BENGALURU: Shemaroo Entertainment has its maiden annual numbersafter listing in September 2014. The company has reported 50.7 per cent growth in profit after tax (PAT) at Rs 40.92 crore (12.7 per cent of Total Income from Operations or TIO) as compared to the Rs 27.16 crore (10.3 per cent of TIO) in FY-2014.
BENGALURU: Rupert Murdoch’s Twenty-First Century Fox Inc. reported a 16.8 per cent drop in total revenue to $6840 million in the quarter ended 31 March, 2015 (Q3-2015, current quarter) as comparted to the $8219 million reported for the year ago quarter (quarter ended 31 March, 2014). Excluding net revenues for Q3-2014 from the Direct Broadcast Satellite Television (DBS) businesses, Sky Italia and Sky Deutschland AG, which were sold in November 2014 to Sky plc, adjusted revenues in Q3-2015 increased $84 million or one per cent over the $6.76 billion of adjusted revenue in Q3-2014.
The company’s operating income before depreciation and amortisation fell by $110 million (6.2 per cent) to $1677 million in Q3-2015 from $1787 million in Q3-2014. The company’s Television segment reported a fall of OIBDA to $141 million, which was less than half (49 per cent) of the $288 million reported for Q3-2014. The company attributes the decline in OIBDA to the absence of revenues generated from the broadcast of Super Bowl XLVIII in the prior year and higher entertainment programming costs at the Fox Broadcasting Network from a higher volume of original series, including Glee and Empire, in the current year quarter as compared to more series repeats in Q3-2014.
While its biggest segment in terms of revenues – Cable Network Programming reported an OIBDA improvement of $57 million (4.8 per cent increase) to $1233 million in Q3-2015. OIBDA increment by the segment would have been even higher, but for the impact of 19 per cent increase in segment expenses lead by the planned investments in new channels, primarily Star Sports and FXX, says the company.
Increased Cable Network Programming segment expenses included increased rights fees related to the broadcast of the ICC Cricket World Cup at Star Sports and increased programming costs at FXX led by The Simpsons. International advertising revenue for the segment increased 24 per cent due to strong local currency growth at Star, driven by the broadcast of the ICC Cricket World Cup, and local currency growth at the FIC channels partially offset by the negative five per cent impact from foreign exchange rate fluctuations.
For the nine month period ended 31 March, 2015 (9M-2015), Fox reported revenue of $22782 million as compared to the $23443 million in 9M-2014. Eliminating the revenue by its DBS business (without accounting for the impact of DBS on corporate eliminations) in the current nine month and 9M-2014 periods, 9M-2015 revenue was $ 20620 million and 9M-2014 revenue was $19006 million, reflecting an 8.5 per cent growth.
Fox OIBDA for 9M-2015 was $5178 million as compared to the $4949 million in 9M-2014. Neglecting DBS OIBDA (without accounting for the impact of DBS on corporate eliminations), the company’s adjusted OIBDA for 9M-2015 was $4944 million, which was 5.8 per cent more than the $4671 million reported for 9M-2014.
Segment Results
Cable Network Programming
This segment reported 12.5 per cent increase in revenue to $3590 million in the current quarter from $3152 million in Q3-2014. Over the nine month period (9M-2015), the segment reported 14.2 per cent increase in revenue to $10205 million from $8296 million in Q3-2015.
The segment’s OIBDA for Q3-2015 has been mentioned above. For 9M-2015, segment OIBDA improved seven per cent to $3430 million from $3205 million in 9M-2014.
Domestic (US) affiliate revenue grew 20 per cent in Q3-2015, reflecting the combination of sustained growth at the regional sports networks, Fox News Channel and FX Networks, increased contribution from Fox Sports 1, and the consolidation of the Yankees Entertainment and Sports Network (the Yes Network). International affiliate revenue increased 2 per cent driven by strong local currency growth at the Fox International Channels and Star channels which was partially offset by a 13 per cent adverse impact from the strengthened US dollar.
Domestic advertising revenue was flat y-o-y due to lower ratings at FX Networks and National Geographic Channel.
Television
This segment reported a drop of 22 per cent in revenue in Q3-2015 to $1237 million from $1587 million in the corresponding year ago quarter. For 9M-2015, Television segment reported a revenue drop of 8.4 per cent to $3430 million in Q3-2015 from $4265 million in 9M-2014.
Television segment OIBDA in 9M-2015 fell 17.9 per cent ($132 million) to $605 million from $737 million in 9M-2014.
Filmed Entertainment
This segment reported 4.8 per cent improvement in revenue to $2389 million in Q3-2015 as compared to the $2279 million in Q3-2014. For 9M-2015, Filmed Entertainment segment revenue rose 10.8 per cent to $7618 million from $6876 million in 9M-2014.
Segment OIBDA for Q3-2015 improved 7.9 per cent to $382 million from $354 million in Q3-2014.Filmed Entertainment OIBDA improved 15.4 per cent in 9M-2015 to $1176 million from $1019 million in 9M-2014.
The company says that the growth was driven by the successful theatrical releases Taken 3and Kingsman: The Secret Service in the current quarter, which have grossed over $320 million and $400 million in worldwide box office to date, respectively, and theatrical and home entertainment contributions from Penguins of Madagascar. This growth was partially offset by lower contributions from the television production business due to lower SVOD revenues resulting from the prior year sale of several series to Amazon, including 24 and The Americans, and from the adverse impact from the strengthened US dollar.
BENGALURU:Last September, Indiantelevision.com had estimated that the marketing spends by one of the biggest spenders on advertisement and sales promotion (ASP) in India, nutrition, health and wellness company Nestle India Limited would be about Rs 450 with a variation of +10 per cent.
Background: Being a part of a multi-national group, the company is generally quite tight lipped about sharing financials unless it has to legally do so. Details about the company’s advertisement spends are not indicated even in the company’s annual reports – what you have is a combination of the Advertisement and Sales Promotion spends declared as a single entry in the notes forming the part of the company’s annual financials. There is really no way that one could pin an exact number for these spends unless one has an inside track on the company’s marketing budgets. The projections and numbers in this report are pure conjecture based statistical tools used on the historical annual numbers revealed by the company in its annual reports. The author has no knowledge about Nestle’s strategy, past or present.
Note: 100,00,000 = 100 lakh = 10 million = 1 crore
In its FY-2014 annual report for the year ended 31 December, 2015, Nestle has indicated ASP spends at Rs 445.47 crore (4.52 per cent of Total Income from Operations or TIO), or just 1.01 per cent off the Rs 450 crore mark mentioned by us. Please refer to figure 1 below that has been updated until FY-2014.
CAGR for Nestle’s ASP in absolute rupees in the eleven year period from FY-2004 to FY-2014 has increased slightly to 12.56 per cent as compared to the 12.55 per cent for the ten year period between FY-2004 and FY-2013.
Indiantelevision.com had also estimated that Nestle would report TIO in the range between Rs 9534.09 crore and Rs 10640 crore for FY-2014. The company has reported TIO of Rs 9854.84 crore, well withinthe range indicated by us, while just missing the Rs 100 billion mark by a small fraction. The company’s TIO CAGR has gone down over the eleven year period starting FY-2004 until FY-2014 to 14.48per centas compared to the CAGR of 16.93 per cent for the ten year period between FY-2004 and FY-2013. Please refer to figure 2 below for actual y-o-y growth in TIO.
In the company’s earnings release for FY-2014, Nestle managing director Etienne Bennet said, “2014 was a challenging year and I am satisfied that in a difficult environment, we have delivered both top and bottomline and our results are broadly in line with the Food and Beverages segment of the FMCG sector. We increased investments behind our brands and maintained healthy profitability despite strong headwinds in milk solids costs that were higher than international markets and were not passed onto the consumer fully. We remain focused on value portfolio management and are continuing to reshape the portfolio and communication to strengthen our leadership as Nutrition, Health and Wellness company.”
Nestle’sProfit after Tax (PAT) has shown a lower CAGR during the eleven year period from FY-2004 to FY-2014 of 14.5 per cent as compared to a CAGR of 15.54 per cent over the ten year period FY-2004 to FY-2013. Please refer to figure 3 below for PAT performance. PAT for FY-2014 was Rs 1184.69 crore (12 per cent of TIO), sixper cent more than the RS 1117.13 crore (12.3 per cent of TIO) for FY-2013.
Overall, the company’s PAT, both in terms of absolute rupees and as per centage of TIO shows an upward linear trend for the eleven year period between FY-2004 and FY-2014.
MUMBAI: News Corp’s quarterly profit was down 52 per cent due to foreign-exchange fluctuations and lower advertising sales offset revenue gains in book publishing and the digital real-estate business.
The company’s net income for the three months ended 31 March, 2015 fell to $23 million, or four cents a share, from $48 million, or eight cents, in the same period a year earlier.
For the fiscal 2015 third quarter, total revenues slipped one per cent to $2.06 billion as compared to $2.08 billion in the prior year. The majority of the revenue decline reflects negative foreign currency fluctuations and lower advertising revenues at the News and Information Services segment, offset in large part by growth in the Book Publishing and Digital Real Estate Services segments as a result of the acquisition of Harlequin Enterprises Limited and Move, Inc., respectively.
News Corp CEO Robert Thomson said, “The new News Corp continues to build a firm foundation for digital growth. We see that most clearly in the successful integration of realtor.com®, which grew audience and revenue at record levels in the third quarter. News Corp is now a global leader in digital real estate, which we believe will underpin long-term expansion and complement our expertise in news and financial analysis, both of which have been important ingredients in realtor.com’s accelerated growth. While the quarter faced some revenue challenges, particularly at News and Information Services, including currency headwinds, our adjusted EBITDA was relatively stable, underscoring the strength of our assets and the diversification of our revenue base. We believe the company is firmly on track and the signs are positive for year-over-year EBITDA growth in the fourth quarter.”
As compared to $175 million in the prior year, News Corp’s earnings before interest, taxes, depreciation and amortization (EBITDA) fell seven per cent to $163 million on legal costs, currency fluctuations and increased stock-based compensation expenses from the acquisition of Move Inc.
These results include $15 million and $20 million in fees and costs – net of indemnification – related to the U.K. Newspaper Matters in the three months ended 31 March, 2015 and 2014, respectively. Declines at the News and Information Services segment, including higher legal costs at News America Marketing, negative foreign currency fluctuations and increased stock-based compensation expense resulting from the acquisition of Move were partially offset by lower expenses at Amplify and increased revenues in the Book Publishing segment due to the inclusion of Harlequin results.
Free cash flow available to News Corporation decreased by $105 million in the nine months ended March 31, 2015 to $391 million, primarily as a result of certain one-time items.
BENGALURU: The Walt Disney Company Inc reported an increase of seven per cent in its revenue in Q2-2015 (quarter ended 28 March, 2015, current quarter) to $12461 million from $11649 million in the corresponding year ago quarter. Net income during the current quarter improved 10 per cent to $2108 million from $1917 million reported for the quarter ended 27 March, 2014 (Q2-2014).
Of the five segments that add to Disney’s numbers, three – Media Networks, Parks & Resorts and Consumer Products showed improvement in revenue, while the other two – Studio Entertainment and Interactive segments showed decline in revenues. Segment Operating Income from three – Parks and Resorts, Consumer Products, and Interactive increased, while segment operating income from Media Networks and Studio Entertainment declined in Q2-2015 as compared to Q2-2014.
“Our second quarter performance, marked by increased revenue, net income and EPS of US 1.23, demonstrates the incredible ability of our strong brands and quality content to drive results. The power of this winning combination is once again reflected in the phenomenal worldwide success of Marvel’s Avengers: Age of Ultron, which has opened at number one in every market so far,” said Disney chairman and chief executive officer Robert A Iger.
Segment Results
Media Networks
Media Networks revenues for the current quarter improved 13 per cent to $5810 million from $5134 million reported for Q2-2014. Operating Income from this segment declined two per cent to $2101 million in Q2-2015 from $2133 million in Q2-2014.
Two sub-segments – Cable Networks, and Broadcasting contribute to this segment.
Cable Networks reported a growth of 11 per cent in revenue to $4030 million in Q2-2015 from $3633 million in Q2-2014, but reported a drop of nine per cent in Operating Income to $1799 million in Q2-2015 as compared to the $1974 million in Q2-2014. The drop in income was due to a decrease at ESPN, which was driven by higher programming and production costs, partially offset by growth in affiliate and advertising revenues. Programming and production cost increases were due to higher rights costs for college football programming and the addition of an NFL wild card playoff game and the SEC Network, which was launched in August 2014.
Disney says further that the increase in affiliate revenues was due to contractual rate increases, an increase in subscribers, taking into account the new SEC Network, and a reduction in revenue deferrals as a result of changes in contractual provisions related to annual programming commitments. ESPN advertising revenue growth was due to higher rates and units sold.
Broadcasting reported 19 per cent hike in revenue in the current quarter to $1780 million from $1501 million and reported a massive 90 per cent increase in operating income to $302 million from $159 million in the corresponding quarter of last year due to growth in affiliate fees, higher program sales and an increase in advertising revenues. These increases were partially offset by higher marketing costs for the launch of new series.
Parks and Resorts
Parks and Resorts reported a growth of six per cent in revenue to $3760 million from $3562 million in the corresponding year ago quarter and a 24 per cent increase in Q2-2015 operating income to $566 million from $457 million in Q2-2014. Operating income growth for the quarter was due to an increase at Disney’s domestic operations, partially offset by a decrease at its international operations.
Studio Entertainment
Studio Entertainment reported decline in revenue to $1685 million in Q2-2015 as compared to the $1800 million in Q2-2014, and segment operating income decreased 10 per cent to $427 million from $475 million in Q2-2014.
Lower operating income was driven by decreases in domestic home entertainment and international theatrical distribution, partially offset by a higher revenue share with the Consumer Products segment, reflecting performance of Frozen merchandise in the current quarter, and lower film cost impairments. The decreases in domestic home entertainment and international theatrical distribution both reflected the performance of ‘Big Hero 6’ in the current quarter compared to Frozen in the prior-year quarter
Consumer Products
Consumer Products Q2-2015 revenue increased 10 per cent to $971 million from $885 million in Q2-2014 and operating income improved 32 per cent to $362 million from $274 million in Q2-2014.
Higher operating income was primarily due to an increase at Disney’s Merchandise Licensing business due to the performance of merchandise based on Frozen and, to a lesser extent, The Avengers.
Interactive
Revenue from this segment fell 12 per cent to $235 million in Q2-2015 from $268 million in Q2-2014, but segment operating income increased 86 per cent to $26 million from $14 million in Q2-2014.
Improved operating results were due to lower marketing and product development costs and the success of its mobile game Tsum Tsum, partially offset by lower ‘Disney Infinity’ performance and decreased sales of mobile game catalogue titles due to fewer titles in release. Lower marketing and product development costs were driven by fewer mobile game titles in development and the benefit of previous restructuring activities.
BENGALURU: Comcast Corporation reported 2.6 per cent growth in consolidated revenue in Q1-2015 (quarter ended 31 March, 2015, current quarter) to $17853 million as compared to the $17408 million in the corresponding year ago quarter. Comcast consolidated operating income increased nine per cent in Q1-2015 to $3890 million from $3568 million in Q1-2014.
The company’s Cable Communications, Filmed Entertainment and Theme Parks segments reported growth in revenue, while Cable Networks Broadcast Television and NBU Universal segments reported a y-o-y fall in revenue.
Comcast chairman and CEO Brian L Roberts said, “We are off to a great start in 2015, with 7.6 per cent operating cash flow growth and record quarterly free cash flow. Cable had a terrific quarter, once again reflecting strong results in high-speed Internet and business services. We have made progress in transforming the customer experience while delivering improved products and innovations faster than ever before. At NBC Universal, we had another excellent quarter, led by Super Bowl XLIX, which was the most-watched television program of all time, along with the tremendous box office success of Fifty Shades of Grey, and the exceptional performance of The Wizarding World of Harry Potter – Diagon Alley in Orlando. We begin 2015 with great momentum and remain confident that we are well positioned with an impressive portfolio of complementary businesses to continue our strong performance and drive shareholder value.”
Segment Results
Cable Communications
The company’s largest segment by revenue, Cable Communications reported 6.3 per cent revenue growth in Q1-2015 to $11430 million as compared to the $10757 million in Q1-2014, led by 21.5 per cent growth by its Business Services segment. Within the Cable Communications segment, revenue from Video grew three per cent to $5331 million in Q1-2015 from $5178 million in Q1-2015; High-speed Internet grew 10.7 per cent to $3044 million from $2750 million in Q1-2014; Revenue from Voice declined 1.5 per cent to $906 million from $920 million in Q1-2014; Business services revenue increased 21.5 per cent to $1114 million in Q1-2015 from $917 million in Q1-2014; Advertising Revenue fell 0.6 per cent to $504 million from $507 million in Q1-2014; Revenue from ‘Other’ grew 9.5 per cent to $531 million from $485 million in the corresponding year ago quarter.
NBC Universal
Revenue for NBC Universal decreased four per cent to $6604 million in the first quarter of 2015 compared to $6876 million in the first quarter of 2014. Excluding $376 million of revenue generated by the broadcast of the NFL’s Super Bowl in the first quarter of 2015 and $1100 million of revenue generated by the Sochi Olympics in the first quarter of 2014, revenue increased 7.9 per cent. Operating Cash Flow increased 14.0 per cent to $1494 million compared to $1311 million in Q1-2014, driven by strong results at Theme Parks and Broadcast Television.
Cable Networks
For the first quarter of 2015, revenue from the Cable Networks segment decreased 5.9 per cent to $2359 million as compared to $2505 million in Q1-2015. Excluding $257 million of revenue generated by the Sochi Olympics in Q1-2014, revenue increased 4.9 per cent, reflecting a 4.8 per cent increase in distribution revenue and a 4.3 per cent increase in advertising revenue. Excluding a benefit from a reduction in deferred advertising revenue, advertising growth would have been stable as audience ratings declines were offset by higher prices and volume. Operating cash flow increased 0.3 per cent to $898 million compared to $895 million in Q1-2014, reflecting lower programming and production costs due to the broadcast of the Sochi Olympics in the first quarter of 2014, partially offset by lower revenue.
Broadcast Television
For the first quarter of 2015, revenue from the Broadcast Television segment decreased 14.2 per cent to $2248 million compared to $2621 million in Q1-2014. Excluding $376 million of revenue generated by the NFL’s Super Bowl in Q1-2015, as well as $846 million of revenue generated by the Sochi Olympics in Q1-2014, revenue increased 5.5 per cent, driven by a 5.5 per cent increase in advertising revenue, as well as higher retransmission consent fees. Operating cash flow increased 48.9 per cent to $182 million compared to $122 million in Q1-2014, reflecting lower programming and production costs due to the broadcast of the Sochi Olympics in Q1-2014 and a profitable Super Bowl, partially offset by lower revenue.
Filmed Entertainment
For Q1-2015, revenue from the Filmed Entertainment segment increased seven per cent to $1446 million compared to the $1351 million in Q1-2014, reflecting higher content licensing and home entertainment revenue, partially offset by lower theatrical revenue. Operating cash flow increased 1.7 per cent to $293 million compared to $288 million in Q1-2014, reflecting higher revenue, partially offset by increased marketing expenses ahead of the release of Furious 7 early in the second quarter.
Theme Parks
For Q1-2015, revenue from the Theme Parks segment increased 33.7 per cent to $651 million compared to $487 million in the first quarter of 2014, reflecting higher guest attendance and per capita spending, driven by the continued success of Orlando’s The Wizarding World of Harry Potter – Diagon Alley. First quarter operating cash flow increased 54.6 per cent to $263 million compared to $170 million in the same period last year, reflecting higher revenue, partially offset by an increase in operating costs to support the new attractions.
BENGALURU: New Delhi Television Limited (NDTV) reported 31.8 per cent y-o-y growth in consolidated Total Income from Operations (TIO, revenue) to Rs 163.55 crore in Q4-2015 from Rs 124.09 crore in Q4-2014 and 9.1 per cent more than the Rs 149.93 crore in Q3-2015. TIO for FY-2015 at Rs 571.28 crore was 24.3 per cent more than the Rs 459.46 crore in FY-2014.
Note: 100,00,000 = 100 lakh = 10 million = 1 crore
The company reported consolidated loss after deferred tax (Rs 17.99 crore) and provision for diminution in the value of a quoted investment amounting to (Rs 7.81 core) of Rs 17.21 crore in Q4-2015. The Rs 7.81 crore is a non cash item-impairment of investment in Jaiprakash Power, as is the write down of deferred tax assets.
For Q4-2014, NDTV had reported a consolidated loss of Rs 31.39 crore and a profit after tax of Rs 1.56 crore in the immediate trailing quarter.
NDTV consolidated profit in Q4-2015 (before tax and exceptional items) was Rs 10.48 crore as compared to a loss of Rs 35.02 crore same quarter last year and a profit of Rs 2.34 crore in Q3-2015.
Loss in FY-2015 almost halved (reduced by 45.8 per cent) at Rs 44.03 crore as compared to the Rs 81.18 crore in FY-2014. NDTV (other than e-commerce) reported an EBIDTA of Rs 64 crore in FY-2015, as compared to an EBIDTA loss of Rs 6 crores last year. NDTV’s digital arm NDTV Convergence reported revenue of Rs 107 crore in FY-2015 at a 47 per cent growth as compared to FY-2014.
NDTV executive director and CEO Vikram Chandra said, “Overall it’s been a good year in all three areas of business. The TV and related areas saw a sharp turnaround, recording an EBIDTA improvement of about Rs 60 crore. The digital content business saw record revenue crossing the Rs 100 crore mark, together with strong profitability. And though the ecommerce business reported losses, as most of them do, there was an exponential increase in revenue- crossing Rs 60 crore in GMV.”
Segment results
Two major segments add to NDTV’s numbers: Media and related operations segment and Retail/E-commerce segment.
Media and related operations segment
NDTV’s Media and related operations (Media) segment revenue in Q4-2015 was up 38.3 per cent to Rs 157.09 crore from the Rs 113.61 crore in Q4-2014 and 8.5 per cent more than the Rs 144.74 crore in Q3-2015. This segment reported an operating profit of Rs 25.77 crore as compared to an operating loss of Rs 23.31 crore in Q4-2014 and almost double (up 92.2 per cent) the Rs 13.41 crore in Q3-2015.
For FY-2015, the Media segment reported 19.8 per cent growth in revenue to Rs 554.63 crore as compared to the Rs 462.79 crore in FY-2014. The segment reported an operating profit of Rs 31.92 crore as compared to an operating loss of Rs 39.43 crore in FY-2014.
Retail/E-commerce segment
This segment reported 94.3 per cent growth in revenue to Rs 6.8 crore as compared to the Rs 3.5 crore in Q3-2014 and 12.4 per cent more than the Rs 6.06 crore in Q3-2015. The operating loss from this segment increased to 9.99 crore as compared to a loss of Rs 6.25 crore in Q4-2014 and a loss of Rs 6.02 crore in the previous quarter.
For FY-2015, NDTV’s Retail/E-commerce segment reported revenue of Rs 19.57 crore as compared to the Rs 5.49 crore in FY-2014. Operating loss from this segment increased to Rs 23.67 crore in the current year from Rs 16.33 crore in the previous year.
The other results reported by NDTV for Q4-2015 and FY-2015 are as follows:
For Q4-2014, the company has pared major expenses, except production expense; and operating and administrative expenses.
Production expense in Q4-2015 at Rs 33.32 crore was 4.6 per cent more than the Rs 31.87 crore in Q4-2014 and 16.4 per cent more than the Rs 28.63 crore in Q3-2015. Production expense in FY-2015 at Rs 120.25 crore was 18.3 per cent more than the Rs 101.61 crore in FY-2014.
The company’s marketing and distribution and promotional (marketing) expense in Q4-2015 at Rs 24.93 crore was 8.8 per cent less than the Rs 27.34 crore in Q4-2014 and 19.4 per cent lower than the Rs 30.91 crore in the previous quarter. For FY-2015, marketing expense at Rs 106.57 crore was 5.6 per cent more than the Rs 100.94 crore in FY-2014.
Employee cost in Q4-2015 at Rs 44.57 crore was 6.7 per cent more than the Rs 41.79 crore in Q4-2014 and 4.4 per cent lower than the Rs 46.64 crore in Q3-2015. For FY-2015, employee cost at Rs 183.55 crore was 4.1 per cent more than the Rs 176.26 crore in FY-2014.
Operating and administrative (Admin) expenses in Q4-2015 at Rs 32.25 crore was 35.4 per cent lower than the Rs 49.96 crore in Q4-2014 and was 18 per cent more than the Rs 27.33 crore in Q3-2015. For FY-2015, Admin expense at Rs 121.98 crore was 14.4 per cent lower than the Rs 142.48 crore in FY-2014.
It may be noted that NDTV’s subsidiaries had paid managerial remuneration for the years 2011-12, 2012-13 and 2013-14, which was in excess of the specified limits / existing Central Government approvals. Following the outcome of representations made to Central Government, the subsidiaries have reversed excess remuneration paid till 30 September, 2014 amounting to Rs 4.71 crore in the previous quarter ended 31 December, 2014 and the amount has been credited in Employee Costs (Rs 1.10 crore) / Operating & Administrative Expenses (Rs 3.61 crore) with consequential impact on the net profit for the quarter.
BENGALURU: Viacom Inc. reported three per cent increase in its Media Network revenue to $2452 million in the quarter ended 31 March, 2015 (Q2-2015, current quarter) from the $2375 million reported for the corresponding year ago quarter. The $77 million increase was more than offset by a two per cent negative impact of foreign exchange (forex) and a 21 per cent decline in revenue to $659 million in Q2-2015 from 831 million in Q2-2014. Overall, the company’s revenue in Q2-2015 declined three per cent to $3078 million as compared to the $3174 million reported for Q2-2014.
The company reported a six per cent lower adjusted operating income (excluding restructuring and programming charges) of $822 million in the current quarter as compared to the $872 million in Q2-2014. Factoring in restructuring and programming charges of $784 million, the company’s adjusted operating income for Q2-2015 was just $38 million.
The company reported a loss attributable to Viacom of $210 million in Q2-2015 as compared to a profit of $502 billion in Q2-2015.
Viacom executive chairman Sumner M. Redstone said, “Viacom’s outstanding brands deliver great entertainment content on every screen, from film to television, mobile and beyond. We have the global footprint and the expert leadership to continue our success.”
Viacom president and chief executive office Philippe Dauman added, “We are deeply committed to investing in more and more original content, expanding in international growth markets, where we are launching networks at a rapid pace, and adapting to changes in technology and consumer behavior. In the quarter, Viacom’s Media Networks delivered higher advertising and affiliate revenues, and new hits like Lip Sync Battle set the stage for even more exciting, original programming across our networks. Paramount Pictures also continues to be a proven hit maker. The SpongeBob Movie: Sponge Out of Water was the first title from our brand new Paramount Animation division and a box office success around the world, and we look forward to the releases of Terminator Genisys and Mission: Impossible – Rogue Nation this summer.
“With our strategic realignment largely complete, Viacom is in excellent position to take full advantage of the many opportunities in the rapidly evolving media environment. The $175 million in savings to be achieved in fiscal 2015 and substantial ongoing annual benefit will allow us to move efficiently through the second half of the year and beyond,” added Dauman.
During the six month period ended 31 March, 2015 (6M-2015), Viacom revenue improved slightly by 0.8 per cent to $6422 million from $6371 million in 6M-2014. Comprehensible Income attributable to Viacom for 6M-2015 was $169 million, which was less than a sixth (1/6.4 times) the $1082 reported for 6M-2014.
Media Networks
Media Networks revenues increased $77 million, or three per cent, due to higher advertising revenues in Q2-2015, driven by the acquisition of Channel 5 Broadcast Limited in September 2014, and affiliate fees, partially offset by the impact of foreign exchange. Excluding an unfavourable four per cent and two per cent impact of foreign exchange, Filmed Entertainment revenues declined 17 per cent and Media Networks revenues increased five per cent, informs Viacom.
Media Networks adjusted operating income declined $46 million, reflecting an increase in programming and promotional expenses, partially offset by higher revenues.
Within Media Networks, advertisement revenues increased four per cent in Q2-2015 to $1172 million from $1124 million in Q2-2014, Affiliate fees improve three per cent to $1146 million in Q2-2015 from $1114 million in Q2-2014, while Ancillary revenue reduced three per cent to $134 million from $137 million in the corresponding year ago quarter.
Filmed Entertainment
The company says that lower Filmed Entertainment segment revenue was because of lower license fees and home entertainment revenues. Filmed Entertainment adjusted operating income declined $10 million due to the number and mix of available titles in the television licensing windows.
Within Filmed Entertainment, Theatrical revenues went down $24 million or 10 per cent to $205 million in Q2-2015, on the back of lower mix of prior period releases and 35 per cent lower international theatrical revenues. The Sponge Bob Movie: Sponge out of water and Selma helped spike revenues up by $41 million. Worldwide home entertainment revenues decreased $63 million, or 25 per cent, to $194 million in the quarter. Revenues from current quarter titles decreased $32 million driven by the mix of releases. Domestic home entertainment revenues decreased 16 per cent and international home entertainment revenues decreased 35 per cent. Foreign exchange had a seven percentage point unfavourable impact on international home entertainment revenues.
BENGALURU: Indian consumer products in beauty and wellness space company Marico Limited spent 10.4 per cent less towards advertisement and sales promotion (ASP, marketing) in the fourth quarter ended 31 March, 2015 (Q4-2015, current quarter) at Rs 137.15 crore (11.2 per cent of net Total Income from Operations or TIO) as compared to the Rs 153.02 crore (10.5 per cent of TIO) in the immediate trailing quarter, but 12.5 per cent more as compared to the Rs 121.91 crore (11.4 per cent of TIO) corresponding year ago quarter (Q4-2014). During FY-2015, the company’s ASP at Rs 649.82 crore(11.3 per cent of TIO) was 15.8 per cent more than the Rs 561.17 crore (12 per cent of TIO) in FY-2014.
Notes: 100,00,000=100 Lakhs = 1 crore = 10 million
During the 13 quarter period starting Q4-2014 until the current quarter, the highest amount spent by the company towards ASP was in Q1-2015 at Rs 192.18 crore (11.8 per cent of TIO). The company’s highest ASP spend in terms of per centage of TIO was in Q3-2013 at 14.1 per cent (Rs 152.82 crore). While in absolute rupees, ASP shows a linearly increasing trend during the 13 quarters under consideration, in terms of per centage TIO, the trend declines linearly during the same period. Please refer to Figs. A and A-1 below.
Marico’s TIO in Q4-2015 at Rs 1226,25 crore was 15.6 per cent less than the Q3-2015 TIO of Rs 1452.23 crore but was 14.4 per cent higher than the Rs 1072.76 crore in the year ago quarter. The highest TIO reported by the company during the 13 quarters under consideration was in Q1-2015 at Rs 1623.13 crore. TIO shows an increasing linear trend during this period. Please refer to Fig B below.
For FY-2015, Marico reported 22.3 per cent growth in TIO at Rs 5732.98 crore as compared to the Rs 4686.52 crore in the previous year – refer Fig A-1 above.
PAT in FY-2015 at Rs 573.46 crore (10 per cent TIO) was 18.1 per cent more than the Rs 485.38 crore (10.4 per cent of TIO) in FY-2014.
PAT in Q4-2014 at Rs 110.04 crore (nine per cent of TIO) was 31.2 per cent lower than the Rs 159.88 crore (11 per cent of TIO) and was 24 per cent more than the Rs 88.77 crore (8.3 per cent of TIO) in Q4-2014. During the 13 quarters under consideration, PAT shows an increasing linear trend both in terms of absolute rupees and in terms of per centage of TIO. Please refer to Fig B below:
Marico claims that it touches the lives of one out of every three Indians, through its portfolio of brands such as Parachute, Parachute Advansed, Saffola, Hair and Care, Nihar, Nina-r Naturals, Livon, Set Wet, Zatak, Mediker, Revive and Manjal. The company says that its international consumer products portfolio contributes to about 25 per cent of the group’s revenue, with brands like Parachute, HairCode, Fiancée, Caivil, Hercules, Black Chic, Code 10, Ingwe, X-Men, L‘Ovite and Thuan Phat.
Marico MD and CEO Saugata Gupta said, “We continued our journey of delivering sustainable profitable growth this quarter. Simultaneously we are taking definitive long term steps in creating the organization of the future especially in our identified areas of transformation. We are confident of a gradual improvement of the sector growth in the coming quarters especially in the urban markets while the rural consumption trends will depend a bit on the performance of the monsoon.”
BENGALURU: Turner’s record adjusted operating income growth of 26 per cent to $1128 million for Q1-2015 as compared to the $895 million in Q1-2014 was offset in part by declines at Warner Bros. and Home Box Office (HBO) says Time Warner Inc.
Time Warner’s adjusted operating income grew 11.6 per cent to a record $1814 million during the quarter ended 31 March, 2015 (Q1-2015, current quarter) as compared to the $1626 million in Q1-2014. Time Warner revenue was up 4.8 per cent to $7127 million in Q1-2015 as compared to the $6803 million during the corresponding quarter of last year. The revenue increase was due to growth in all divisions says the company.
Time Warner chairman and CEO Jeff Bewkes said, “We got off to a very strong start in 2015, with revenues up five per cent, and adjusted operating income growing 12 per cent to a quarterly record of $1.8 billion. This led to a 23 per cent increase in adjusted EPS and puts us on track to achieve our goals for the year. We accomplished a lot in the quarter, led by Turner, which had its best quarter ever, with audience growth across a number of its networks. The NCAA Men’s Basketball Tournament was a huge multiplatform success, with its highest average television viewership in over two decades helping make TBS the #1 ad-supported cable network in primetime among adults 18-49 in the quarter. And March Madness Live served more than 80 million live video streams and grew its usage by almost 20 per cent over last year’s tournament. Warner Bros. led the domestic box office for the quarter on the strength of American Sniper, which brought in well over $500 million globally. Warner Bros. also continued to lead the industry in television production, including the #1 comedy and unscripted series among adults 18-49 on television this season. HBO once again grew domestic subscribers in the quarter while continuing to gain acclaim for groundbreaking programming such as the recent documentaries Going Clear: Scientology and The Prison of Belief and The Jinx: The Life and Deaths of Robert Durst. The return of Game of Thrones reached a new premiere high, while also providing the backdrop for the highly-anticipated launch of HBO Now, our standalone streaming version of HBO – which is off to a great start. Reflecting our strong commitment to provide direct returns to shareholders, we returned more than $1.4 billion in dividends and share repurchases year-to-date.”
Segment Results
Turner
Turner reported 4.5 per cent growth in revenue to $2710 million in Q1-2015 from $2593 million in Q1-2014. Turner’s adjusted operating income has been mentioned above.
The company says that Turner benefited from growth of four per cent ($42 million) in advertising revenues, three per cent ($38 million) in subscription revenues and 25 per cent ($37 million) in content and other revenues.
Turner advertising revenues benefited from growth at Turner’s domestic businesses mainly due to the 2015 NCAA Division I Men’s Basketball Championship tournament (NCAA Tournament) and growth at Turner’s news businesses. Subscription revenues grew due to higher domestic rates partially offset by lower domestic subscribers. Both international advertising and international subscription revenue growth were more than offset by the impact of foreign exchange rates. The increase in content and other revenues was due to higher subscription video-on-demand revenues.
Turner’s adjusted operating income increased 26 per cent primarily due to higher revenues and lower expenses, including lower marketing, programming and general and administrative costs, largely as a result of operational efficiency initiatives and timing. Programming costs declined three per cent due primarily to timing and lower syndicated programming expenses as a result of the abandonment of certain programming in 2014.
HBO
Home Box Office revenue in Q1-2015 was up 4.4 per cent to $1398 million as compared to the $1339 million in Q1-2014. Adjusted operating income fell 1.3 per cent to $458 million in Q1-2015 from $468 million in the corresponding year ago quarter.
According to the company, HBO revenues grew four per cent and reflect increases of four per cent ($49 million) in subscription revenues and five per cent ($10 million) in content and other revenues. Subscription revenues increased primarily due to higher domestic rates, partially offset by the transfer to Turner of the operation of HBO’s basic cable network in India. The increase in content and other revenues reflected higher home entertainment revenues and higher international licensing revenues.
HBO adjusted operating income declined one per cent ($6 million) to $458 million, as higher revenues were more than offset by higher programming, distribution and marketing costs. Programming costs grew nine per cent, primarily due to increased expenses for original programming. Distribution costs increased primarily due to higher participation expenses. The increase in marketing costs was primarily related to the launch of HBO Now.
Time Warner informs that through the first two weeks, the fifth season premiere of Game of Thrones totalled 18.1 million gross viewers, over one million more viewers than the prior season’s first episode after the same period of time. In April 2015, Home Box Office launched HBO Now, its stand-alone streaming service, in the US.
Warner Bros
Warner Bros revenue grew 4.3 per cent to $3199 million in the current year from $3066 million in Q1-2014. Adjusted operating income declined 13.2 per cent to $330 million in Q1-2015 from $380 million reported in the corresponding year ago quarter.
Warner Bros revenue increase, reflects higher television licensing revenues primarily due to the subscription video-on-demand sale of Friends and higher revenues from videogames. Revenues also benefited from growth in theatrical revenues led by the strong performance of American Sniper. The increase was partially offset by the effect of foreign currency exchange rates.
Adjusted Operating Income declined 13.2 per cent, as higher revenues were more than offset by higher film and advertising costs due to the mix of theatrical releases and videogame product.
Through 27 April, American Sniper grossed over $540 million at the worldwide box office. On 9 April, Warner Bros., its TT Games business and The Lego Group announced Lego Dimensions, a videogame experience that combines physical Lego brick building toys based on multiple franchises, including Warner Bros.’ DC Comics, The Lord of the Rings and The Lego Movie, with interactive console gameplay.