Category: Financials

Q3-2016: TV18 YoY EPS up 31%

BENGALURU: The Mukesh Ambani magic seems to be rubbing off on TV18 Broadcast Limited (TV18) acquired by his group in late May 2014. Be it Business News or GEC, most TV18 channels were rated at No. 1 or 2 as per BARC India ratings for the month of December 2015. In the case of general news, the company’s CNN-IBN was rated at the third spot.

TV18 reported a 31.4 per cent YoY increase in consolidated earnings per share at Rs 0.46 in the quarter ended 31 December, 2015 (Q3-2016, current quarter) as compared to the Rs 0.35. EPS in the current quarter almost quadrupled QoQ (3.83 times) as compared to the Rs 0.12. The company reported net profit after tax (PAT) for the current quarter at Rs 78.29 crore (11.3 per cent margin) as compared to Rs 60.38 crore in Q3-2016 (9.9 per cent margin) and Rs 20.27 crore (3.3 per cent margin) in the immediate trailing quarter.

EPS for the nine-month period ended 31 December, 2015 (9M-2016) was Rs 0.57 as compared to a negative (loss) EPS of Rs 0.30 for 9M-2015. PAT for 9M-2016 was Rs 98.51 crore (5.2 per cent margin) as compared to a loss of Rs 50.94 crore during the corresponding nine-month period of the previous year. The company says that Q3-2016 numbers include operating loss of Rs 45 crore on account of new ETV news channels and Colors Infinity and also a one-time expense of Rs 10 crore for rebranding ETV regional entertainment channels as Colors. Further, 9M-2015 profitability vis-?-vis 9M-2016 was significantly influenced by advertisement income on account of the general elections and the union budget says the company.

Note: 100,00,000 = 100 lakh = 10 million = 1 crore

TV18 reported 14 per cent YoY growth in total income from operations (TIO) in Q3-2016 at Rs 692.42 crore as compared to Rs 607.23 crore and a 13.8 per cent QoQ growth as compared to Rs 608.53 crore. TIO for 9M-2016 increased 12.4 per cent at Rs 1897.63 crore as compared to the Rs 1688.65 crore in the corresponding period of last year.

January 15, 2016
Q1-2016 TRAI report: Radio industry performance improves

BENGALURU: The Telecom Regulatory Authority of India (TRAI) released combined advertisement (Ad) revenues of 239 private FM radio stations for the quarter ended 30 June, 2015 (Q1-2016) a few days ago. There were a total of 243 radio stations in the India as on that date.

Trends across 16 consecutive quarters (four fiscal years)

Please refer to Figures A and B below. The all India simple average revenue per radio station and the QoQ and YoY (year on year) change has been calculated using TRAI data – the overall ad revenue mentioned by TRAI divided by the number of radio stations, which have reported revenue numbers to TRAI.

As has been the trend over the period mentioned above, Q1 of a year is generally the leanest quarter in terms of ad revenue as per TRAI data. The second quarter – Q2 has the next lowest average ad revenues per station. Over the last two consecutive years FY-2014 and FY-2015, the highest ad revenue per radio station per year has been reported for the third quarter (Q3), while in FY-2012 and FY-2013, the highest ad revenue was reported in Q4, so there is a tie for the first and the second highest quarters in terms ad revenue per station between Q3 and Q4.

For the year ended 31 March, 2015 (FY-2015), this website had mentioned that the numbers reported by the radio industry for the year were the probably the best (Indiantelevision link, Radioandusic link) so far. Despite an 8.88 per cent QoQ (quarter on quarter) fall in average ad revenue per station in Q1-2016, the ad average revenue per station of Rs 1.65 crore is the best yet for the first quarter over a period of four years. In Q1-2015, YoY ad revenue grew 11.90 per cent. Hence historical trends indicate that FY-2016 could be an even better year in terms of average revenue per station and overall revenues.

Note (1): (a)100,00,000 = 100 lakh = 10 million = 1 crore

(b) The author has taken the liberty to introduce a measure – average revenue per radio station. This is a rough yardstick and may not necessarily be indicative of a station or a networks performance, because factors such as geography and market conditions within the area of operations are among many of the factors that will also determine performance.

(c) This report is skewed more towards general financial numbers in terms of revenue and results, and not operational performance.

The TRAI report for Q1-2016

As per the TRAI report for Q1-2016, the total advertisement revenues reported by 239 radio stations was Rs 393.9 crore or Rs 1.65 crore per station. In the immediate trailing quarter of Q1-2016, that is, for Q4-2015 (quarter ended 31 March, 2015), the combined advertisement revenues reported by 241 radio stations was Rs 435.89 crore or Rs 1.81 crore per station, hence the above mentioned QoQ drop of 8.88 per cent (Rs 0.16 crore) in ad revenue per station. For Q1-2015 (quarter ended 30 June, 2014 or Q1-2015), 241 radio stations reported combined ad revenues of Rs 354.97 crore or Rs 1.47 crore per station, or the above mentioned YoY growth of ad revenue per station of 11.90 per cent or Rs 0.18 crore per station in Q1-2016.

Please refer to Fig A. The slope of the simple linear trend line (the dotted black line with a red end in Fig A below) projects that the average ad revenue per station in Q2-2016 should be about Rs 1.78 crore, which would be significantly higher than the Rs 1.66 crore reported for Q2-2015. How much this figure is in line with the actual number depends upon the numbers reported by the radio companies and revealed by TRAI. But, if one were to go by the published Q2-2016 results of some of the players in this report, the combined revenues of these sample player has gone up in double digits Q2-2016 as compared to Q1-2016, and of course are higher than those reported for Q2-2015.

Further, Figure B below indicates that QoQ fall in ad revenue per station in Q1-2016 was the second steepest fall during a 13 quarter period starting Q1-2013 (Q1-2013 as compared to Q4-2012) until Q1-2016. The steepest QoQ fall in ad revenue per station was in Q1-2013 at 9.95 percent during the same period. The highest YoY rise in ad revenue per station was in 21.31 percent in Q2-2014. Q4 is another quarter that has seen QoQ dips in ad revenue per station in FY-2014 and FY-2015. YoY, ad revenue per station has always increased between Q1-2012 and Q1-2016.

Let us look at how a few radio networks performed:

Note (2): (a) This report considers PAT posted by two radio companies (ENIL – Radio Mirchi, 32 radio stations; Jagran Prakashan – Radio City – 20 radio stations), along with operating results of DB Corp (My FM, 17 stations); B. A.G.Films (Radio Dhamaal, 10 stations); HT Media (Fever FM, four stations); and TV Today (Oye! FM, six stations), or a total of six radio networks that represent 89, or 36.63 per cent of the 243 private FM radio stations in Q1-2016.

(b) While Q3 for the current fiscal (Q3-2016) has already ended on 31 December,2015 and financial results will be declared by the players in a few weeks times, individual Q2-2016 (quarter ended 30 September, 2015) results have already been reported by them. The Q2-2016 numbers of individual players in this report have been obtained from their filings with regulatory bodies, the TRAI number for Q2-2016 has been extrapolated and could prove to be inaccurate.

(c) Revenues for the sample stations mean Total Income from Operations and generally include ad revenue and other operating revenues.

(d) Phase III and other radio stations acquisitions: ENIL has received permission from the Ministry of Information & Broadcasting (MIB) to acquire four stations from TV Today Network Limited (Oye! FM), viz., those at Amritsar, Patiala, Shimla and Jodhpur – which the company says have been/will be re-branded and re-launched shortly as Mirchi, adding to its North India network strength. With another seven stations acquired in phase III auctions, the core Mirchi brand will now be available in 43 cities. There are/will be a total of 39 FM radio stations that Jagran Prakashan Limited currently has. This includes the existing 20 radio stations plus 11 stations acquired in phase III auctions and eight radio stations under the brand Radio Mantra. Radio Mantra was earlier operated by Shri Puran Multimedia, Jagran’s promoter group. Besides, the group also runs a web radio network with 21 web radio streams under Planetradiocity.com. During the Phase III auctions, DB Corp (My FM) acquired 14 frequencies, through which MY FM will extend its presence to seven states and 30 cities with 31 stations. HT Media acquired 10 radio frequencies during phase III auctions, taking its total radio stations to 14. However these changes are not considered here, for this report pertains to the period before the new stations were acquired.

Entertainment Network India Limited (ENIL) that operates brand Radio Mirchi is the only separately listed radio company in India and one of the most profitable ones by far. Other stations/radio brands of consequence, whose results are within the public domain have been considered in this report.

Please refer to Figure C below. The curved black line with a red extrapolated end (curve D in Figure C below) indicates the all India average ad revenue per station as per TRAI data. Three radio networks had average revenue per station that has consistently been higher than the all India average. Revenue per station was the highest in the case of Fever FM (Curve A in the Figure C below) at Rs 6.13 crore in Q1-2016 and 7.34 crore in Q2-2016, followed by Radio Mirchi (Curve B in Fig C below) with Rs 3.17 crore in Q1-2016 and Rs 3.63 crore in Q2-2016. Radio City (Curve C in Fig C below) also reported average revenue per station of Rs 2.37 crore in Q1-2016 (43.64 per cent more than the all India average ad revenue per station of Rs 1.65 crore) and Rs 2.78 crore in Q2-2016.

The other three – Dhamaal (Curve G in Fig C below), My FM (curve E in Fig C below) and Oye! FM (curve F in Fig C below) reported lower average revenue per station than the industry average ad revenue per station.

In Q1-2016, the combined revenues of the six players fell 15.86 per cent (fell Rs 37.51 crore) QoQ to Rs 199.01 crore from Rs 236.51 crore, a drop that was significantly higher than the 8.88 per cent QoQ fall in the average ad revenue per station based on TRAI numbers. Also, YoY, the combined revenue reported by these stations increased by 7.15 per cent from Rs 185.73 crore, much lower than the 11.90 per cent YoY growth in ad revenue per station as per TRAI numbers. These combined QoQ numbers have been significantly pulled down by the 18.38 per cent QoQ drop (Rs 22.87 crore drop) in Radio Mirchi’s revenues in Q1-2016. Combined YoY increase has not been as sharp as compared to the industry average, because all the players reported lower revenue growth rates in Q1-2016 as compared to Q1-2015 than the growth rate of the all India average ad revenue per station.

The lowest QoQ fall in percentage terms in Q1-2016 was by Fever, which saw revenues drop 5.03 per cent (drop of Rs 1.30 crore), while the highest drop was 36.85 per cent (drop of Rs 1.44 crore) in the case of Oye! FM.

The highest YoY percentage growth in Q1-2016 among the six players in this report in revenues was by Radio City at 10.19 per cent (Rs 4.38 crore), while Oye! FM reported a YoY decline of 26.74 per cent (Rs 0.9 crore) in revenues in Q1-2016.

For Q2-2016, the six networks reported 15.55 per cent QoQ growth in combined revenues to Rs 229.95 crore from Rs 199.01 crore. YoY, combined revenue of the six networks in percentage terms in Q2-2016 increased 10.27 per cent (increased by Rs 21.42 crore). Dhamaal saw the highest YoY revenue growth in Q2-2016 at 25.93 per cent (0.46 crore), while Mirchi saw the highest YoY growth in Q2-2016 in absolute rupees at Rs 12.13 crore (11.65 per cent). Oye! FM saw a YoY decline in revenues of 38 per cent (declined 1.60 crore) in Q2-2016.

Fig D below indicates the operating results of four of the six networks considered in this report and Profit after tax (PAT) for the other two. While Mirchi has reported the highest profit after tax, far surpassing the operating results or EBIDTA reported by the other five, it is Fever FM that is likely to be the most profitable one, considering that during the period under consideration, it had only four radio stations in its network.

January 5, 2016
Q2-2016: Godrej Consumer Products marketing spend up 20 percent

BENGALURU: Godrej Consumer Products Limited (GCPL) reported 20 percent year on year (YoY) growth in advertisement and publicity expenses (Ad) in Q2-2016 (quarter ended September 30, 2015, current quarter) at Rs 253.99 crore (11.3 percent of net Total Income from Operations or TIO) as compared to Rs 211.69 crore (10.3 percent of TIO). The current quarter’s Ad spend was 1.1 percent higher QoQ as compared to Rs 251.12 crore (12 percent of TIO). In Q4-2015, the company in its earnings release had said that its household insecticides brand ‘Good Knight’ crossed the Rs 1500 crore mark and amongst GPCL’s soap brands, Godrej No. 1 crossed the Rs 1,000 crore and Cinthol, the Rs 500 crore milestone.

Note: 100,00,000 = 100 lakhs = 10 million = 1 crore

Godrej group chairman Adi Godrej said, “We have grown ahead of the market and gained share in our core categories, aided by our continued focus on innovations, competitive marketing investments and strong on-ground execution. Our India business branded net sales grew by 10 percent, driven by a healthy volume growth of 9 percent. This competitive performance was delivered despite the softness in rural demand and a deficient monsoon.”

“We remain optimistic that as the economy improves, the FMCG sector should see a gradual uptick in demand. We are launching exciting new products and investing in several distribution initiatives. We will also continue to manage our costs prudently in the near term, while investing for the future,” added Godrej.

Trends

Please refer to Fig A below. GCPL’s Q2-2016 Ad spends mentioned above was the highest in absolute rupees during the 14 quarter period starting Q1-2013 until Q2-2016 in this report. Its highest Ad spend in terms of percentage of TIO was in Q1-2014 at 13.8 percent (Rs 239.06 crore). During the period under consideration in this report, its lowest Ad spends both in absolute rupees and in terms of percentage of TIO was in Q2-2014 at Rs 145.78 crore and 7.5 percent.

During the period under consideration in this report, Ad spends in terms of absolute rupees and percentage of TIO shows a linear increasing trend as indicated by the broken blue and maroon trend lines in Fig A below.

GCPL reported 9 percent YoY growth in TIO in Q2-2016 at Rs 2244.94 crore as compared to Rs 2060.12 crore and 7 percent QoQ growth as compared to Rs 2097.66 crore. During the fourteen quarter period under consideration in this report, TIO shows a linear increasing trend as indicated by the broken green trend line.

Profit after tax (PAT) in Q2-2016 at Rs 287.16 crore was 22.4 percent higher YoY as compared to Rs 234.53 crore (11.4 percent of TIO) and was 44.1 percent higher QoQ as compared to Rs 199.23 crore (9.5 percent of TIO). During the fourteen quarter period in this report, PAT shows a linear increasing trend both in terms of absolute rupees and percentage of TIO as in obvious from the broken red and black trend lines in Fig B below.

Category review by GPCL

Household Insecticides

GPCL says that its Household Insecticides maintained its strong performance despite the deficient monsoon, with a double-digit volume-led sales growth of 13 percent. The company says that Good knight has significantly improved the overall category penetration, especially in rural areas. This has been led by superior on-ground execution, effective communication and the success of innovative launches such Good knight Fast Card, Good knight Xpress and Neem Low Smoke Coil. GPCL claims to have consistently gained market share across formats and ended the quarter with our highest ever market share. GPCL launched an innovative ‘Subah Bolo Good knight’ campaign to create awareness on dengue, and to increase daytime usage and consumption. The company says that gross margins continue to benefit from lower crude oil prices and have improved significantly.

Soaps

The company says its Soaps business delivered a competitive performance with robust mid-single digit volume growth. This was partially offset by deflationary pressures, resulting in a value growth of 3 percent. GPCL says that it continues to remain competitive on sales promotion investments to gain market share. GPCL’s premium soaps brand, Cinthol, continued to lead overall value and volume growth, driven by distribution expansion and effective communication.

Hair Colours

The growth momentum in Hair Colours accelerated with a sales growth of 17 percent, aided by a double-digit volume growth. The company says that Godrej Expert Rich Cr?me sustained its strong growth, led by continued initiatives such as festival linked campaigns, large scale activations, salon engagement programmes, etc. The initial consumer response to the launch of Godrej Nupur Coconut Henna Cr?me has been encouraging.

Air Fresheners

Godrej aer, GPCL’s air freshener brand, continued its strong sales and distribution ramp up. This has been aided by the company’s innovative gel format technology and various consumer engagement initiatives. Godrej aer is now the number three player in the Air Care market, says GPCL.

Health and Wellness

GPCL’s says that its Health and Wellness portfolio of hand washes and hand sanitiser, under Godrej Protekt, continued to be well received in modern trade. Buoyed by its success in modern trade, GPCL says that it is introducing Godrej Protekt portfolio in general trade on a pan-India basis.

Premium Hair Care

GPCL has launched BBlunt range of premium hair care products in modern trade and premium general trade outlets.

November 22, 2015
Q2-2016: Ad exp down 30.5 percent; watches sales grow, jewellery pulls down Titan’s numbers

BENGALURU: Last quarter (Q1-2016) Titan Company Limited (Titan) spent the highest amount towards advertisement (Ad spend) both in terms of absolute rupees and percentage of Total Income from Operations (TIO) at Rs 128.84 crore and 4.8 percent of TIO. This quarter (quarter ended September 30, 2015, Q2-2016, current quarter), Titan reduced its Ad Exp by 15.4 percent YoY to Rs 89.52 crore (3.3 percent of TIO as compared to Rs 105.83 crore (2.9 percent of TIO) and reduced Ad exp QoQ by 30.5 percent from the figures mentioned above for Q1-2016.

Note: 100,00,000 = 100 lakh = 10 million = 1 crore

Segment Performance

Titan has 4 revenue segments – watches having the brands –Titan, Xylus, Nebula, Sonata, Fastrack and Zoop; Jewellery with Tanishq, Zoya, Gold Plus from Tata, Mia and Fq teen diamonds; Eyewear under the Titan EYE+ brand and ‘Other’ such as precision engineering among others.

Titan’s Jewellery business is its major revenue generating stream that contributes more than 70 percent to the company’s revenue. In the current quarter, jewellery business revenue reduced 32.9 percent (declined by Rs 1,000 crore) YoY to Rs 1,929 crore (72.7 percent net sales) from Rs 2,929 crore (82.2 percent of net sales). The company’s Watches division is the next major division in terms of revenue contribution. Revenues from watches grew 4.4 percent (increased by Rs 23 crore) YoY to Rs 546 crore (20.6 percent net sales) from Rs 523 crore (14.7 percent net sales). Titan explains the reason for the decline in a release that says that retail sentiment has been extremely poor in this quarter and that the watches division, backed by activations for both Titan and Fastrack brands grew in income by 4.4 percent. A new sub-brand ‘SF’ by Sonata in the adventure sports segment was launched during the current quarter.

Titan’s Eyewear business which contributes just 2 to 3 percent to the company’s revenue, reported 14.3 percent (increased by Rs 11 crore) YoY growth in revenue to Rs 88 crore (3.3 percent of TIO) from Rs 77 crore (2.2 percent of TIO). On a YTD basis, (6 months of the current fiscal), Titan says that the decline in profits from this segment is due to higher Sales promotion and Advertising costs in the first quarter.

As a consequence of the huge decline in revenue from Jewellery sales, Titan’s TIO in the current quarter fell 25.6 percent (reduced by Rs 919.59 crore) YoY to Rs 2,673.48 crore from Rs 3,593.07 crore. Net Sales fell 25.5 percent (reduced by Rs 910 crore) YoY to Rs 2655 crore from Rs 3565 crore. Qoq, the TIO decline was much lower at 1.3 percent from Rs 2708.59 crore. QoQ, net sales in the current quarter reduced by 1.2 percent (reduced by Rs 32 crore) as compared to Rs 2,687 crore.

Advertisement spend trends

Please refer to fig A below for Titan’s Ad expenses over a fifteen month period starting Q4-2012 (quarter ended March 31, 2012) until the current quarter.

As mentioned above, during the fifteen quarter period under consideration in this report, Titan’s Ad spends were the highest in the previous quarter (Q1-2016), both in absolute rupees and in terms of percentage of TIO. Lowest Ad spends during the same period in absolute rupees and in terms of percentage of TIO were in Q4-2103 at Rs 66.63 crore and 2.5 percent of TIO respectively.

During the fifteen quarter period under consideration in this report, Titan’s ad spends show a linear increasing trend in terms of absolute rupees as indicated by the broken blue trend line, while ad spends in terms of percentage of TIO show a slow linear decline as indicated by the broken maroon line in Fig A.

Please refer to Figure B below. As mentioned above, the company’s TIO in Q2-2016 fell 25.2 percent YoY and reduced 1.3 percent QoQ. During the fifteen quarter period under consideration in this report, TIO shows a linear increasing trend as indicated by the broken orange trend line in the figure below.

PAT in Q2-2016 at Rs 145.39 crore (5.8 percent margin) reduced 39.4 percent YoY from Rs 239.98 crore (7.3 percent margin) and reduced 3.8 percent QoQ from Rs 151.06 crore (6 percent margin). PAT in absolute rupees and in terms of percentage of TIO (margin) show a linear increasing trend as indicated by the broken military green and broken grey trend lines in the figure below during the fifteen month period under consideration in this report.

Company Speak

Titan Managing Director Bhaskar Bhat said, “This was an extremely challenging quarter for the company and we witnessed an income decline of 25 percent. While our watches business witnessed a growth of low single digit at 4.4 percent the jewellery business had a difficult quarter with a decline over last year. The industry saw a tough period with gold imports declining significantly. The decline in jewellery sales was also on account of discontinuation of our Golden Harvest Scheme. The Eyewear business continues to register double digit growth. All our brands are working on new product and marketing campaigns for the festive season ahead.”

November 14, 2015
Q2-2016: Britannia Industries ad and sales promo spends up 11.9 percent

BENGALURU: Britannia Industries Limited (Britannia) spent 11.9 percent more YoY towards Advertisement and Sales Promotion (ASP) in Q2-2016 (quarter ended September 30, 2015, current quarter) at Rs 184.68 crore (8.4 percent of TIO) as compared to Rs 143.48 crore (7.3 percent of TIO) and 15.1 percent more QoQ than Rs 160.52 crore (8 per cent of Net total Income from Operations or TIO). Please refer to Fig 1 below.

Note: 100,00,000 = 100 Lakhs = 10 million = 1 crore

Company speak

Britannia managing director Varun Berry said,“We have been able to make reasonable in-roads in our weak states in the Northern region and have strengthened our position which has helped us bolster the growth. While the prices of key commodities remained benign, we expect that our initiatives of offering more value to consumers along with re-stage of our key brands like Goodday and Milkbikkis with enhanced organoleptic delivery, would help drive consumer off-take and accelerate the growth for the company.”

TIO and Ad & Sales Promotion spends

In Q2-2015, Britannia’s TIO increased 11.9 percent YoY to Rs 2208.65 crore as compared to Rs 1974.51 crore and was 9.4 percent more QoQ as compared to Rs 2018.60 crore. TIO in the current quarter was the highest during the 14 quarter period starting Q1-2013 until the current quarter. The broken grey trend line indicates that the company’s TIO has a linear increasing trend during the period under consideration.

Also, during the period under consideration in this report, Britannia’s ASP in Q4-2015 was the highest, both in terms of absolute rupees as well as in terms of percentage of TIO at Rs 202.89 crore and 9.8 percent of TIO. The lowest ASP in absolute rupees was in Q1-2013 at Rs 112.96 crore (8.3 percent of TIO), while in terms of percentage of TIO, it was 7.3 percent (Rs 143.48 crore) in Q2-2015. The maroon broken line shows a slight decline in ASP in terms of percentage of TIO, while the blue broken trend line indicates a linear increasing trend for ASP in absolute rupees.

The broken blue trend line in Fig 1 below indicates that ASP in terms of absolute rupees is increasing, while the broken maroon trend line indicates that it is declining in terms of percentage of TIO)

Please refer to Fig 2 below. In Q2-2016, Britannia reported PAT of Rs 218.63 crore (9.9 percent margin) which was 19.2 percent lower YoY as compared to Rs 270.46 crore (13.7 percent margin), but was 15.3 percent higher QoQ as compared to Rs 189.66 crore (9.4 percent margin).

During the period under consideration in this report, the company’s PAT shows a linear increasing trend both in absolute rupees as was well as in terms of percentage of TIO.

During the fourteen quarter period under consideration, the company’s ,PAT in Q2-2015 was the highest recorded by the company, both in terms of absolute rupees as well as in terms of PAT as percentage of TIO at Rs 270.46 crore and 13.7 percent of TIO respectively.The lowest PAT reported by the company in absolute rupees as well as in terms of percentage of TIO was in Q1-2013 at Rs 46.48 crore and 3.4 percent of TIO respectively during the same period.

November 14, 2015
FY-2015: Lower Filmed Entertainment numbers drag Viacom revenue down 3.7 percent

BENGALURU: Viacom Inc (Viacom) reported 3.7 percent drop (reduced by $515 million) in revenue for the year ended September 30, 2015 (FY-2015, current year) at $13,268 million as compared to $13,783 million in FY-2014. Viacom says that the fall in revenue was due to due to lower revenues across the distribution windows. Of the two segments that the company has, Filmed Entertainment reported 22.6 percent (reduced by $842 million) lower revenue in FY-2015 at $2,883 million as compared to $3,725 million in the previous year.

Viacom says that excluding an unfavourable 2 percent impact of foreign exchange, revenues declined 2 percent, while excluding an unfavourable 2 percent and 4 percent impact of foreign exchange, Filmed Entertainment revenues declined 19 percent.

The company’s operating income fell 22.8 percent (reduced by $970 million) to $3,112 million from $4,082 reported for last year. Adjusted operating income decreased 5 percent ($205 million) to $3,920 million in FY-2015. Adjusted results exclude the impact of restructuring and programming charges totalling $784 million and a non-cash pension settlement loss of $24 million in 2015 and a non-cash impairment charge of $43 million in 2014. Including the impact of these items, operating income decreased $970 million, as mentioned above.

Filmed Entertainment segment’s adjusted operating income reduced 45.9 percent (reduced by $94 million) in the current year to $111 million as compared to $205 million in the company’s previous fiscal. The lower adjusted operating income for this segment reflects lower contribution from films in release across the distribution windows says Viacom. Last quarter (Q3-2015), also lower results from the Filmed Entertainment segment had pulled down the company’s revenues by 11 percent.

The company’s other segment, Media Networks reported 3.1 percent (increased by $319 million) increase in revenue in FY-2015 to $10,490 million from $10,171 million, driven primarily by higher affiliate fees and advertising revenues. Media Networks adjusted operating income reduced by 3 percent (reduced by $128 million) in the current year to $4,143 million from $4,271 million in FY-2014. Viacom says that higher revenues from the segment were more than offset by an increase in programming and marketing expenses.

Viacom Executive Chairman Sumner M Redstone said, “Viacom continues to create some of the most compelling and entertaining content in the world. I am confident that Viacom’s leadership team will continue to lead through our industry’s period of transition and succeed well into the future.”

Viacom President and Chief Executive Officer Philippe Dauman said, “Viacom’s fourth quarter and year-end results are indicative of our progress in key areas, including recent ratings improvement and renewals of important distribution agreements. Our strategy of increasing and accelerating investment in original content and expanding our profitable international footprint are among the major factors driving this success, which we believe will continue in 2016 and beyond. We are making great progress in tackling industry-wide inefficiencies in audience measurement, while expanding our audience reach with landmark distribution agreements.

“Viacom’s family of Media Networks are the most watched by highly coveted younger audiences, and we are building engagement on all platforms, leading to first-of-their-kind marketing opportunities with our advertising partners. Our investment in content continues to grow, supporting an unprecedented amount of quality original programming and a more robust slate of films. In addition, in fiscal 2015 we launched 21 channels overseas – including six in India – fuelling the fastest international growth in our history.”

Segment Performance

As mentioned above, two segments contribute to Viacom’s numbers-Media Networks, which has three components – Advertising, Affiliate Fees and Ancillary; and Filmed Entertainment which has four components-Theatrical, Home Entertainment, License Fees and Ancillary.

Media Networks

Excluding an unfavourable 2 percent impact of foreign exchange, worldwide revenues increased 5 percent. Domestic revenues were $8,635 million, an increase of $10 million. International revenues were $1,855 million, an increase of $309 million, or 20 percent, primarily due to the acquisition of Channel 5 Broadcasting Limited (Channel 5), partially offset by foreign exchange, which had a 10 percentage point unfavourable impact on international revenues says Viacom.

Advertising

Worldwide advertising revenues increased $54 million, or 1.1 percent, to $5,007 million in FY-2015 . Domestic advertising revenues decreased 7 percent. The company says that while pricing remained essentially flat, softer ratings caused lower audience delivery, reducing impressions and associated revenue. International advertising revenues increased 60 percent, reflecting growth in Europe driven by the acquisition of Channel 5, partially offset by the impact of foreign exchange, which had a 10 percentage point unfavourable impact on international advertising revenues.

Affiliate Fees

Worldwide affiliate fees increased $248 million, or 5.3 percent, to $4,908 million in FY-2015. Domestic affiliate revenues increased 8 percent, driven by rate increases as well as the benefit of distribution arrangements which are affected by the timing of available programming. Excluding the impact from the timing of product available under these distribution agreements, domestic affiliate revenues grew in the mid-single digits. International revenues decreased 7 percent, principally due to foreign exchange, which had an 11 percentage point unfavourable impact, partially offset by an increase in revenues driven by the launch of new channels and new distribution agreements.

Filmed Entertainment

Excluding an unfavourable 4 percent impact of foreign exchange, worldwide revenues declined 19 percent, due to lower revenues across the distribution windows reflecting the mix of films. Domestic revenues were $1,374 million, a decrease of $347 million, or 20 percent. International revenues were $1,509 million, a decrease of $495 million, or 25 percent, with foreign exchange having an 8- percentage point unfavourable impact on international revenues.

Theatrical revenues :in the current year reduced 30.4 percent (reduced by $368 million) to $841 million from $1209 million due to the mix of releases, partially offset by higher carryover revenues of $54 million from prior year releases, principally from Teenage Mutant Ninja Turtles. Domestic theatrical revenues decreased 26 percent and international revenues decreased 34 percent. Foreign exchange had a 10 percentage point unfavourable impact on international theatrical revenue

Home Entertainment: Worldwide home entertainment revenues decreased $293 million, or 25.2 percent, to $871 million FY-2015, reflecting a decline in revenues from third-party distribution titles, carryover revenues from prior year releases and Viacom’s current year releases due to the mix of titles. Significant titles in the current year included Teenage Mutant Ninja Turtles,Interstellar and The SpongeBob Movie: Sponge Out of Water, while the prior year includedTransformers : Age of Extinction, The Wolf of Wall Street, Noah and Jackass : Bad Grandpa. Domestic and international home entertainment revenues decreased 16 percent and 35 percent respectively. Foreign exchange had a 7-percentage point unfavourable impact on international home entertainment revenues.

License Fees :decreased $135 million, or 12.1 percent, to $980 million FY-2015, primarily driven by the mix of available titles.

Ancillary:Ancillary revenues decreased $46 million, or 19.4 percent, to $191 million in FY-2015, primarily driven by a benefit from the sale of certain distribution rights in the prior year.

November 14, 2015
Q2-2016: TV Today revenue up 24.4 percent; PAT up 84.1 percent

BENGALURU: TV Today Network Limited (TVTN) reported 24.4 per cent YoY increase in standalone Total Income from Operations (TIO) in the quarter ended 30 September, 2015 (Q2-2016, current quarter) to Rs 127.04 crore as compared to Rs 102.13 crore and was flat (reduced by 0.1 percent) QoQ as compared to Rs 127.11 crore.

Note: 100,00,000 = 100 lakh = 10 million = 1 crore

All numbers in this report are standalone unless stated otherwise.

Profit after tax (PAT) for Q2-2016 increased 84.1 percent YoY to Rs 24.32 crore (19.1 percent margin) as compared to Rs 13.21 crore (12.9 percent margin) and was 35.4 per cent higher QoQ as compared to Rs 17.96 crore (14.1 per cent margin).

The company says that it has sold four of its radio stations at Amritsar, Patalia, Jodhpur and Shimla on September 18, 2015 to Entertainment Network (India) Limited (ENIL) as an ongoing concern for a lump sum consideration of Rs 4.00 crore adjusted for net working capital as a sale agreement. Such transaction resulted in a profit of Rs 2.07 crore included in ‘Other Income’.

EBIDTA calculated for Q2-2016 at Rs 35.71 crore (28.1 percent margin) increased 51.7 percent YoY as compared to Rs 23.54 crore (23 percent margin) and was 19.8 percent higher QoQ than Rs 29.82 crore (23.5 percent margin).

Segment revenue

TVTN’s Television Broadcasting segment (TV segment) reported a 27.1 percent YoY increase in operating revenue in Q2-2016 at Rs 124.43 crore as compared to Rs 97.91 crore and almost flat (reduced 0.2 percent) operating revenue as compared to Rs 124.65 crore in Q1-2016. Operating profit from the segment in the current quarter increased 73.3 percent YoY to Rs 36.68 crore as compared to Rs 21.16 crore and increased 31.2 percent QoQ from Rs 27.98 crore.

The company’s radio segment reported 38 percent YoY decline in operating revenue at Rs 2.61 crore as compared to Rs 4.21 crore, but 5.9 percent higher operating revenue as compared to Rs 2.47 crore in the immediate trailing quarter. The segment’s operating loss in the current quarter was higher at Rs 5.47 crore as compared to the operating loss of Rs 1.80 crore in Q2-2015 and the operating loss of Rs 2.61 crore in Q1-2016.

Rebranding of Headlines Today to India Today

Last quarter (Q1-2016), TVTN rebranded its English news channel from ‘Headlines Today’ to ‘India Today’ from May 23, 2015 in order to benefit from the brand name of India Today. TVTN says that it has incurred a marketing expense of Rs 14.38 crore towards re-branding in that quarter. Consequently, the company’s advertisement, distribution and sales promotion expense (ad expense) in Q1-2016 was Rs 38.24 crore (30.1 percent of TIO). This quarter, TVTN’s ad expense was 6.9 percent lower YoY at Rs 23.53 crore (18.5 percent of TIO) as compared to Rs 25.27 crore (24.8 percent of IO) and 38.5 percent lower QoQ as compared to the above mentioned Rs 38.24 crore (30.1 percent of TIO) in Q1-2016.

Let us look at the other numbers reported by TV Today

Total Expenditure in Q2-2016 at Rs 99.03 crore (78 percent of TIO) was 14.9 percent higher YoY than Rs 86.20 crore (84.4 percent of TIO), but 5.9 percent less QoQ than the Rs 105.29 crore (82.8 percent of TIO) in the previous quarter.

Production cost in Q2-2016 increased 17.3 percent YoY to Rs 13.72 crore (10.8 percent of TIO) as compared to Rs 11.70 crore (11.5 percent of TIO) and increased 13.3 percent QoQ as compared to Rs 12.11 crore (9.5 percent of TIO).

Employee Benefit Expense in the current quarter at Rs 33.38 crore (26.3 percent of TIO) was 16 percent higher YoY as compared to Rs 28.78 crore (28.2 percent of TIO) and was 1.7 percent higher QoQ as compared to Rs 32.81 crore (25.8 percent of TIO).

Other expenses in Q2-2016 at Rs 20.71 crore (16.3 percent of TIO) was 38.9 percent higher YoY as compared to Rs 14.91 crore (14.6 percent of TIO) and was 46.5 percent higher YoY than Rs 14.13 crore (11.1 percent of TIO).

November 13, 2015
Q2-2016: Trilogic EBIDTA up 17.5% YoY

BENGALURU: Indian broadcast management and audio visual content syndication company Trilogic Digital Media Limited’s (Trilogic) EBIDTA for the quarter ended 30 September, 2015 (Q2-2016, current quarter) increased 17.5 per cent YoY to Rs 1.57 crore (14.4 per cent margin) from Rs 1.33 crore (7.9 per cent margin). Quarter-on-quarter, the company’s EBIDTA in Q2-2016 declined to almost a third (reduced by 64.2 per cent) from Rs 4.37 crore (14.4 per cent margin).

Note: (1) 100,00,000 = 100 lakh = 10 million = 1 crore

(2) All numbers are standalone unless stated otherwise.

Trilogic’s Total Income from Operations (TIO) reduced 35.7 per cent YoY to Rs 10.86 crore from Rs 16.88 crore and reduced 38.4 per cent QoQ from Rs 17.64 crore.

The company’s PAT in Q2-2016 reduced 3.7 per cent to Rs 0.81 crore (7.5 per cent margin) from Rs 0.84 crore (five per cent margin) in the corresponding year ago quarter and reduced to less than a third (fell by 71 per cent) from Rs 2.79 crore (7.5 per cent margin) in the immediate trailing quarter.

Total Expenditure in the current quarter reduced 38.2 per cent YoY to Rs 9.36 crore (88.7 per cent of TIO) from Rs 15.57 crore (92.3 per cent of TIO) and reduced 29.2 per cent QoQ from Rs 13.60 crore (77.1 per cent of TIO).

Employee Benefits Expense in Q2-2016 increased 17.4 per cent to Rs 0.20 crore (1.8 per cent of TIO) from Rs 0.17 crore (one per cent of TIO) in Q2-2015, but reduced 22.2 per cent from Rs 0.26 crore (1.8 per cent of TIO) in Q1-2016.

November 13, 2015
Q2-2016: UFO Moviez revenue up 18%, EBIDTA up 12.3%

BENGALURU: Indian digital cinema distribution network and in-cinema advertising platform, UFO Moviez Limited (UFO) reported a 18 per cent YoY growth in consolidated income from operations (TIO) for the quarter ended 30 September, 2015 (Q2-2016, current quarter) at Rs 148.25 crore as compared to Rs 125.59 crore and 13.8 per cent more than the Rs 130.32 crore in the immediate trailing quarter. The company reported 12.3 per cent higher operating profit or EBIDTA for the current quarter at Rs 44.66 crore (30.1 per cent margin) as compared to the Rs 39.78 crore (31 per cent margin) and grew 10.7 per cent QoQ from Rs 40.34 crore (31 per cent margin).

Note: 100,00,000 = 100 lakh = 10 million = 1 crore.

The company’s PAT in Q2-2016 increased 26.5 per cent to Rs 16.46 crore (11.1 per cent margin) as compared to Rs 13.01 crore (10.4 per cent margin) and increased 24.2 per cent QoQ from Rs 13.25 crore (10.4 per cent margin).

UFO founder and managing director Sanjay Gaikwad said, “I am very pleased with UFO’s operating and financial performance during the first half of fiscal year 2016. We delivered strong growth in revenues driven by E Cinema VPF, sale of products and increase in advertisement volumes. Advertisement revenue growth was aided by increased stability due to repeat business from some of the top corporate clients. The benefits of operating leverage are also evident, combined with higher margins in advertising and strong balance sheet position, which has enhanced the overall profitability of the company.”

“We are confident in our ability to deliver the targets we have set for the full year,” added UFO joint managing director Kapil Agarwal. “A healthy pipeline of movies in the second half offers strong visibility for growth. The prospect of growth in the advertising business looks promising. The expansion of Caravan Talkies is also progressing as per plan and we expect this business to begin contributing meaningfully at an operating level soon. In summary, we have a very well-established platform to leverage on and a strong set of plans to deliver growth.”

Let us look at the other expense reported by the company:

Total Expenses in Q2-2016 at Rs 123.22 crore (83.1 per cent of TIO) increased 17.3 per cent YoY from Rs 105.09 crore (83.7 per cent of TIO) and was 13.8 per cent more QoQ than the Rs 109.16 crore (83.8 per cent of TIO).

The company’s expense towards purchase of digital cinema equipment and lamps in the current year increased 49.1 per cent to Rs 24.55 crore (16.6 per cent of TIO) as compared to the Rs 16.46 crore (13.1 per cent of TIO) in Q2-2015 and was 53.8 per cent higher QoQ as compared to Rs 15.96 crore (12.2 per cent of TIO).

The company paid 7.9 higher amount towards advertisement revenue share in Q2-2016 at Rs 11.29 crore (7.6 per cent of TIO) as compared to the Rs 10.46 crore (8.3 per cent of TIO) in Q2-2015 and 7.6 per cent more QoQ from Rs 11.47 crore (8.8 per cent of TIO).

Further, the company paid 32.1 per cent YoY more towards VPF share at Rs 19.99 crore (13.5 per cent of TIO) from Rs 15.06 crore (12 per cent of TIO) and 13.5 per cent more QoQ from Rs 16.23 crore (12.5 per cent of TIO).

Half year results

In H1-2016 (half- year ended 30 September, 2015), total consolidated revenues rose 20.2 per cent to Rs 280.20 crore from Rs 233.1 crore in H1-2015. EBITDA grew 12.4 per cent to Rs 86.8 in the current half year from Rs 77.3 crore. PBT increased 33.5 per cent to Rs 42.1 crore in H1-2016 from Rs 31.6 crore in the corresponding period of last year.

PAT in H1-2016 grew 41.4 per cent to 29.7 crore from Rs 21 crore in H1-2015. The average number of advertisement minutes sold per show per screen increased to 3.83 in H1-2016 (half- year ended 30 September, 2015) as compared to the 2.92 minutes in HY-2015 and Advertisement revenue grew 37.8 per cent to Rs 70.7 crore in the current half-year as compared to Rs 51.3 crore in H1-2015.

November 13, 2015
Q2-2016: Mukta Arts EBIDTA up 32%

BENGALURU: Mukta Arts Limited EBIDTA increased 31.9 per cent YoY in the quarter ended 30 September, 2015 (Q2-2016, current quarter) to Rs 2.16 crore (13.8 per cent margin) as compared to Rs 1.64 crore (6.8 per cent margin), but declined 2.2 per cent QoQ from Rs 2.21 crore (14.5 per cent margin). The company’s net Total Income from Operations (TIO) in the current quarter fell 34.8 per cent YoY to Rs 15.61 crore from Rs 23.95 crore, but increased 2.5 per cent QoQ from Rs 15.23 crore.

Note: 100,00,000 = 100 lakh = 10 million = 1 crore

Mukta Arts reported a small Profit after Tax (PAT) for the current quarter at Rs 0.32 crore (2.1 per cent margin) as compared to a loss of Rs 0.03 crore in Q2-2015 and a loss of Rs 1.43 crore in the immediate trailing quarter.

Segment performance

Mukta Arts has four segments-Software Division; Equipment Division (including other income); Theatrical Exhibition Division and ‘Others.’

Software Division reported revenue of just Rs 1.64 crore in Q2-2016 as compared to Rs 13.89 crore in Q2-2015 and Rs 0.03 crore in Q1-2016. The segment reported less than one fourth of operating profit YoY at Rs 0.08 crore as compared to Rs 0.33 crore. This division had reported an operating loss of Rs 1.94 crore for the immediate trailing quarter.

Equipment Division reported revenue of Rs 0.09 crore in the current quarter as compared to Rs 0.1 crore each in Q2-2015 and Q1-2015. The segment reported operating profit of Rs 0.05 crore in Q2-2016 as compared to a loss of Rs 0.12 crore in Q2-2015 and a loss of Rs 0.04 crore in the immediate trailing quarter.

Theatrical Exhibition Division reported revenue of Rs 12.02 crore in the current quarter as compared to Rs 0.07 crore in Q2-2015 and Rs 11.14 crore in Q1-2016. The segment reported operating profit of Rs 1.36 crore in Q2-2016; operating profit of Rs 0.07 crore in Q2-2015 and operating profit of Rs 0.49 crore in Q1-2016.

‘Others’ segment reported revenue of Rs 1.87 crore in Q2-2016; revenue of Rs 1.96 crore in Q2-2015 and revenue of Rs 1.97 crore in Q1-2016. The segment reported operating profit of Rs 0.53 crore in Q2-2016; operating profit of Rs 1.68 crore in Q2-2015 and operating profit of Rs 1.40 crore in Q1-2016.

Let us look at the other numbers reported by Mukta Arts

Mukta Arts’ Total Expenditure in Q2-2016 reduced 37.3 per cent YoY to Rs 14.89 crore (95.4 per cent of TIO) from Rs 23.74 crore (99.1 per cent of TIO), but increased 3.4 per cent QoQ from Rs 14.41 crore (94.6 per cent of TIO).

Distributors and producers share in the current quarter reduced 31.1 per cent YoY to Rs 3.96 crore (25.3 per cent of TIO) from Rs 5.74 crore (24 per cent of TIO), but increased 11.9 per cent QoQ from Rs 3.53 crore (23.2 per cent of TIO).

Employee Benefits Expense in Q2-2016 increased 38 per cent YoY to Rs 2.12 crore (13.6 per cent of TIO) from Rs 1.54 crore (6.4 per cent of TIO), but reduced 2.6 per cent QoQ from Rs 2.18 crore (14.3 per cent of TIO).

Purchase of Food and Beverages cost increased 18.9 per cent YoY to Rs 0.85 crore (5.4 per cent of TIO) from Rs 0.71 crore (3 per cent of TIO) and increased 7.7 per cent QoQ from Rs 0.79 crore (5.2 per cent of TIO).

Finance costs in Q2-2016 reduced 12.9 per cent YoY to Rs 1.83 crore (11.8 per cent of TIO) from Rs 2.11 crore (8.8 per cent of TIO), but increased 5.4 per cent QoQ from Rs 1.74 crore (11.4 per cent of TIO).

November 13, 2015