FY-2014: Network18 Media operations segment reports operating profit of Rs 56 crore

BENGALURU:  Network18 Media and Investments Limited (Network18) Media Operations segment reported an operating profit of Rs 55.77 crore in FY-2014 as compared to a loss of Rs 151.09 crore in FY-2013. The segment reported a revenue of Rs 2,562.49 crore in FY-2014, 17.35 per cent more than the Rs 2,183.66 crore in FY-2013.

Overall, in FY-2014, Network18 has reported a loss of Rs 36.77 crore, much lower than the loss of Rs 105.46 crore in FY-2013. Consolidated revenue in FY-2014 at Rs 2,682.39 crore was 13 per cent more than the Rs 2,382.69 crore in FY-2013.

Note :  100,00,000=100 Lakh = 1 crore = 10 million.

Network18 managing director Raghav Bahal said, “We are enthused by the turnaround performance of Network18 for this financial year. All our businesses have delivered strong  operating performances and contributed positively to achieve a new milestone in operating profits this year, despite the continued uncertainty in the macro-economic environment. We are confident of sustaining our growth trajectory, as we continue to extract value from our existing operations as well as profitably grow our newer initiatives.”

Let us look at the FY-2014 and Q4-2014 numbers reported by Network18

The company reported a 1.47 per cent growth in Total Income from Operations at Rs 738.32 crore in Q4-2014 as compared to the Rs 727.59 crore in the immediate trailing quarter and 8.66 per cent more than the Rs 679.49 crore in the year ago quarter Q4-2013.

Network18 reported a consolidated loss of Rs 4.12 crore in Q4-2014, much lower than the loss of Rs 11.72 crore in Q3-2014 and as against a profit of Rs 0.47 crore in Q4-2013.

The company’s Total Expense (Tot Exp) for FY-2014 at Rs 2695.58 crore (100.12 per cent of Total Income from operations) was 7.14 per cent more than the Rs 2515.98 crores (105.59 per cent of Total Income from operations) in FY-2014. Total Expenditure for Q4-2014 at Rs 726.07 crore (98.34 per cent of Total Income from operations) was 5.6 per cent more than the Rs 687.59 crore (94.5 per cent of Total Income from operations) in Q3-2014 and 6.25 per cent more than the Rs 683.35 crore in Q4-2013.

Network18’s programming cost in FY-2014 at Rs 522.47 crore (19.41 per cent of Total Income from operations) was 7.81 per cent more than the Rs 484.63 crore (20.34 per cent of Total Income from operations) in FY-2013. Programming cost in Q4-2014 at Rs133.82 crore (18.13 per cent of Total Income from operations) was 14.18 per cent lower than the Rs 155.94 crore (21.43 per cent of Total Income from operations) in Q3-2014 and 25.08 per cent more than the Rs 106.99 crore (15.75 per cent of Total Income from operations) in Q4-2013.

The company has brought down its finance costs to less than half (by 54.97 per cent) in FY-2014 at Rs122.47 crore (4.55 per cent of Total Income from operations) as compared to the Rs 271.98 crore (11.41 per cent of Total Income from operations) in FY-2013. Finance cost in Q4-2014 at Rs 32.08 crore (4.35 per cent of Total Income from operations) was 3.94 per cent more than the Rs 30.87 crore (4.24 per cent of Total Income from operations) in Q3-014 and 17.6 per cent lower than the Rs 38.93 crore (5.73 per cent of Total Income from operations) in Q4-2013.

The company’s Film Production and Distribution (Film) segment reported a fall in revenue of 41.32 per cent to Rs101.77 crore in FY-2014 from Rs 173.43 crore in FY-2013. Network18’s film segment reported a negative revenue of Rs 14.61 crore in Q4-2014 as compared to Rs 35.53 crore in Q3-2014 and Rs 38.93 crore in Q4-2013.

Film segment reported an operating loss of Rs 24.30 crore in FY-2014 as compared to a minor loss of Rs 0.42 crore in FY-2013. The loss in Q4-2014 at Rs 4.59 crore was much lower than the loss of Rs 14.28 crore in Q3-2014. Film segment had reported an operating profit of Rs 6.16 crore in Q4-2013.

Here is what the company has to say:

Note:  Reported results are inclusive of the financial consolidation of ETV News (100 per cent) and ETV Entertainment (50 per cent) from 22 Jan 2014 till 31 March 2014. On 22 Jan 2014, post receipt of required regulatory approvals, TV18 completed the acquisition of the ETV channels – 100 per cent of ETV News, 50 per cent of ETV Entertainment and 24.5 per cent of ETV Telugu. In accordance with the accounting policies, ETV News and ETV Entertainment have been consolidated at 100 per cent on a line by line basis (Refer Note No. 7 in the Notes section).

Operating profits (EBITDA) turned around from a loss of Rs 39.3 crore in FY-2013 to a profit of Rs 87.2 crore in FY-2014, led by a consistent increase in profits generated by the television operations and reduction  in operating losses of the digital businesses.

PBT for the year turned around from a loss of Rs 136.9 crore last year to Rs 16 crore this year led by a strong operating performance and a sharp reduction in interest cost from Rs 272 crore last year to Rs 122.5 crore this year.

Reported operating revenue in Q4-2014 was Rs 738.3 crore, up 8.7 per cent YOY. Reported operating profit (EBITDA) in Q4FY14 was Rs 42.3 crores, up from Rs 12.7 crores last year.

Television and Motion Pictures

Reported annual revenues on a consolidated basis are up 15.8 per cent to Rs 1,968.1 crore and operating profits (EBITDA) have nearly doubled to Rs 210.5 crore.

On a consolidated basis, annual advertising revenues grew 11 per cent year on year. Net Distribution Income (NDI) continued its steady climb to close at Rs 178 crores, up from Rs 15.7 crores in FY-2013.

In this financial year, operating profits from our television operations doubled from Rs 114.2 crore to Rs 233.6 crore. General News delivered a 6.9x growth in annual operating profits and grew to Rs 22 crore.

Business News remained stable despite a downturn in the markets and the absence of the Union Budget.

Infotainment broke into positive territory and our Entertainment television business registered a 2.9x growth in operating profits (EBITDA) which stood at Rs108.4 crore.

In Q4-2014, the company successfully launched MTV Indies and Rishtey in the entertainment segment and ETV Bangla, ETV Kannada and ETV Haryana in the regional news segment.

 Reported revenues for Q4-2014 stood at Rs 563.3 crore, up 18.7 per cent and operating profits (EBITDA) in Q4-2014 stood at Rs 69.7 crore, up 101 per cent YOY.

Digital content and eCommerce

FY-2014 revenues from the digital content and eCommerce business grew by 32 per cent from Rs 400.9 crore last  year to Rs 530.8 crore this year. Operating losses (EBITDA) of our digital business were steadily  reduced in this financial year from Rs 125.4 crore to Rs 80.6 crore.

In Q4-2014, the company successfully launched ‘FirstBiz’, a business news portal under the ‘FirstPost’ stable and ‘’, a web, mobile and tablet service which focuses on local news at the state and city level.

Q4-2014 revenues from the digital businesses stood at Rs 149.4 crore and grew by 35 per cent over the last year.

Network18 CEO B Saikumar said, “All our broadcast operations continued to show improvement in margins. IndiaCast has delivered a stellar swing in net distribution income. Our General news operations have turned around this year, due to a strong focus on operational efficiency. Infotainment operations at A+E Networks I TV18 broke into positive territory. Our broadcast entertainment business at Viacom18 grew profitably. Our digital businesses displayed encouraging revenue growth, successfully launched FirstBiz and and narrowed operating losses. We are focused on sustaining our strong performance in the coming year.”

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