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TV18 posts Rs 23-cr net profit in Q1FY20, Network18's loss widens

The broadcast arm of Network18 posts 10% growth in operating revenues wherein news business grows by 29% over the same period in last year

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BestMediaInfo Bureau
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TV18 posts Rs 23-cr net profit in Q1FY20, Network18's loss widens

Network18’s broadcast arm TV18 has posted a net profit of Rs 23 crore in the first quarter of the financial year 2019-20, compared with a loss of Rs 7 crore in the corresponding quarter of the previous year. However, Network18 widened its losses to Rs 128 crore in Q1FY20 from Rs 112 crore in the previous year.

TV18 owns and operates the broadest network of channels – 56 in India spanning news and entertainment. Supported by election-related advertising during the quarter, the news business grew by 29% as the operating revenue from the news television stood at Rs 298 crore in Q1FY20 compared with Rs 232 crore in Q1FY19.

The entertainment bouquet (Viacom18’s 32 channels + AETN18’s 4 infotainment channels) and distribution arm Indiacast grew by 5% during the quarter as the operating revenues from this segment stood at Rs 899 crore compared with Rs 857 crore in the previous year. Viacom18 and AETN18 are 51% entertainment subsidiaries of TV18, while distribution-arm Indiacast is a 50:50 JV of TV18 and Viacom18.

According to the company, the revenue growth of the entertainment business was impacted by tepid ad-environment led by advertisers paring spends amidst weak markets/macro/regulatory flux, and concentration of advertising around sports.

“New Tariff Order (NTO) implementation pains have smoothened as the value-chain adjusts to the new regime, and our subscription income has received a boost. Nevertheless, some flux in distribution and viewership is lingering, which we expect to taper away in the near term. As consumers make their pack/channel choices, we believe that strong content propositions and distinctive brands will continue to gain traction. Our bouquet is well-placed to benefit, through leading channels and improved distribution tie-ups,” the company said.

Network18’s revenues grew 11% YoY amidst a weak advertising environment, led by election advertising and strong growth in subscription income post implementation of new tariff order (NTO). EBITDA jumped sharply on operating leverage accentuated by cost controls.

Network18 digital revenues grew 34% YoY to Rs 47 crore. Growing ad-spends in News18.com (especially vernacular) boosted revenues amidst a tepid environment. 

Operating margin fell due to losses of FirstPost Print and marketing of CricketNext around IPL and the Cricket World Cup (Rs 6 crore in total), revamp of IN.com, and extension of MoneyControl into subscription models. 

During the quarter, HomeShop (erstwhile HomeShop18, an independently-operated associate of Network18) had raised a fresh round of funding from a new investor. The existing investors including Network18 did not participate in the round; and thereby got diluted to an insignificant minority and HomeShop ceased to be an associate of Network18 effective June 6, 2019. Exceptional items for the quarter ended June 30, 2019 represents impairment of investments in Homeshop. Network18 has since then sold the residual shareholding, thus completely exiting Homeshop.

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Adil Zainulbhai

Adil Zainulbhai, Chairman of Network18, said, “Amidst a challenging advertising environment and the implementation of a new tariff regime, we have continued to focus on creating great content for all media. Our regional portfolio continues to grow across both broadcasting and digital, and we believe that the connect our growing brands enjoy with the diverse Indian populace shall stand us in good stead.”

Info@BestMediaInfo.com

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