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Colors takes Viacom18 in the black; group to turn profitable in 2010

Colors takes Viacom18 in the black; group to turn profitable in 2010

Author | Dipali Banka | Friday, Jan 29,2010 7:14 AM

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Colors takes Viacom18 in the black; group to turn profitable in 2010

Viacom18, which operates MTV, Nickelodeon, Vh1 and Colors channels, has reported a net profit of Rs 56.3 million in Q3 ended December 31, 2009, as compared to a loss of Rs 416.28 million in the previous quarter. Colors reported a 41 per cent growth in advertising revenues as compared to the previous quarter, taking the total income of Viacom18 to Rs 2.66 billion from Rs 2 billion in the September quarter.

Colors, which was recently launched in the US and the UK as Aapka Colors, is planning to expand to other regions in the next two quarters. “Colors will be launched in Europe, South Africa and Canada in the next 4-6 months,” said Haresh Chawla, Group CEO, Network18, in an analysts’ conference call. He further said that a separate feed would go out for overseas channels, which would have customised programmes and innovations.

Colors reported an increase of around 8 per cent in its expenses at Rs 257 million from Rs 238.23 million in the September quarter. “This quarter has seen the heaviest investment for Colors with ‘Bigg Boss’, movie premiers, year-end programming and new show launches. Also, it is a season quarter for good ad sales. We expect the costs to come down and the revenues, too, but we expect to remain in the positive territory as we go along,” Chawla said. Meanwhile, Colors is working on several new bands of programming.

The news channel business of IBN18 (CNN-IBN, IBN7) reported positive EBIDTA at Rs 59 million in Q3 FY10, while IBN Lokmat reported a loss of Rs 43.6 million in the quarter, as compared to Rs 70.6 million in Q3 FY09.

Television Eighteen India Ltd (TV18), another listed subsidiary of Network18, reported a 1 per cent reduction in consolidated revenues YoY to Rs 1,289 million, while its consolidated EBITDA turned positive at Rs 94 million. TV18 operates business channels CNBC-TV18 and CNBC Awaaz and other divisions Web18, Newswire18, Infomedia18, Capital18, and the recently-launched Forbes India. The company spent a one-time restructuring expense of Rs 45 million in merging the broadcast operations of the two business channels. Coupled with other cost control and restructuring measures at Newswire18 and Infomedia18, TV18 reported a 16.6 per cent reduction in operating expenses (YOY) at Rs 1,157.23 million.

Though the revenues of news operations increased by 9 per cent at Rs 67.6 million over the same quarter last fiscal, it reported a loss of Rs 21.04 million as against a profit of Rs 4.6 million in Q3 FY09. News operations contribute over 52.5 per cent to the total revenues of TV18.

“TV18’s revenues and profitability is largely linked to IPOs and new mutual fund offerings, we haven’t yet seen a smooth flow of the same unlike in 2007-08,” noted an analyst. However, analysts are positive on TV18 with improving business sentiment and buoyancy in the capital markets. Chawla added, “We can now say with fair amount of confidence that the investment phase that we as a group had launched into around 2005 has been concluded in 2009. In 2010, we are at a stage that as a group we will be entering profitability.”

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