Malayala Manorama’s TV biz net falls, rev remains flat in FY17

MUMBAI: MM TV, the subsidiary of The Malayala Manorama Company, has seen its FY17 net profit shrink to Rs 0.64 crore compared to Rs 12.48 crore in the year-ago period.

The profit before interest, lease, depreciation, and tax (PBILDT) fell to Rs 37.19 crore compared to Rs 46.49 crore in the previous fiscal. Operating income remained flat at Rs 133.73 crore compared to Rs 133.7 crore.

MM TV owns and operates to channels Mazhavil Manorama and Manorama News. While Manorama News and Mazhavil are free to air channels within India, Mazhavil International is free to air in the Middle East and subscription-based pay channel for rest of the world.

MMTV, which reported losses during the initial period of operation of the company’s general entertainment channel ‘Mazhavil Manorama’ launched in FY12, has turned profitable since FY15.

Mazhavil Manorama contributes about 70% of the total income while 90% of the company’s revenues are generated from domestic advertisements which are targeted on audience within Kerala.

The Malayala Manorama Company, which holds 97.48% stake in MM TV, had invested Rs 154.5 crore in the TV broadcasting arm in FY17.

The company’s credit rating was recently reaffirmed as stable by Care Ratings.

In its report, Care said that the ratings assigned to the bank facilities of MM TV continue to draw strength from its strong promoter group, presence of well-experienced management team, established position of the company’s News & General Entertainment Channel (GEC) in the Malayalam television space and MML’s comfortable capital structure and coverage indicators.

It also noted that the ratings are constrained by company’s regional concentration of operations with income concentration from two channels, income uncertainty associated with in-house content that requires significant cash outflow and moderately elongated collection period, though improved over the past two years ended March 2017.

Going forward, the ability of MM TV to consistently generate fresh content, increase the advertisement revenues and maintain its position in a highly competitive market will be the key rating sensitivities.

Care further stated that MM TV has a limited portfolio of two channels compared to other competitors having multiple channels catering to various niche customer preferences including movies and music. The company also has a limited movie library, which curtails it from having additional movie/ comedy/music channels.

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