The share prices of Network18 Media & Investments and TV18 Broadcast, its television subsidiary, rallied 12 percent and 20 percent, respectively, on April 22 after reporting strong earnings growth in the March quarter as well as FY21.
Network18 was trading 11.95 percent higher at Rs 43.10 and TV18 Broadcast was up 19.60 percent at Rs 32.95 on the BSE
Network18 Media reported a more than nine-fold jump in net profit to Rs 547 crore for financial year 2021 boosted by expanding margins in the television news business and the digital news segment breaking even.
The company shrugged off the COVID impact to grow domestic advertisement revenues while keeping a tight leash on costs. Increasing television viewership and digital consumption after the pandemic have also contributed to the improvement in financials.
Full-year EBITDA (earnings before depreciation, interest, taxation and amortisation) for the group rose 29 percent to Rs 796 crore despite revenues dipping 12 percent in a year struck by the COVID-19 pandemic.
Also read: Network18 reports highest ever EBITDA margins in COVID year; net profit up 9 times in FY21
The group reported its highest EBITDA margins of 17 percent, up 5.4 percentage points from a year ago, thanks to cost controls. Higher operating profitability and a one-third reduction in interest costs led to net profits jumping over 9 times from the previous year.
This also allowed the group to pare debt to Rs 2,414 crore at the end of 31 March 2021 from Rs 3,265 crore a year ago.
"The group has successfully dealt with the challenges posed by the COVID pandemic and posted much-improved profitability in a difficult year. The connect of our diverse brands with consumers has only grown during this period," Adil Zainulbhai, Chairman of Network18 said.
Among its subsidiaries, TV18 Broadcast Ltd, which operates a 56-channel network - the broadest in India, reported a consolidated EBITDA of Rs 808 crore for FY21, up 15 percent. The company also reported its highest ever EBITDA margins of 18 percent thanks to cost controls. Thus, its net profit increased 79 percent from a year ago despite the 13 percent dip in revenues in the COVID year. What’s encouraging is that the TV viewership has increased with the number of households with access to television increasing to 210 million from 197 million in 2018, according to BARC.
Within the television business, margins in TV News nearly doubled to 16 percent in FY21. Although overall operating revenues in this segment contracted 4 percent, advertisement revenues grew through the year despite TV News ratings remaining under blackout since October 2020.
The growth in ad revenues had recovered to high single digits in the fourth fiscal quarter of FY21 and drove a 5 percent growth in overall revenues during this period. In this quarter, margins in the TV News business reached around 27 percent.
In Digital News, revenues grew 29 percent in FY21; this segment broke even at the EBITDA level for the full year. Indeed, revenues rose close to 50 percent year-on-year for the third consecutive quarter. This segment returned to profitability at the operating level reporting an EBITDA of Rs 3 crore.
In the last year, Network18 Media shares have shot up 87 percent and TV18 Broadcast share price jumped 58 percent.Disclaimer: Network18 is the parent company of TV18 Broadcast and Network18 Digital that publishes Moneycontrol.