At HT Media Limited, the previous year ended with the beginning of a cost-cutting exercise, even as the company went about strengthening its core editions in the cities of New Delhi, Mumbai, Chandigarh, Lucknow and Patna, industry insiders confirm that Sharad Saxena, Executive Director – Operations & HR informed employees in early January that HT Media was going to shut down four editions besides ceasing operations in another three cities.
The decision became effective from January 10. Meanwhile, according to reports, the business bureau of Hindustan Times in the cities of New Delhi and Mumbai also halted operations as did editions and products in Allahabad, Bhopal, Indore, Kanpur, Kolkata, Ranchi and Varanasi.
On the other hand, Hindustan Media Ventures Limited (HMVL), another listed company belonging to the HT Media family, released its financials for the third quarter on January 18. It is noteworthy to mention that HMVL is the publisher of Hindustan, a Hindi language daily. Other language properties such as the monthly children’s magazine Nandan and Kadambini, a socio-cultural magazine, are published by it as well.
Employee costs down at HMVL
Interestingly, HMVL’s expenditure on employees during the third quarter came down by almost 80%. While the cost incurred by HMVL on employees stood at Rs 31 crore in Q3 FY 15-16, it went down to Rs 6.4 crore during the three month period between October to December 2016. The year to date figure replicate the trend with a fall of 22.5% in employee costs. Between April to December 2015, HMVL’s employee costs were Rs 89.2 crore. They dwindled to Rs 69.1 crore during the same period in the ongoing fiscal.
This happened at a time when the third quarter’s overall expenditure rose by 5.2% from Rs 180 crore to Rs 189.4 crore. The increase can be attributed to a 62.4% hike in other expenditure from Rs 59.7 crore to Rs 97 crore. Sum total of costs over a period of nine months from April to December 2016 also increased by 5.2% to Rs 550.7 crore on the back of 22.4% rise in other expenditure.
Advertising revenues took a hit
Advertising revenues for Q3 suffered by 7% as it declined from Rs 181.6 crore to Rs 168.8 crore. Simultaneously, circulation revenues grew by 4.3% whereas other revenues gained an upward movement of 63%. The end number for the circulation and other revenues stood at Rs 56.1 crore and Rs 26.9 crore, respectively.
If one takes into account the year to date figures, advertising revenues managed to remain the same at Rs 516.6 crore but alternate revenue streams recorded positive growth. Total revenues during Q3 declined marginally from Rs 251.9 crore to Rs 251.8 crore. But it managed a growth of 5.7% on a comparative basis between April to December 2016. They went northwards from Rs 732.7 crore to Rs 774.3 crore.
Profits decreased during the third quarter
Even though HMVL retained profitability in third quarter, its profits decreased. During Q3 FY 15-16, profit (EBITDA) was Rs 71.9 crore but it slipped to Rs 62.5 crore during Q3 FY 16-17. Keeping aside the quarterly reduction in profits by 13.2%, profits maintained a decent growth of 6.8% according to the year to date numbers. During the nine months between April to December 2016, profits shot up to Rs 223.6 crore from Rs 209.4 crore during the corresponding timeframe last fiscal.
The third quarter was also a witness to the acquisition of HT Digital Streams Limited’s 85,87,896 equity shares by HMVL. Consequentially, HMVL now holds 42.83% of HTDSL’s equity shares while HT Media Limited holds 57.17%. The company attributed the quarterly dip in profits (EBITDA) “due to HTDSL carve-out impact for the period April-Dec’ 16 being partially offset by 3.8%” cut in cost of raw materials.
Recently, Shamit Bhartia, son of HT Chairperson Shobhana Bhartia, took over as the Managing Director of HMVL for a period of 5 years from February 4, 2017 onwards. Earlier on January 31, 2016, he relinquished the post of Joint Managing Director at HT Media.