IPL Franchise inflates revenues but erodes Sun TV profits for Q1-2014

BENGALURU: It's still early days yet considering the fact that the last Indian Premiere League's (IPL), sixth edition was the first one for the Sunrisers Hyderabad team, but the IPL venture did erode Rs 30.79 crore or about eight per cent of the Rs 384.44 crore EBIDTA reported by the Sun TV Network Limited (Sun TV) broadcasting business in Q1-2014.


As stated above, excluding IPL, EBIDTA for Sun TV for Q1-2014 was Rs 384.44 crore, up 19 per cent as compared to EBIDTA reported for Q1-2013. Including the IPL negative EBIDTA, Q1-2014 EBIDTA was about 10 per cent higher at Rs 353.65 crore as compared to Rs 322.97 crore in Q1-2013.


Let us take a look at the numbers reported by Sun TV Network Limited


Sun TV's PBIDT (Profit before interest, depreciation and tax) for Q1-2014 grew by about nine per cent to Rs 367.04 crore from Rs 336.20 crore in Q1-2013. The network says that it's PAT (excluding IPL) at Rs 184.78 crore grew about 12 per cent.


Sun TV reported revenues for Q1-2014 of Rs 601.85, including Rs 98.54 crore from IPL, a growth of 41 per cent over the Rs 425.25 crore for Q1-2013. Its broadcasting business grew 18 per cent in Q1-2014 to Rs 503.31 crore as compared to Q1-2013, and by 5.4 per cent as compared to the Rs 477.67 crore during Q4-2013.


At the time of writing of this report, Sun TV has not filed the exact numbers of the break-up from the various revenue streams that contribute to its broadcasting business; it has indicated the growth percentages of the major revenue streams through a release.


The network says that its advertisement revenue for Q1-2014 was up by approximately 15 per cent to Rs 279.73 crore.


Sun TV says that its subscription revenues continue to maintain an uptrend with its cable TV business growing by approximately 38 per cent and its DTH subscription revenue growing by about 20 per cent in Q1-2014.


Sun TV paid Rs 85.05 crore towards IPL franchise fees, subtracting these fees from its total expenses of Rs 365.59 crore for Q1-2014, the channel's expenses at Rs 280.54 crore jumped up 43.1 per cent as compared to Rs 196.05 per cent for Q1-2013 and were higher by 24.3 per cent as compared to the Rs 225.89 crore for Q4-2013.


The network's 'Other Expenses' for Q1-2014 more than trebled (up 261 per cent) to Rs 73.94 crore as compared to the Rs 20.50 crore for Q1-2013 and more than doubled (up 129.8 per cent) as compared to Q4-2014's Rs32.18 crore.


At its meeting held on 2 August 2013, the board of directors of the company have declared an interim dividend of Rs 2.25 per share (45 per cent).

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