Jagran Prakashan missed street estimates when it reported a 1.58 percent decline in net profit at Rs 66.62 crore for the quarter ended December 31, 2014. It had posted a net profit of Rs 67.69 crore in the October-December period of 2013-14 fiscal, the company said in a BSE filing.
RK Agarwal, CFO of Jagran Prakashan, which publishes Hindi daily newspaper Dainik Jagran, says net profit has been affected by higher tax liability. However, he says that the company will report better numbers in the coming quarters.
He says Dainik Jagran's advertisement revenue rose 8 percent year-on-year.
Below is the verbatim transcript of RK Agarwal's interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.
Sonia: Tell us what the trends look like as far as the advertising revenues were concerned. This quarter you saw about 6 percent growth but going forward in the subsequent quarters, what kind of a growth are you forecasting?
A: Let me break our growth in topline into two parts – (1) core business that is Dainik Jagran and other is for the remaining businesses and other publications. As far as Dainik Jagran is concerned, it has recorded growth of 8 percent in advertisement revenue and 8.5 percent in the topline which is satisfactory and it makes us very confident that in coming quarters we are going to report better results in terms of bottomline as well as topline.
Lower growth in topline is not a concern; it is just a culmination of some policy decisions taken in the middle of the year, essentially addition of not chasing the unprofitable growth in topline or potentially unprofitable growth in the topline. This is why you see a jump of 20 percent in operating profit.
As far as net profit is concerned, we got affected by higher tax liability, in fact it is not comparable with the corresponding quarter of the previous year for the simple reason that last year we had tax benefit on account of accumulated losses of Nai Dunia, which we had acquired. We had lower tax liability of about Rs 12-13 crore, so if you add that then a growth of 15-16 percent in the bottomline.
Latha: What was the advertisement revenue growth and circulation revenue growth and what will it be in the current and next quarter?
A: In the current year, Dainik Jagran has registered a growth of 8 percent in advertisement revenue and in circulation revenue it registered a growth of 10 percent. In coming quarter, we expect to repeat the performance and in the next year we expect to improve it further.
Latha: You seeing any improvement in advertisement revenues, even outside elections?
A: Yes, we are seeing traction in pick up in the ad spend but still better days are ahead.
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