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Tag: operational expenses

  • Cineline India’s revenue from operations saw a 12.7 per cent steep decline

    Cineline India’s revenue from operations saw a 12.7 per cent steep decline

    Mumbai: Remember those carefree days when a weekend meant one thing—heading to the cinema, popcorn in hand, with family or friends by your side? Or the thrill of slipping out of a college lecture, knowing a movie adventure awaited? Those were the golden days of cinema. Yet, post-Covid, the big screen seems to have lost some of its allure, and Cineline India’s recent Q2 FY25 results tell a sobering story. Released today, the report reveals an industry grappling with the harsh realities of a shrinking audience base and mounting financial strain. For the quarter ending 30 September 2024, Cineline’s revenue from operations saw a steep 12.47 per cent drop, falling to Rs 5,583.66 lakhs from last year’s Rs 6,378.72 lakhs. As operational expenses climb and finance costs escalate, the road to profitability is riddled with challenges.

    The numbers reveal a company grappling with mounting expenses and shrinking profits. Total income for the quarter was Rs 5,617.60 lakhs, a decline from the previous year’s Rs 6,455.44 lakhs. Cineline’s movie exhibition cost—a significant operational component—reached Rs 1,583.38 lakhs, compared to Rs 1,931.11 lakhs last year. This reduction in costs was likely an attempt to mitigate the impact of lower revenues; however, it did not prove sufficient to offset other rising expenses. Notably, finance costs surged to Rs 727.95 lakhs, from Rs 716.53 lakhs in Q2 FY24, placing further pressure on profit margins.

    Cineline’s operating loss for continuing operations stood at Rs 607.30 lakhs, a sharp contrast to last year’s profit of Rs 702.36 lakhs. This swing into negative territory highlights Cineline’s current financial strain, driven by a combination of weaker income and heightened expenses. Although depreciation and impairment expenses rose to Rs 550.60 lakhs from Rs 489.09 lakhs, the overall expenses have grown notably, stressing the profitability margins.

    Further complicating Cineline’s financial landscape are discontinued operations associated with R&H Spaces Private Limited, its wholly-owned subsidiary classified as ‘Non-Current Assets held for sale’. This segment reported an after-tax loss of Rs 348.10 lakhs, exacerbating the company’s financial position. This negative outcome contrasts sharply with last year’s profit of Rs 15.51 lakhs, a downturn driven by market fluctuations and an inability to find prospective buyers swiftly enough to offset expenses.

    For stakeholders, Cineline’s Q2 FY25 results indicate an increasingly challenging environment in cinema exhibition. While the company has undertaken cost-cutting measures, the sharp decline in revenues and heightened financial costs have reduced the scope for quick turnaround. As Cineline aims to divest from non-core assets and consolidate its focus, the current financial constraints reflect a period of adjustment and realignment. However, the path to recovery may hinge on the company’s ability to attract new investment, manage rising operational costs, and secure strategic divestitures for better liquidity.

    Cineline India Q2 FY25 Financial Highlights:

    1.    Revenue Decline: Revenue from operations dropped by 12.47 per cent YoY to Rs 5,583.66 lakhs, down from Rs 6,378.72 lakhs in Q2 FY24.

    2.    Total Income: The total income stood at Rs 5,617.60 lakhs, a decrease from Rs 6,455.44 lakhs last year.

    3.    Operational Loss: Operating loss for continuing operations was Rs 607.30 lakhs, a reversal from last year’s profit of Rs 702.36 lakhs.

    4.    Increased Finance Costs: Finance costs rose to Rs 727.95 lakhs from Rs 716.53 lakhs in Q2 FY24.

    5.    Overall Profit/Loss: Net loss from continuing and discontinued operations was Rs 963.07 lakhs, reflecting the challenging operational environment.

     

  • Britannia Industries shows 5.3 per cent YoY revenue growth in Q2

    Britannia Industries shows 5.3 per cent YoY revenue growth in Q2

    Mumbai: As a child, I fondly remember reaching for Britannia’s Good Day cookies, drawn in by the promise that even on a rough day, those cookies could spark a smile. This quarter, it seems Britannia itself enjoyed a ‘Good Day’ as it reported resilient financial results for Q2, ending September 2024. The company’s total revenue from operations rose to Rs 4,667.57 crore, a 5.3 per cent increase year-on-year, driven by surging domestic demand, a broadened product range, and expanded distribution across India’s rural and urban sectors. Yet, while revenue painted a bright picture, profitability revealed a bit more complexity. Net profit declined by around 9.4 per cent to Rs 531.55 crore, reflecting the pressures of rising costs that have started to weigh on margins.

    The quarter’s revenue increase was complemented by other operating income, totaling Rs 4,713.57 crore, which is a notable rise from Rs 4,485.23 crore in Q2 FY24. Despite this uptrend in revenue, Britannia’s profitability faced headwinds. The company’s cost of materials soared by 12.9 per cent, amounting to Rs 2,578.05 crore, signaling intensified raw material cost burdens. Additionally, employee benefits expenses reached Rs 232.28 crore, up by 45.3 per cent year-on-year, reflecting Britannia’s focus on workforce expansion and talent retention amid a competitive labor market.

    VC & MD, Varun Berry said, “An eight per cent volume growth with a sequential increase in revenue and operating profits are satisfactory results in the face of severe commodity inflation leading to a tepid consumer demand scenario in most FMCG categories.”

    The profit before tax, after adjusting for exceptional items, stood at Rs 715.15 crore, a decrease from Rs 798.63 crore reported in the same quarter last year. Tax expenses further tightened the profit margin, with total tax outflows recorded at Rs 183.60 crore. This leaves the net profit for the quarter at Rs 531.55 crore, showing a decline from Rs 586.50 crore in Q2 FY24. Britannia’s operational expenses also contributed to the contraction in net margins, rising by 11.1 per cent to Rs 3,994.87 crore, primarily due to inflationary pressures on logistics and supply chain costs.

    The company reported consolidated sales of Rs 4,566 crore for Q2, a year-over-year growth of 4.5 per cent. However, profit after tax (PAT) decreased by 9.6 per cent to Rs 531 crore. Compared to the prior quarter, sales rose by 10.6 per cent, with a 5.1 per cent PAT increase. For the six months ending 30 September 2024, sales grew 4.3 per cent year-on-year, while PAT declined by 0.8 per cent. The results highlight Britannia’s sales resilience amidst economic challenges, though profitability remains impacted by rising costs and workforce investments.

    A notable development during this quarter was Britannia’s exceptional expenses totaling Rs 24.79 crore, largely attributed to voluntary retirement schemes (VRS) for factory workers and associated labor restructuring efforts. These measures are expected to enhance operational efficiency in the long term by streamlining the workforce at key manufacturing facilities. Britannia also invested heavily in contract labor in the wake of increased production targets, a move aimed at reinforcing the company’s manufacturing capabilities to support market demand.

    Despite the contraction in profitability, Britannia’s balance sheet remains solid, with a positive outlook on revenue streams from both domestic and international markets. The ongoing demand for packaged foods and baked goods continues to present a strong growth trajectory for the company. “Our agenda of being a ‘Total Global Foods Company’ is progressing well with our adjacent businesses such as Croissant, Milk Shakes, Wafers and International growing at a healthy pace. Making strides in this direction, we are working on redefining our distribution strategy to optimise range distribution and improve outlet servicing, and the preliminary results of the pilots across 25 cities covering more than 50,000 outlets are encouraging” added Berry.

    The company’s total comprehensive income, factoring in other gains, came to Rs 533.01 crore, slightly down from Rs 589.39 crore in Q2 FY24. Additionally, Britannia’s consistent investments in expanding its product portfolio and supply chain suggest a robust setup for future growth, although profitability will likely remain susceptible to fluctuating raw material costs and labor expenses. Berry remarked on the situation, “In the context of steep rise in prices of key commodities such as Wheat, Palm, Cocoa etc, we demonstrated agility in initiating focused pricing actions and identifying new levers for cost optimisation across the value-chain. As a result, we maintained a healthy operating margin of 15.5 per cent during the quarter. We are committed to investing in capability enhancement and brand development with the clear objective of driving market share and sustaining profits”.

    Britannia Industries has demonstrated both resilience and adaptability in a challenging financial environment, marking stable revenue growth yet grappling with cost pressures. The outlook remains cautiously optimistic, bolstered by Britannia’s solid market presence and strategic product diversification.

  • Raj TV’s financial woes deepen despite 53 per cent revenue surge

    Raj TV’s financial woes deepen despite 53 per cent revenue surge

    Mumbai: Raj Television Network Limited, a longstanding player in the regional media landscape, reported its unaudited financial results for Q2 FY2025. The results reveal a downward trend in profitability and rising operational expenses, challenging the company’s financial stability. Despite a 53 per cent revenue boost to Rs 359.3 million from Rs 234.5 million in the prior year, this increase did not translate into profitability. The high costs, notably a 77 per cent surge in cost of revenue to Rs 293 million, outpaced revenue growth, resulting in a net loss of Rs 168 million for the quarter, a stark contrast to a modest profit of Rs 217,000 in Q2 FY2024.

    Operating expenses surged by 35 per cent year-over-year, driven by escalating costs in core functions. Employee benefits decreased marginally by 6 per cent, reflecting cost-control efforts, yet operational expenses remained high. Finance costs increased by over 60 per cent, reaching Rs 10.3 million, which, combined with increased borrowing, amplified the financial strain.

    Balance sheet liabilities reflect rising pressures; current liabilities rose by nearly 39 per cent, with trade payables ballooning from Rs 60.5 million to Rs 145.4 million, signalling cash flow challenges. Current assets, meanwhile, were relatively static, highlighting potential liquidity constraints. Cash and cash equivalents diminished significantly to  Rs 3.3 million, a steep decline from  Rs 26.7 million at the beginning of the fiscal year.

    Raj Television’s pivot to higher revenue has yet to offset its expenditure growth, underscoring the need for strategic intervention to address profitability and cash flow. Going forward, Raj TV faces a critical need for fiscal recalibration to stabilise and reduce rising debt.

    Financial highlights for Raj Television Network’s Q2 FY2025 performance:

    1. Revenue Growth: Revenue rose by 53 per cent to Rs 359.3 million, up from Rs 234.5 million in Q2 FY2024.

    2.   Net Profit : The company reported a net loss of Rs 168 million, compared to a modest profit of Rs 217,000 in the same quarter last year.

    3.  Operational Expenses : Total expenses surged by 35 per cent year-over-year

    4. Cost of Revenue : Cost of revenue rose sharply by 77 per cent, reaching Rs 293 million.

    5. Employee Benefits : Employee costs decreased by 6 per cent year-over-year.

    6. Finance Costs: Finance expenses increased over 60 per cent, totaling Rs 10.3 million, exacerbated by increased borrowing.

    7. Trade Payables: Current liabilities, including trade payables, jumped 39 per cent, rising from Rs 60.5 million to Rs 145.4 million.

    8. Cash Flow: Cash and cash equivalents dropped significantly to Rs 3.3 million, down from Rs 26.7 million at the fiscal year’s start.