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Rising expenses eat into profits of TV broadcasters in FY2015

14-July-2015
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Rising expenses eat into profits of TV broadcasters in FY2015

TV broadcasting industry in FY2015 saw subdued revenue growth and though many have earned profits, they were lower compared to the previous fiscal. Also, expenses and costs  incurred by these broadcasters have increased but many have managed to grow despite this. We take a look at some of the TV broadcasters’ consolidated FY2015 results in comparison to FY2014.

Operating income see lower growth in FY2015

ZEEL
Zee Entertainment Enterprises Ltd. (ZEEL) during the full fiscal year FY2015 saw its operating profits (EBITDA; Earnings Before Interest, Tax, Depreciation and Amortization) increase by a lower single digit growth of 4.1 per cent from FY2014. In FY2015 the operating profits increased to Rs.1,253.7 crore from 1,204.3 crore. ZEEL’s total operating income which includes income from other sales and services also saw a major drop in growth from 72.3 per cent in FY2014 to 10.4 per cent in FY2015. ZEEL’s total operating income increased Rs.4,421.7 crore in FY2014 from Rs.2,565.8 crore in FY2013, while in FY2015 it increased marginally to Rs.4,883.6 crore. Profit after tax (PAT) for ZEEL during the full year FY2015 saw a growth of 9.6% from the previous fiscal year. While in FY2014 it stood at Rs.890 crore, the PAT in FY2015 increased to Rs.975.5 crore in FY2015. The PAT growth was much lower in comparison with that seen in FY2014 against FY2013 which reported a 23.98 per cent growth. The PAT in FY2014 had increase to Rs 890 crore from Rs.718.15 crore in FY2013.

Advertising revenues for FY2015 increased by 11.7 per cent to Rs.2,660 crore from Rs.2,380 crore in FY2014. However, ad revenue growth had reduced almost by half in comparison to the previous year’s growth of 21.19 per cent where ad revenues grew from Rs.1963.8 crore in FY2013 to Rs.2,380 crore in FY2014. Subscription revenues declined marginally in FY2015 by 0.4% to Rs.1,793.4 crore from Rs.1,802.2 crore in FY2014. While subscription revenue during the previous fiscal year saw a growth of 11.02 per cent as it increased to Rs.1,802.2 crore in FY2014 from Rs.1,623.3 crore in FY2013. The broadcaster however saw income from other sales and services almost double in FY2015 with a 79.5 per cent growth as it stood at Rs.429.8 crore as against Rs.239.4 crore in FY2014.

Network18

Network18 during the financial year reported a 16.1 per cent growth in the consolidated operating revenue. The operating revenue increased to Rs.3,126.6 crore in FY2015 from Rs.2,692.4 crore in FY2014. The operating revenue increased by 12.1 per cent during the last fiscal as it increased to FY2014 in Rs.2,692.4 crore from Rs.2,400.8 crore in FY2013. The consolidated profit before depreciation, interest and tax (PBDIT) increased by 92.2 per cent and stood at Rs.153 crore in FY2015 from Rs.79 crore in FY2014.

TV18 saw its operating revenue grew by 17.8 per cent to Rs.2,318.4 crore in FY2015 from Rs.1,968.1 crore in FY2014. The operating revenue during the last fiscal grew by 16.8 per cent as it increased to Rs.1,968.1 in FY2014 from Rs.1,699.1 crore in FY2013. The broadcaster’s operating profits saw a larger growth of 19.8 per cent to Rs.252.5 crore in FY2015 from Rs.210.7 crore in FY2014. While profit before tax (PBT; before exceptional and prior period items) saw a 70.3 per cent growth in FY2015 to reach Rs.216 crore from Rs.126.8 crore in FY2014, the company suffered a net loss after tax.

Sun TV

Sun TV Network had seen its operating revenue grow by 7 per cent to Rs.2,243.62 crore in FY2015 from Rs.2,096.78 crore in FY2014. The total income saw a growth of 7.1 per cent as it increased to Rs.2,331.45 crore in FY2015 from Rs.2,175.99 crore in FY2014. The operating profit (PBDT; profit before depreciation and tax) however saw a double digit growth of 10.5 per cent as it increased to Rs.1699.82 crore in FY2015 from Rs.1,538.05 crore in FY2014. The network however saw only a 2.8 per cent growth in its net profit as it increased to Rs.737.23 crore in FY2015 from Rs.716.96 crore in FY2014.

Raj TV

Raj Television Network (Raj TV) saw a minor increase of 4.1 per cent in its total income as its total income in FY2015 rose to 83.89 crore from Rs.80.54 crore in FY2014. While in the previous fiscal the growth in total income was larger at 17.9 per cent as it increased to Rs.80.54 crore in FY2014 from 68.27 crore in FY2013. 

TV Today

TV Today Network saw its total income grow by 21.7 per cent to Rs.499.25 crore in FY2015 from Rs.410.14 crore in FY2014. TV Today Network too saw a larger growth in the last fiscal as it increased by 28.1 per cent, growing from Rs.320 crore in FY2013 from Rs.410.14 crore.

NDTV

NDTV Network saw a large growth of 19.4 per cent in its total income in FY2015 to Rs.433.93 crore as compared with Rs.363.16 crore in FY2014. The network however saw a decline in growth in the total income during the last fiscal as it recorded Rs.401.8 crore in FY2013 as against Rs.363.16 crore in FY2014.

Rise in expenditure of TV broadcasters

ZEEL

ZEEL’s total expenditure had increase by 13.1% as FY2015 total expenditure increased to Rs.3,697.2 crore from Rs.3,267.5 crore in FY2014. However, total expenditure growth had reduced significantly since the last fiscal which had saw an 88.6 per cent rise as FY2014 total expenditure stood at Rs.3,267.5 crore from Rs.1,731.6 in FY2013.  In terms of expenses both operating costs as well as advertisement and publicity expenses increased. ZEEL’s operating costs in FY2015 increased marginally by 3.4 per cent to Rs.2,139.3 crore from Rs.2,068.7 crore in FY2014. However, advertising and publicity spends saw a much higher growth of 50.1 per cent and increased to Rs.372.2 crore in FY2015 from Rs.247.9 crore in FY2014.

Network18

Network18’s total expenditure in FY2015 was Rs.3,048.7 crore and just a little lower than the operating revenues generated and had increased from Rs.2,695.5 crore in FY2014. Network18 however reported a loss in FY2015 which had increased by several fold since the previous year to Rs.1059.91 crore in FY2015 from reporting a loss of Rs.36.77 crore in FY2014. The reason for this according to Network18 is the company making a one-time exceptional adjustment of Rs.1045.3 crore. Network18’s media operations segment grew by 16.8 per cent in FY2015 to stand at Rs.3,061.69 crore as compared with Rs.2,620.69 crore in FY2014. However, operating profits from the media operations segment had dropped by 43.3 per cent to Rs.31.63 crore in FY2015 from Rs.55.77 crore in FY2014.   

TV18’s total expenses incurred in FY2015 had grew by 16.1 per cent and had increased to Rs.2,105.9 crore in FY2015 from Rs.1,813.2 crore in FY2014. TV18’s net loss after tax for TV18 in FY2015 was Rs.38.4 crore as against a net PAT of Rs.85.5 crore in FY2014. The reason for this was a onetime adjustment of Rs.233.29 crore made by TV18 in FY2015 which resulted in it reporting a loss. Programming costs as well as employee benefit expenses had seen an increase during the fiscal year, however marketing, distribution and promotional expense had reduced since FY2014. Programming costs increased to Rs.747.5 crore in FY2015 from Rs.508.7 crore in FY2014, an increase of 46.9 per cent. Similarly, employee benefits expense saw an increase of Rs.40.1 per cent and stood at Rs.399.1 crore in FY2015 as against Rs.284.7 crore in FY2014. Marketing, distribution and promotional expenses of the network decreased by 32.8 per cent as against the last fiscal year as it fell to Rs.449.8 crore in FY2015 from 597.4 crore in FY2014.

Sun TV

Sun TV’s total expenditure increased to Rs.1,333.4 crore in FY2015 from Rs.1,192.1 crore in FY2014, a 11.8 per cent growth. The network however had managed to lower the expenditure growth as it witnessed a 24.7 per cent growth in expenses from FY2013 to FY2014. Expenditure during FY2015 included operating costs (Rs.202.4 crore), depreciation and amortization (Rs.615.3 crore), employee costs (Rs.235 crore), IPL Franchise fees (Rs.85 core) and other expenditure (Rs.195.5 core).

Raj TV

Raj TV’s expenditure had increased marginally in FY2015 to Rs.58.12 crore in FY2015 from Rs.56.02 crore in FY2014. The operating profit (PBDT) however saw a minor decline in growth in FY2015 to stand at Rs.19.30 crore from Rs.19.85 crore in FY2014. Raj TV saw a decline in growth in FY2015 by 58.2 per cent as it registered a net profit of Rs.8.16 crore as compared with Rs.12.91 crore in FY2014.

TV Today’s expenditure to saw a rise in the network as it grew by 20 per cent to Rs.344.88 crore in FY2015 from Rs.280.17 crore in FY2014. The operating profit grew by 30.2 per cent to Rs.152.90 crore in FY2015 from Rs.117.38 crore in FY2014. The channel registered a net profit growth of 32.1 per cent as it increased to Rs.81.03 crore in FY2015 from Rs.61.32 crore in FY2014.

NDTV

NDTV’s expenditure and costs too saw a rise as it increased to Rs.406.20 crore in FY2015 from Rs.373.27 crore in FY2014. The network saw a positive growth in the operating profit (PBDT) at Rs.7.58 crore in FY2015 as against a loss of Rs.29.65 crore in FY2014. NDTV’s net loss in FY2015 was much lower at Rs.25.58 crore as against a net loss of Rs.53.56 crore in FY2014.  

Though most of the TV broadcasters saw a large growth in operating income or revenue, the costs and expenses also had increased several-fold resulting lower profits or in some cases result in broadcaster registering a loss.         

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