| MUMBAI:
Ouch!!! That hurts! Leading TV production house Balaji Telefilms has seen a drastic
drop in its fortunes if one goes by the Q3 2008 results it announced late 28 January.
Its topline has fallen 36 per cent with income from operations being clocked at
Rs 505.68 million as compared to Rs 799.71 million for quarter ended 31 December
2007. What
has really hurt the company's financials is the three week TV industry strike
in November last year followed by the sudden discontinuation of its lead cash
earning shows on the cash strapped 9X (Kahaani Hamaaray Mahaabhaarat Ki and Kya
Dill Mein Hai) and on Star Plus (Kyuunki Saas Bhi Kabhi Bahu Thi and Kahaani
Ghar Ghar Kii). The last two shows were big revenue generators for the production
house. Additionally, EMI the single movie released by its film subsidiary Balaji
Motion Pictures did not bring in large audiences. This
is reflected in the drastic reduction in revenues from commissioned programming
to Rs 439.35 million (Rs 741.86 million). What helped buoy the production house
was the 9 per cent increase in sponsored programming revenue to Rs 66.33 million
(Rs 57.84 million). The
company says that its realisation per hour of commissioned and sponsored programmes
fell to Rs 2.78 million (Rs 3.23 million) and to Rs 450,000 (Rs 600,000) respectively.
It produced 158 hours of commissioned programming despite the industry strike
and also increased its sponsored programming quantum from 106 hours to 146 hours
in Q3 2008. Its
profitability numbers fell despite the fact that it reduced its expenditure during
the quarter by around 10 per cent. Operating profit (loss) was negative Rs 17.80
million (Rs 236.01 million), profit after tax nosedived to Rs 5.68 million (Rs
188.17 million). It also focused on collections with its debtors (in days of income)
dropping to 66 days (80 days). The
company has parked Rs 2.25 billion in mutual funds (market value Rs 2.35 billion
at end Q3 2008). Additionally it has provided Rs 50 million, keeping in mind that
it could see erosion in the long term value of its investments. It has also invested
in infrastructure putting in Rs 16.12 million in post production and studios during
the quarter; in a bid to build in efficiencies into its production process, improve
quality and to meet increased production requirements. The
management is bullish and it is working on getting Balaji Telefilms back on a
high trajectory growth path with new shows going on air on Star, Udaya, Sun, and
NDTV Imagine. Additionally it has another nine shows on air on various other channels.
Shares
of Balaji Telefilms gained Rs 2.80 to end at Rs 49.50.
Meanwhile,
the company announced that the board has accepted the the
resignation of Tusshar Kapoor, director of the company, with
immediate effect.
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