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MUMBAI:
Media major UTV Software Communications has announced reasonably
good results for Q3 ended 31 December 2008. While its television
content, movies and gaming divisions are in fine fettle, its
broadcasting division continues to be a drag on its profitability,
squeezing margins.
UTV,
which is involved in broadcasting, movies, television content,
gaming and new media, notched up a growth of 10 per cent in
net sales from Rs 1.2 billion to Rs 1.35 billion. Its net
profit was Rs 299 million, up by 29 per cent (Rs 230.9 million,
Q3 2007). This would have been higher had it not been for
the losses of Rs 113 million that the broadcasting business
- consisting of four channels, UTV Movies, World Movies, Bindass
Movies, and Bindass - notched up. Managing director Ronnie
Screwvala expects the losses to continue into Q4 of this fiscal
and the following fiscal too. He however adds that he expects
broadcasting to break even during Q1 of 2010-2011.
The
gaming segment grew manifold from Rs 82.5 million to Rs 346.1
million, with profits at Rs 12.23 million as against a loss
of Rs 14.9 million. Says Screwvala, "Indiagames has grown
around 20 per cent quarter on quarter and has witnessed most
of its growth from its India operations as it is one of the
fastest growing markets for mobile gaming. Ignition continues
to focus on its three IPs, and we are making good progress
for their release plans which I believe, would be the next
big quantum jump for UTV."
Its
motion pictures division reported lower revenues of Rs 321.4
million (Rs 891 million). Screwvala says that movies are only
going to do better in the coming months. "We expect that
the coming quarters shall witness benefits of larger aggregated
library with quality movies in our repertoire. This is expected
to reflect a closer to real long-term picture. Furthermore,
our Hollywood movies shall have added impact on the revenues
in the coming quarters." However, operating profit of
Rs 215 million was healthy.
Its
television segment reported revenues of Rs Rs 356 million
with profitability at Rs Rs 19.4 million.
Its
new media division - consisting of finance portal www.utvi.com
and technology site www.techtree.com - has reported revenues
of Rs 54.6 million as against none in the previous year. Says
Screwvala, "For a business that has been in operation
for just a few months we are pleased that it has reported
revenues of Rs 143 million for the nine month period in such
a start-up mode."
The
company's total expenditure in the quarter was at Rs 1.52
billion.
Screwvala
points out that the company has done even better if one considers
the revenues from the nine month period (ended 31 December
2008) perspective. Its operating revenues grew 86 per cent
to Rs 4.68 billion from Rs 2.52 billion and net profit rose
77 per cent to Rs 878 million from Rs 497 million in this period.
He
indicates that the company, which has invested Rs 4.1 billion
in motion pictures, Rs 3.1 billion in broadcasting,
and Rs 1.3 billion in gaming can only grow when these investments
start bearing fruit.
The stockmarket was lukewarm to its performance with the UTV
share closing 1.4 per cent up at Rs 254.05.
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