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HT Media top line up by fraction after 3.5% de-growth in ad revenues

23-May-2017
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HT Media top line up by fraction after 3.5% de-growth in ad revenues

The board of directors at HT Media approved the financial results for the fiscal year ended March 31, 2017, during the annual general meeting held on May 19. Even though the overall economic health of the media industry was hit due to the demonetisation of high currency notes, HT Media was able to largely insulate its business operations from the financial upheaval. On a positive note, the company’s profit (EBITDA) rose by 10.2% to Rs. 527.76 crore along with a minor revenue increase of 0.8%. However, the profit after tax (PAT) went down by 1.9% to Rs. 170.25 crore. 

Revenue growth

HT Media slightly increased its revenues from Rs. 2,657.7 crore to Rs. 2,681.55 crore in FY17. What went against the multimedia giant was de-growth of 3.5% as far as advertising revenues were concerned. Unable to cross the benchmark of Rs. 2,000 crore, they slipped to Rs. 1,913.1 crore from Rs. 1,982.5 crore. Pinning the blame on demonetisation for the slowdown in “advertising across categories and regions”, a stock exchange filing by HT Media pointed out that they primarily withstood the crisis owing to a “wide-ranging cost restructuring exercise” undertaken earlier this year.

Despite the dip in advertising revenues, circulation revenues grew by 1.6% from Rs. 299.4 crore to Rs 304.2 crore. Quite importantly, other revenue streams managed an impressive growth of double digit percentage points. It increased by 23.6% from Rs. 375.8 crore to Rs. 464.3 crore.

Segment-wise performance

The printing and publishing business continues to be the backbone of HT Media’s financial operations. The segment contributed the largest revenue share of Rs. 2,132.5 crore. What can’t be ignored is that the segment de-grew by 4.89% as it had accumulated Rs. 2,242.35 crore in FY16. Apart from that, revenues from the radio broadcast and entertainment operations increased from Rs. 116.96 crore to Rs. 158.71 crore.

Having vowed to prepare itself for a digital future, HT Media achieved the task of pushing the scale of its digital business beyond the mark of Rs. 150 crore. The revenues from digital went up to Rs. 151.36 crore from Rs. 140.33 crore. The newly-created segment of multimedia content management, which charges sourcing fee from other segments for providing content, managed to rake in Rs. 194.55 crore as revenues.    

Expenditure incurred

At the end of FY17, the sum total expenditure of HT Media stood at Rs. 2,373.67 crore as compared to Rs. 2,343.63 crore during the earlier fiscal. The costs incurred on raw materials, however, reduced by 3.7%. It decreased to Rs. 696.48 crore from Rs. 722.95 crore. Other expenses were also cut short by 3.7% from Rs. 907.14 crore to Rs. 873.88 crore.  

A significant expenditure head in the form of employee benefits increased. The expenditure involved herein went up to Rs. 583.53 crore from Rs. 548.69 crore. Finance costs and depreciation/amortization expenses were at Rs. 95.12 crore and Rs. 124.76 crore, respectively.

Profit/loss positioning

Continuing to remain profitable, the EBITDA percentage increased even as PAT numbers slipped. The company posted a profit (EBITDA) of Rs. 527.76 crore, up by 10%, when compared with FY16’s figure of Rs. 478.93 crore. EBITDA margin also strengthened to 19.7% from 18% previously. But the profit after tax (PAT) margin lessened from 6.5% to 6.3%.

PAT at HT Media fell by 1.9% from Rs. 173.49 crore to Rs. 170.25 crore. From the segment-wise perspective, the profits from printing and publishing business decreased to Rs. 240.85 crore from Rs. 331.06 crore. Radio broadcast business’ profit also de-grew from Rs. 20.04 crore to Rs. 10.31 crore. Multimedia content management segment remained profitable at Rs. 22.55 crore whereas losses from digital operations decreased to Rs. 38.91 crore from Rs 65.33 crore. With the aim of tight cost control in the short term, HT Media has set for itself the target of improving the top line of its print as well as digital business in the near future.

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