Network18 Media & Investments Ltd reported a consolidated net profit of Rs 121.51 crore for the quarter ended 30 June 2021 against a loss of Rs 60.60 crore a year ago.
A concerted thrust on original content production, resilience of the TV news business helped sustain revenue momentum despite the second wave of the pandemic. Operating margins in the TV business were the highest ever for the June quarter and Digital News maintained its break-even.
Revenue from operations for Q1FY22 came in at Rs 1,214.43 crore compared to Rs 807.07 in Q1FY21 and Rs 1,414.70 crore in the March 2021 quarter.
"While advertising hit a speedbreaker (primarily in entertainment), growing engagement on our platforms across TV and Digital make us confident of delivering for all our stakeholders even amidst a choppy environment,” said Adil Zainulbhai, Chairman of Network18.
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Operating margin boost
Consolidated EBITDA (earnings before interest, taxes, depreciation and amortisation) jumped 6 times from a year ago to Rs 188 crore against Rs 27 crore. The June 2020 quarter was affected by the first wave of COVID-19; however, even compared to the June 2019 quarter consolidate operating profits rose 306 percent.
Operating EBITDA margin for the quarter stood at 15.5 percent against 3.4 percent a year ago. The entertainment business margin was healthy at around 17 percent, and news margin at 15 percent.
Apart from the rise in revenues, a tight control on costs boosted margins.
"Consistent controls on costs across business lines led a reduction in group operating expenses, despite cost-pushes in content and distribution. Even compared with Q1FY20, operating expenses fell 14 percent YoY," the company said.
TV revenues stay strong
While domestic ad revenues were hit in the June 2021 quarter by the second wave, the company said it continued to focus on original content product.
Thus, it was “able to re-scale ad-revenue to the same levels as in Q1FY20 (which was not impacted by COVID-19 in any manner),” it said in a statement.
Overall TV viewership rose 9 percent QoQ led by lockdowns, continuation of original content telecasts.
Entertainment viewership also grew 8 percent QoQ, some of which was contributed by sports. Pay-GEC viewership also grew in single digits across both Hindi and Regional as original programming continued unabated to a large extent, it added.
"Our share of TV entertainment rose further to around 11 percent in Q1FY22, up sharply from a low of around 9.2 percent in Q1FY21," TV18 said.
The TV news business remained resilient led by a rise in news consumption and digital events replacing physical ones. The company said its TV news ad-revenue remained in growth territory versus Q1FY20, adjusted for election-linked advertising.
"News genre viewership jumped 28 percent QoQ led by the second wave and multiple state and elections. The salience and resilience of our fully-pay news-network shone through," a statement said.
Digital maintains breakeven; subscriptions grow
Digital news was also minimally impacted by the second wave. Operating revenues in this segment grew 89 percent from a year ago to Rs 56 crore.
"Growing salience of the medium for advertisers as well as consumers, especially during COVID peaks, supported revenue," Network18 said.
Overall subscription revenues grew 4 percent year-on-year.
"Domestic subscription revenue continued to grow led by expanded tie-ups in TV and Digital (both B2B and B2C), and international subscription remains under stress," said a statement from the firm.
Pay product Voot Select was the fastest to reach on million B2C subscribers in its first year. Niche edutainment pay-platform Voot Kids witnessed a 25 percent QoQ growth in overall watchtime.
Moreover, Moneycontrol Pro was the only Indian app ranked amongst the top-20 global news subscription services, and is the third largest such platform in Asia according to the International Federation of Periodical Publishers.
Disclaimer: Network18 is a subsidiary of Network18 Media & Investments Ltd which publishes Moneycontrol.
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