HT Media Q1 result: Consolidated revenue increases but print revenue shrinks

HT Media and Hindustan Media Ventures Limited have declared their Q1 FY 2020 results. According to the company statement, advertising revenue for the print business continues to be under stress with a higher impact on the English papers. However, the company saw a positive impact due to the softening of newsprint prices, which led to the growth in operating profits and improvement in profitability.

However, the loss of Rs 148 crore that the company has posted is majorly because of pay out for the acquisition of majority share in Next Mediaworks, the company that runs Radio One, and its subsidiaries.

The consolidated total revenue for the first quarter stood at Rs 588 crore, which is a 3% growth versus last year. EBITDA (Earnings before interest, tax, depreciation and amortization) for the same period is at Rs 89 crore, which is 42% higher, with a margin improvement of about 4% points.

PAT for the first quarter has come at Rs 28 crore (which is 511% higher at a PAT margin of 5%) versus Rs 5 crore in the same period.

As far as ‘Print’ is concerned, the company’s ad revenues have been soft. And the decline has been 9% with total revenues for the first quarter coming at Rs 362 crore as against Rs 399 crore in the same period last year.

The company maintained that the outlook for advertising revenue for the next few quarters is dependent on resurgence in the economy and growth in corporate earnings. With the likelihood of revenue pressure continuing in the short term, the focus remains on costs, operating efficiencies and new initiatives to manage the challenging environment.

Circulation revenue has come down to Rs 64 crore, which is a degrowth of 7%. However, what’s heartening is the fact that the realisation per copy still continues to be strong. Print order has come down to that extent due to the taking out unproductive copies, etcetera, it said.

The company reiterated that due to the merger with Next Mediaworks, operations have been integrated with the radio business. This has definitely impacted the operating performance. Operating revenues stood at Rs 454 crore, which is a decline of 6%, with operating EBITDA at Rs 55 crore, a decline of 15%. The operating EBITDA margin is 12%.

In the Hindi segment, ad revenue has come down to Rs 164 crore as against Rs 168 crore. There is a marginal decline of 3%. Circulation revenue from Rs 53 crore has come down to Rs 50 crore, which is a 7% decline. “Strong revenue from election campaigns, partially offset by decline in government advertisement due to the code of conduct; continued focus on yield improvement despite slowdown in ad volumes and circulation revenue has grown on a sequential basis, though it declined versus last year,” said Piyush Gupta, Group CFO, HT Media Limited. 

The results indicated that the radio business continues to do well with good growth in the top line. It should report stronger numbers once synergies with the newly acquired business kicks in. After integrating with Next Mediaworks, business grew at 37%. Even for the base station without Next Mediaworks, the growth has been 9% and EBITDA margin at 34%. 

“Revenue is primarily driven by yield growth on account of rate hike across the stations. And ad revenue growth in key categories such as FMCG and real estate. With this, the operating margins have been at 25% with operating EBITDA at Rs 16 crore,” said Gupta.

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