9 crore (Rs 779 million) in the year-ago period. Margins jumped from 13 to 22 per cent.

The company said that its business news operations sustained healthy operating margins of more than 30 per cent despite the absence of Union Budget in this financial period. Both CNBC-TV18 and CNBC Awaaz continued to enjoy market leadership positions in Q4 and FY13–14.

It added that the general news operations turned around a healthy profit this quarter and grew margins significantly over the last year. Besides, History TV18 broke into the positive territory in FY14, compared to a reported operating loss of Rs 26.1 crore (Rs 261 million) in FY13. Despite a soft advertising environment, the channel registered growth in operating profits through improvement in net distribution income, the company explained.