Expect to breakeven in Q4FY13: Reliance Broadcast Network

Reliance Broadcast Network (RBNL) has narrowed its consolidated net loss to Rs 28.70 crore for the quarter ended June 30, 2012. The company had registered a consolidated net loss of Rs 29.13 crore in the same period last year.

In an interview to CNBC-TV18, Tarun Katial, chief executive officer of Reliance Broadcast says, the company expects to breakeven in Q4FY13. "Radio and television, which are now our primary focus areas, will see significant revenues in Q3 and Q4; marginal to good revenues in Q2. So, we are hoping that at the end of this year, things being where they are, we should be able to exit at breakeven," he elaborates. Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Ekta Batra. Q: How exactly the television, radio business did this quarter? We understand the consolidated income was down 25% to Rs 51 crore, where exactly did you see the maximum pressure? A: One of the good things, which has happened in the business, is that in a muted environment, we have been able to bring down our operating loss by almost 60% quarter-on-quarter (QoQ). That is on the back of our TV business. Our TV business operating loss came down by 56%. That is on the back of digitisation and carriage cost. Carriage cost has come down by 70%. That is an extremely positive indicator for the TV business going forward. We are in our fifth quarter of our TV business and the digitisation couldn’t have come at a better time. For channels like ours, market is almost digitised. So, clearly the TV business is starting to get near its breakeven levels. We are hoping that if the markets don’t plunge too badly on the advertising side, we should exit the current fiscal at a breakeven level. Q: Revenues are also not terribly gung-ho, isn’t it? The radio business is down about 18% to Rs 39 crore, outdoor business is down, though it is a smaller part of your business. The production business is somewhat up. Television business is down. Revenues everywhere are crunched. A: If you look at year-on-year (YoY), they are all up. If you look at Q4 of any media company, Q1 of any media company will always be down because the second half in advertising is far bigger than the first half. The advertising environment was very tough in Q1. I don’t think as an individual company there is anything much that anybody could do. I think we have been able to manage our costs very well to be able to reduce our operating loss quite dramatically by 60%. Q: Do you see things improving? I appreciate the fact that you have juiced out as much as possible by controlling costs, but there would be a limit to that. Can you give me a sense as to how revenues might grow in each of four businesses in the current year? A: Any media business even historically or in the worst year is 40:60 first half: second half. So, revenues do climb up very significantly in the second half. _PAGEBREAK_ Q: What is the revenue uptick that you are expecting? A: Radio and television, which are now our primary focus areas, will see significant revenues in Q3 and Q4; marginal to good revenues in Q2. So, the thinking is that we done what we could at the cost. Anything that now comes on the revenue will further add to the bottom-line and reduce our point of breakeven even further. So, we are hoping that at the end of this year, things being where they are, we should be able to exit at breakeven. Q: Considering that the environment that we are currently working with, how aggressive would you be in terms of expanding your radio portfolio? How aggressive would you bit on phase III, if it does come about? A: We have discussed phase III so many times. Until the government has some indicator on when it is going to happen and what environment is going to happen in, there is hardly any point talking about it. I have been talking about it so many times that it is almost embarrassing to discuss it any further. We are hopeful that it will happen in early part of next year. We are also hopeful that the environment will be fairly stable and better by then. Q: Digitisation is almost going that way, isn’t it? We understand there is a new deadline coming. A: Good part, for our channel, is that we have done what it needed to be done on the digital world. For our channel, we are already operating in a digital environment. Q: What about the TV business, any new launches that we can expect? A: We have signed a definitive agreement with RTL. We are looking to see what will be the possible launch timeline for Thrill. It is frozen, as of now, but it is under work. Q: Finally, you said breakeven, is that Q4 breakeven or would it be breakeven as a year? A: Q4 breakeven.