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Q2-09: UTV Invests Rs. 256.39 Crores In Gaming; EBITDA Losses; Increases Stake In ITNation, IndiaGames

UTV LogoFor the quarter ended September 30th 2008, UTV net profit grew to Rs. 32.8 crores, up from Rs. 17.6 crores for the same quarter last year, while Operating Revenues grew to Rs 170.8 crores from Rs 71.9 crores for the same quarter last year.

Note: The year on year comparison isn’t valid since UTV has revenues from its acquisitions during the last fiscal, including those from True Games for September 10th to 30th 2008. The company structure has been rather fluid as well. As an example, the True Games acquisition is via a subsidiary we haven’t heard mentioned before, called UTV Games.

It’s interesting to note that despite investments in TV, New Media and Interactive (Gaming), Movies continues to be the largest contributor to revenues. During the quarter, Disney also infused Rs. 1.18 billion into UTVs broadcasting business. A look at their Interactive and New Media segments:

Interactive

The Interactive segment reported revenues of Rs. 21.55 crores for the quarter, and contributed around 14 percent to UTVs operating revenues. However, as was the case last quarter, the Interactive segment continued to make a loss at the EBITDA level – of Rs. 2.77 crores, and a staggering increase in investment at Rs. 256.39 crores.

Last quarter, the company had invested Rs. 133.79 crores in the Interactive segment. UTV Interactive consists of Ignition Entertainment (console gaming), True Games (Massively Multiplayer Online Games) and Indiagames (Mobile Games, Broadband based PC Games distribution).

Indiagames
During the quarter, IG Interactive Entertainment Ltd, a subsidiary of UTV acquired an additional 3.78 % equity stake in Indiagames. Indiagames appears to have had an excellent quarter – UTV Chairman and CEO Ronnie Screwvala has said that Indiagames has witnessed consistent QoQ growth, with a year-on-year increase of 150% growth in revenues.

Rights: Indiagames has exclusive rights to distribute games from Glu, THQ and Iplay in India. It has also entered into a 14 movie deal with group company UTV Motion Pictures, as well as games from group company Ignition Entertainment. UTV expects similar deals with other group companies. Indiagames also acquired licenses to Ghajini, Paanchvi Pass, Nach Baliye, ICL, Batman, Indiana Jones, Moto GP 2008, FIFA09 and Need for Speed.

True Games
A California based MMOG company, True Games will focus primarily on the US and Turkey markets. UTV Games Ltd., a wholly owned subsidiary of the UTV, has acquired 80% stake in True Games Interactive.

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Ignition Entertainment
published the following games during the quarter:


New Media (Music & Internet)

During the quarter, UTV New Media Ltd., a subsidiary of UTV increased its equity stake in ITNation Media Private Ltd. from 76.50% to 89.04%. With revenues of Rs. 6.26 crores, this segment has contributed only 4 percent to the operating revenues of the compan, and reported an EBITDA loss of Rs. 2.17 crores. At the same time, it’s important to note that investment has been low in the new media business, compared to Gaming, at just Rs. 30.89 crores. UTV is claiming the No.2 spot for UTVi.com, beating out Myiris.com

Rights: UTV New Media has also acquired digital rights to the Hindi movie Cheenti Cheenti Bang Bang, and in the South Indian market – Mittail and Poi Solla Poram. They’ve also acquired rights to Rafi Resurrected by singer Sonu Nigam.

Q209 Details: Financials, Release

From Q109: Results | Analysis/Report
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