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MUMBAI:
The economic downturn has started influencing the balance
sheets of the media companies. The latest to writhe in pain
is NDTV Ltd. as its consolidated net loss widens to Rs 1.6
billion for the fourth quarter of the fiscal ended 31 March
2009.
Income
from operations almost stayed flat at Rs 1.23 billion while
total expenditure rose 27 per cent to Rs 2.94 billion, directly
hurting the bottomline. Income from operations stood at Rs
1.23 billion and net loss at Rs 1.17 billion for the same
period of FY’08.
Realising
the grim situation, NDTV is taking measures to trim its staff
and overall costs by 20 per cent. “We have taken a number
of steps to reduce costs and increase revenues. The measures
include making the operations more efficient. As a result
of manpower planning and right-sizing, the costs and number
of personnel at NDTV are targeted to be down by over 20 per
cent in the immediate term. The management and staff at NDTV
have accepted both a salary cut and no increments for the
year,” the company said.
The
operative and administrative expenses of the company also increased
27 per cent to stand at Rs 528.2 million as against Rs 415.6
million in the year ago period. Production expenses increased
to Rs 973.2 million, up from Rs 640 million.
Although
NDTV reported a consolidated net profit of Rs 1.19 billion
for the full fiscal compared to a net loss of Rs 1.86 billion,
this was because it received $150 million (Rs 6.42 billion)
from its 26 per cent stake sale to NBC Universal. Without
this capital infusion, the company’s consolidated net
loss for the fiscal would have been Rs 5.23 billion.
Income
from operations during the fiscal increased by 34.47 per cent
to Rs 4.92 billion as compared to Rs 3.66 billion a year ago.
One
positive is that NDTV is sitting on cash, which, according
to the company, is more significant in the current credit
crunch scenario. “NDTV and its associated companies have
a healthy cash balance, which is significant in the media
industry and the current environment. This cash cushion will
be a major asset in overcoming challenges, if the global recession
is prolonged in any way,” it said in a release.
On
a standalone basis, NDTV posted a fourth-quarter net loss
of Rs 447.4 million as against a net profit of Rs 33.1 million
in the year ago period. Income from operations in the fourth
quarter has declined marginally by 7 per cent to Rs 841.3
million, as against Rs 905.4 million in the year ago period.
Operating and administrative expenses stood at Rs 426.2 million,
up by 115 per cent (Rs 198.5 million in corresponding quarter).
Even
for the whole fiscal, NDTV’s standalone business reported
a loss of Rs 731.8 million as against a profit of Rs 42.8
million a year ago. Income from operations in the year remained
Rs 3.09 billion, just over one per cent increase from the
previous fiscal’s Rs 3.06 billon.
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