BENGALURU: Bringing Network18 Media and Investments Limited (Network 18) to the black is still work in progress for its new board, but it should get there soon, considering the company’s Q2-2015 numbers and TAM data for its bouquet of news and GEC channels led by Colors, CNBC, CNN-IBN and ETV among others.
Please refer to the attached financial performance statement and press release for the various figures and TAM data reported by Network18.
Network18 reported 11.2 per cent y-o-y and 5.1 per cent q-o-q growth in consolidated Total Income from Operations (TIO) in Q2-2015. The company’s consolidated TIO in Q2-2015 was Rs 744.84 crore versus Rs 669.85 crore in Q2-2014 and Rs 708.39 crore in Q1-2015. Corresponding HY-2015 and HY-2014 TIO numbers were Rs 1226.48 crore and Rs 1023.98 crore respectively, indicating a decent 18.1 per cent growth in the current half year.
Note: 100,00,000 = 100 Lakhs = 10 million = 1 crore
Let us look at the other Q2-2015 and HY-2015 numbers reported by Network18
Consolidated loss for Q2-2015 was lower at Rs 36.47 crore versus the one time adjusted massive loss of Rs 1021.88 crore in the last quarter and the Rs 36.28 crore in Q2-2014. Loss in HY-2015 has widened to a huge Rs 1058.35 crore because of the Q1-2015 adjustments, versus the Rs 20.93 crore loss in HY-2014.
Correspondingly, consolidated profit before depreciation, interest and taxes (PBDIT) numbers for the current quarter has improved to Rs 33.6 crore which was 36.2 per cent higher than Rs 24.7 crore in the immediate trailing quarter and 14.9 per cent more than the Rs 29.3 crore in the year ago quarter. In H1-2015, consolidated PBDIT at Rs. 58.3 crore was 6 times (up 514 per cent) more than the Rs. 9.5 crore in H1-2014.
The company’s consolidated total expenditure at Rs 746.90 crore (100.3 per cent of TIO) was 1.8 per cent more than the Rs 733.45 crore (103.5 per cent of TIO) in Q1-2015 and 11.5 per cent more than the Rs 670.1 crore (fractionally more than 100 per cent of TIO) in Q2-2014. HY-2015 total expenditure at Rs 1480.36 crore (101.9 per cent of TIO) was 15.5 per cent more than the Rs 1281.92 crore (104.5 per cent of TIO) in HY-2014.
Consolidated Programming cost at Rs 172.39 crore (23.1 per cent of TIO) was 1.7 per cent more than the Rs 169.54 crore (26.7 per cent of TIO) in Q1-2015 and 10.5 per cent more than the Rs 143.84 crore (21.5 per cent of TIO)in Q2-2014. HY-2015 programming cost at Rs 341.93 crore (23.5 per cent of TIO) was 46.9 per cent more than the Rs 232.71 crore (19 per cent of TIO) in the corresponding half year -period of last year.
Finance costs in Q2-2015 was 6 per cent lower at Rs 29.01 crore (3.9 per cent of TIO) versus the Rs 30.88 crore (4.4 per cent of TIO) in Q1-2015 and 4.3 per cent more than the Rs 27.83 crore (4.2 per cent of TIO) in Q2-2014. Finance costs in HY-2015 at Rs 59.89 crore (4.1 per cent of TIO) was 0.6 per cent more than the Rs 59.53 crore (4.9 per cent of TIO) in HY-2014.
On a consolidated basis, two segments contribute to the company’s numbers – Media Operations (MO) and Film production and distribution (Film).
Consolidated Segment figures
MO revenue in Q2-2015 was 4.5 per cent more at Rs 727.94 crore versus the Rs 694.08 crore in Q1-2015 and 19.3 per cent more than the Rs 607.8 crore in Q2-2014. In HY-2015, MO reported revenue of Rs 1419.05 crore which was 23.8 per cent more than the Rs 1146.61 crore in HY-2014.
MO reported operating profit of Rs 3.88 crore in Q2-2015 versus an operating loss of Rs 83.88 crore in Q1-2015 and an operating profit of Rs 9.46 crore in Q2-2014. For HY-2015, operating loss from MO widened to Rs 79.90 crore from Rs 30.39 crore in HY-2014.
Film segment reported 38.7 per cent higher revenue at Rs 19.85 crore in Q2-2015 versus the Rs 14.32 crore in Q1-2015, but was 68 per cent lower than the Rs 62.05 crore in Q2-2014. For HY-2015, Film segment revenue fell by 57.7 per cent to Rs 34.17 crore from Rs 80.85 crore in HY-2014.
Film segment reported operating loss of Rs 4.38 crore in Q2-2015, operating loss of Rs 0.95 crore in Q1-2015 against an operating profit of Rs 3.13 crore. For HY-2015, this segment’s operating loss for both HY-2015 and HY-2014 was Rs 5.33 crore .
Network18 Standalone Q2-2015 and HY-2015 numbers
On a standalone basis, Network18 reported lower TIO in Q2-2015 at Rs 16.80 crore versus the Rs 17.77 crore in Q1-2015 and the Rs 29.23 crore in Q2-2014. HY-2015 TIO at Rs 57.95 crore was better than the Rs 34.58 crore in HY-2014. Standalone loss for Q2-2015 at Rs 18.52 crore was lower than the Rs 637.96 crore in Q1-2015 (one-time adjustment) and the Rs 32.59 crore in Q2-2014.
Standalone segment figures
Three segments contributed to Network18 standalone numbers – Event Management (EM), Web operations (WO) and Publishing business (publishing).
Event management had no revenue in Q2-2015 and Q1-2015, and Rs 8.95 crore revenue in Q2-2014. Operating losses from this segment in Q2-2015, Q1-2015 and Q2-2014 were Rs 0.11 crore, Rs 0.06 crore and Rs 0.76 crore respectively.
WO reported revenue of Rs 12.98 crore in Q2-2015, Rs 12.68 crore in Q1-2015 and Rs 9.22 crore in Q2-2014. Operating losses from this segment were Rs 2.75 crore in Q2-2015, Rs 3.99 crore in Q1-2015 and Rs 9.99 crore in Q2-2014.
Publishing segment reported revenue of Rs 3.82 crore in Q2-2015, Rs 5.09 crore in Q1-2015 and Rs 10.59 crore in Q2-2015. Operating losses from this segment were Rs 1.66 crore in Q2-2015, Rs 2.29 crore in Q1-2015 and Rs 3.91 crore in Q2-2014.
Additional Notes
1. Pursuant to the enactment of the Companies Act, 2013 (the Act), the Group has, effective from 1st April, 2014, reassessed the useful life of its fixed assets and has computed depreciation with reference to the useful life of assets as recommended in Schedule II to the Act. . Consequently Depreciation for the quarter and half year ended 30th September is higher by Rs.1.16 crore and Rs.9.78 crore respectively and net loss is higher by Rs. 1.16 crore nd Rs.9.78 crore respectively. Further, based on the transitional provision provided in Schedule II, an amount of Rs. 7.13 crore has been adjusted with the opening reserves during the half year ended 30th September 2014.
2. During the quarter ended 30th June, 2014, based on a review of the (i) investments, and (ii) other current and non-current assets, the Group has accounted for (a) diminution in the value of certain investments to the extent of Rs. 142.83 crore and goodwill Rs. 234.78 crore; (b) obsolescence/impairment in the value of certain tangible and intangible assets to the extent of Rs. 127.43 crore and (b) write-off and provisions of non-recoverable and doubtful loans/advances /receivables to the extent of Rs. 519.41 crore and the same has been disclosed as Exceptional Items. Further, Exceptional Items for the said quarter ended 30th June 2014 also includes Rs. 20.94 crore towards severance pay and consultancy charges. However, these adjustments will have no impact on the future operating profit and cash flows of the businesses of the Group.
3. Equator Trading Enterprises Private Limited ("Equator") including its subsidiaries Panorama Television Private Limited and Prism TV Private Limited had become wholly owned subsidiary of the Company with effect from 22nd January, 2014. Hence, the consolidated results of the current period also include the results of these subsidiary companies. Eenadu Television Private Limited had also become an associate with effect from 22nd January 2014 and its results have been accounted as “Associate” under accounting standard 23 on Accounting for Investments in Associates in Consolidated Financial Statements. To this extent, the results of this period are not comparable with the corresponding previous period.
