Mumbai: Network18 Media & Investments Limited today announced its results for the quarter and year ended 31st March, 2017. It’s posted consolidated revenues of Rs. 3,471 crores (including proportionate share of JVs) in FY17 a 5% YoY growth, driven largely by its TV operations. Segment profits were significantly impacted by pullback in advertising spends in the latter half, operating losses of the new initiatives in regional and digital broadcasting, and losses in digital commerce businesses.
Highlights for the quarter
- Tepid ad-industry environment dragged revenues, especially in regional markets. The media industry is still facing impact of deferment of advertising spends that kicked-in from November-December 2016 on likely slow-down in consumer spending. Further, the revival of advertising spends has been witnessed at a much faster clip for national channels, while regional markets are still recovering with a lag. This has been exacerbated by our launches of regional news and entertainment channels over the last 18 months, including 4 in early-FY17.
- Despite headwinds, Network18’s consolidated topline (including JVs) was flat YoY. ListedØ subsidiary TV18 posted 7% YoY topline growth and its operating profits excluding impact of new initiatives was Rs. 92.6 crores (vs. Rs. 96.7 crores in Q4 FY17).
- Viewership around key events demonstrated our News franchise leadership andØ excellence of coverage. CNBC TV18, during the live coverage and analysis of the Union Budget on 1st Feb 2017, garnered 86% market share. On Counting Day of the Assembly Elections of 5 states, CNN News18 was the #1 English News channel.
- Viacom18 continues to showcase its strength in Hindi General Entertainment, RegionalØ entertainment and Kids genres. Colors is now a strong #2 channel, while Nick and Sonic together place us as the top Kids content provider today with a ~29% market-share.
- Amidst a challenging market environment, the group continued to focus on scaling up itsØ digital platforms. OTT entertainment app VOOT continues to gain traction, and we are witnessing more sticky usage patterns than competition. Opinions website “Firstpost” and flagship finance portal “MoneyControl” were standout performers, and have posted impressive growth in traffic.
- HomeShop18 has contributed substantially to the weakness in Network18 profitability.Ø The TV home-shopping business continues to face challenges due to a hit to cash-on-delivery payments and a poor spending appetite since November, competition from e-commerce and regulatory issues including imposition of entry tax by several states. The management is taking steps to cut costs and accelerate operating break-even.
Mr. Adil Zainulbhai, Chairman of Network18, said: “The digital space in India continues to become more and more vibrant, as bottlenecks around connectivity and cost reduce substantially. We see the emergence of new formats and services, and rapidly-evolving business models; and aim to be at the forefront of this change. Our strength in linear media provides us the edge, helping us leapfrog in our aspiration to be a channel-agnostic provider of top-drawer content”.
Financials for the quarter
- The consolidated Revenue (including proportionate share of Joint Ventures considered for segment reports) for the quarter ended 31st March, 2017 stood at Rs. 898.4 crores vs. Rs. 898.8 crores in the corresponding quarter last year. The FY17 consolidated revenue stood at Rs. 3471.1 crores, up 5% from Rs. 3321 crores last year.
- Segment loss before Interest and Tax on a consolidated basis, including the performance of Joint ventures for the quarter ended 31st March, 2017, stood at Rs. 65.5 crores vs segment profit of Rs. 65.3 crores in the corresponding quarter last year. Excluding the impact of new initiatives and one-time expenses, the Segment profit for the quarter is Rs. 5 crores.
- The consolidated Revenue as per Ind AS (accounting the JVs under Equity method) for the quarter ended 31st March, 2017 stood at Rs. 387.7 crores as compared to Rs. 473.2 crores in the corresponding quarter last year. The FY17 consolidated Ind-AS revenue stood at Rs. 1491.0 crores, down 2% from Rs. 1527.3 crores last year.
- Operating loss on a consolidated basis under Ind AS for the quarter ended 31st March, 2017 stood at Rs. 20.7 crores, vs segment profit Rs. 82.7 crores in the corresponding quarter last year. Excluding the impact of new initiatives and one-time expenses, the operating profit for the quarter is Rs. 55.2 crores.
New initiatives and one-time charges
- The new initiatives of Viacom18 (2nd Kannada GEC Colors Super, OTT video destination VOOT and movie channel Rishtey Cineplex) continued to perform well on all operational metrics. The aggregate operating loss of the new initiatives considered in the consolidated segment results for the quarter is Rs. 36.1 crores.
- Three regional news channels – News18 Kerala, News18 Tamil Nadu and News18 Assam/N.E — that were launched during the first quarter of the current year incurred an operating loss of Rs. 26.9 crores during the quarter
- “fyi TV18”, a lifestyle programming channel from the AETN18 stable (a JV between TV18 and A&E Network), commercially launched in July 2016, gained a market share of 21% in the quarter. The channel incurred an operating loss of Rs. 7.6 crore during the quarter