BARC India FY21 revenue dips 21% to Rs 251 crore; meter count to go up to 52,000
TV rating agency reported net profit of Rs 44 crore
Broadcast Audience Research Council (BARC) India, the joint industry body founded by broadcasters, advertisers, and media agencies, has posted a 20.82% decline in revenue at Rs 251 crore for the fiscal ended 31st March 2021 compared to Rs 317 crore in the previous fiscal.
According to a rating rationale report by Crisil, BARC India's FY21 revenue declined since the lockdown imposed to contain the Covid-19 pandemic and weak economic activity led to a drop in the ad revenue of broadcasters. The TV rating agency earns more than 80% of its revenue from the broadcasters.
As per the contract between BARC and broadcasters, the agency has the flexibility to modify the fee charged from broadcasters, which helps control volatility in cash flow. Broadcasters have to pay 0.8% of their ad revenue as a fee to the BARC. In case of higher capital expenditure (capex) or operational expenditure in any particular year, the fee can be increased appropriately. The broadcasters are billed in advance on a quarterly basis.
BARC India has reported a net profit of Rs 44 crore for the fiscal under review, as against a net loss of Rs 5 crore in the previous fiscal. The cost-rationalisation measures undertaken by the company ensured better operating profit in fiscal 2021. It is pertinent to note that the FY21 revenue and net profit numbers are provisional.
The joint industry body refused to offer any comment on the Crisil report.
Cash accrual is expected at Rs 30-40 crore per fiscal over the medium term, against term debt obligation of around Rs 38 crore in fiscal 2022. Cash and equivalent stood at over Rs 26 crore as on March 31, 2021. BARC has access to fund based limits of Rs 26 crore, which was utilised 10% on an average during the first three months of fiscal 2022.
Set up in fiscal 2010, BARC is a Section 25 company which owns and operates the TV viewership system in India, and provides related services. It is owned by Indian Broadcasting and Digital Foundation (IBDF), Indian Society of Advertisers (ISA), and Advertising Agencies Association of India (AAAI), with shareholding of 60:20:20, respectively.
BARC uses the audio watermarking technology, and deploys around 46,000 BAR-O-meters. The company is venturing into viewership estimation for digital platforms, and is increasing the number of BAR-O-meters deployed.
Meterology Data Private Limited (MDPL), a 51:49 JV between BARC and TAM Media, is expected to incur a capex of Rs 12-15 crore in order to increase the meter count to around 52,000 over the next year from 46,000 currently. According to a rating rationale report by Crisil on MDPL, the capex will be financed through internal accrual and fresh debt.
MDPL's revenue for FY21 declined 22.22% to Rs 77 crore as against Rs 99 crore in the previous fiscal. It reported a net profit of Rs 3.2 crore, compared to a net loss of Rs 19 crore. The company deploys and maintains meters in 'panel households' to collect raw data on TV viewership for BARC. It was formed as a new company to integrate the services of BARC through additional infrastructure (manpower and devices) of Television Audience Measurement to meet the sample requirement posed by the government.
The JV company's adequate liquidity is driven by expected cash accrual of Rs 15-20 crore vis-à-vis debt repayment of around Rs 11 crore in fiscal 2022. The company had cash and equivalents of Rs 4 crore as on March 31, 2021.
Crisil has reaffirmed its 'CRISIL A/Stable' rating on the long-term bank facilities of BARC India and MDPL. The rating continues to reflect the healthy business risk profile of BARC as the sole TV (television) viewership agency in India, and its established business model with high revenue visibility and customer retention. The rating also factors in the entity’s strategic importance to member entities, which have extended corporate guarantees for its debt. These strengths are partially offset by a modest financial risk profile.
It has also taken into account the recommendation paper on review of Television Audience Measurement and Ratings in India introduced by the Telecom Regulatory Authority of India (TRAI) on April 28, 2020. The recommendations are being reviewed by the Ministry of Information and Broadcasting (MIB) in consultation with various stakeholders.
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