Network18 Q3FY19 results reported 18% YoY jump in EBITDA
TV18 reported a 41% YoY jump in operating EBITDA to Rs 115 crores in Q3FY19
Published - 15-January-2019
Network18 Media & Investments Limited and TV18 Broadcast Limited today announced its results for the quarter ended December 31, 2018.
Network18 reported an 18 per cent YoY jump in operating EBITDA to Rs 88 crores in Q3FY19, despite continuing investments into recent launches Colors Tamil and Colors Kannada Cinema. Operating revenue rose 20 per cent YoY led by advertising tailwinds, successful movies like ‘Andhadhun’, and healthy growth in subscription income. Operating leverage drove profitability, especially led by continued strong performance of regional channels across both our news and entertainment portfolios.
TV18 Broadcast Limited reported a 41 per cent YoY jump in operating EBITDA to Rs 115 crores in Q3FY19, despite continuing investments into recent launches Colors Tamil and Colors Kannada Cinema. Operating revenue rose 22 per cent YoY led by advertising tailwinds, successful movies like “Andhadhun”, and healthy growth in subscription income.
Adil Zainulbhai, Chairman of Network18, said, “Regional content consumption continues to see robust growth across all parts of the media industry that we play in, whether broadcasting or digital; and straddling news, entertainment and film. We continue to invest in digital with an eye on the future. We are extending our powerful brands across geographies, business models and mediums, to create the most compelling portfolio of properties in the opportunity-laden Indian media sector.”
Zainulbhai added, “TV18 has further solidified its leadership in as the top news player in the country, and our fast-growing entertainment portfolio is expanding our offerings as well as its core operating margins. Regional content consumption continues to be a key driver of growth across the board. We intend to continue investing to capture whitespaces and emerge as a leading, pipe-agnostic player in the broadcasting space.”
HIGHLIGHTS FOR THE QUARTER
The industry ad-environment was buoyant during the past quarter, though ad-spends were more concentrated around festive season and strong properties than previous years.
Broadcast subsidiary TV18 posted 22 per cent revenue growth on a comparable basis:
- Growing ad-spends in regional channels (news, led by regional elections; and entertainment, driven by rising consumption and value-perception) was a consistent theme for the TV18 channel portfolio.
- Subscription revenue for our entire bouquet grew 13 per cent YoY. Compelling bouquets have been created and advertised along with a-la-carte channel pricing, as per the new TRAI tariff order which promises to increase transparency in the broadcast value-chain.
News bouquet (20 channels) cemented its #1 position, with TV18’s viewership share in news rising to a highest-ever 11.5 per cent:
- News revenue grew at a robust 16 per cent. Regional news revenue grew 27 per cent YoY led by the viewership share of regional news cluster rising further to 6 per cent, vs 2.5 per cent two years ago.
- Hindi News channel News18 India solidified its #2 ranking, emerging as the primary engine of growth. The overall English news genre continued to face pressure.
- Business news channels maintained top positions amidst choppy markets.
Regional News losses have shrunk 68 per cent YoY to Rs 9 Cr: Rise in Government/ election-related ad spends substantially pruned gestation losses of 8 regional channels launched over FY15-17. Active cost control and efficiencies of scale also played a key role in reducing the drag.
Entertainment bouquet (Viacom18’s 31 channels + AETN18’s 4 infotainment channels) is #3 amongst national players, with share of entertainment viewership maintained at 11.2 per cent:
- Entertainment portfolio revenue grew 23 per cent YoY. As stated in previous quarters, some high value-and-impact Hindi GEC programming at Viacom18 was strategically shifted from H1 to H2, to coincide with market-appetite. This has resulted in improved topline growth, and has expectedly also partially limited the margin-expansion for the quarter. The Movie production and distribution revenue under Viacom18 motion pictures was Rs 106 Cr, versus a low base of Rs 20 Cr in Q3FY18.
(restated for current structure of ownership) Q3FY19 Q3FY18 Growth 9mFY19 9mFY18 Growth Consolidated Operating Revenue (Rs Cr) 1,524 1,267 20% 3,885 3,430 13% Consolidated Operating EBITDA (Rs Cr) 88 75 18% 200 134 49 per cent)
- Regional entertainment channels continued their viewership and monetisation improvements across most of our geographies.
Business-as-usual margins continued to rise: Entertainment EBITDA includes operating loss of Rs 31 Cr on account of new initiatives - Colors Tamil (launched in mid-Q4FY18) and Colors Kannada Cinema (launched in late-Q2FY19). Adjusting for operating losses of these new initiatives (i.e. launches made over past 4 quarters), BAU margins for Entertainment grew to 8.3 per cent from 6.4 per cent in Q3FY18. Entertainment EBITDA also encapsulates investments into projects planned for launch in coming quarters, as well as properties that were launched more than 1 year ago but are still under gestation.
Network18 digital content properties reach 24 per cent of total news consumption audience:
- Network18’s digital revenues from prime properties MoneyControl, News18 & Firstpost grew 27 per cent YoY to Rs 45 Cr in Q3. Other businesses including content production and print dragged overall revenue growth.
- Operating margin fell due to investments in revamp and extension of MoneyControl and Firstpost brands. While MoneyControl took initial steps to venture into transactions (mutual fund distribution) with the launch of MC Transact; Firstpost will soon be extended to discerning Print audiences through a weekly news-edition.
- Cricket portal CricketNext (#3 portal in India) was relaunched with a dedicated app.
- Traffic on Regional News content on News18.com rose 55 per cent, indicating the rising strength of the brand and the tailwinds in vernacular consumption in digital too, alongside broadcasting.
Leading entertainment ticketing platform BookMyShow entered into Live event production with world’s largest live entertainment company Cirque Du Soleil with their newest production show ‘Bazzar’. The show which was held for the first time in India in Nov-Dec18 at Mumbai & Delhi got an overwhelming response.
The scheme of arrangement for the merger by absorption of wholly-owned direct and indirect subsidiaries of Network18 and TV18 with the respective parent has been approved by the National Company Law Tribunal (Mumbai bench). The scheme has become effective from November 1, 2018, the appointed date being April 1, 2016. Accordingly, comparatives have been restated to include the financials of the transferor companies. The income-tax provision for the current quarter and nine months ended December 31, 2018 includes the impact of merger.
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