Tips‘ fortunes have swung back to profitability in the first quarter of fiscal 2010 with the company recording a net profit of Rs. 12.75 million compared to a net loss of Rs. 2.49 million in the previous quarter but it is down 58.5% year on year.
Net sales fell 43% to Rs. 56.59 million. Expenses remained low at Rs. 31.83 million with raw material consumption costs dropping 70.8% YoY and 25.3% from last quarter to Rs. 3.24 million. Distribution expenses further reduced to Rs. 0.35 lakhs.
Details: Tips Q1-10 Financials (PDF)
Ad expenses rose to Rs. 1.41 million while copyright and inhouse music costs fell16.5% to Rs. 3.34 million. Depreciation has fallen to Rs. 1.74 million. Last quarter, the company approved the buy back of shares for Rs. 198 million, amounting to approximately 25% of the existing paid up equity share capital plus free reserves. Basic EPS has lifted itself to Rs. 0.74 from last quarter but is down 58.4% year on year.
Audio Products division saw a 27% rise in profit before tax to Rs. 40.22 million and income, which fell 43.8% from last quarter, rose 6% year on year to Rs. 59.36 million. The company deployed Rs. 558.269 million in capital in its Audio Products business. Note that for the purpose of valuation of inventories of Finished Goods, Tips takes the cost of copyright and in-house music production cost as overheads; in absence of records of title-wise stock, the entire cost is approportioned on an average basis (33.05 lakhs).
Film Production And Distribution
This segment continues to suffer losses, recording Rs. 0.23 million for the quarter, compared to Rs. 3.77 million in loss last quarter, though it made a profit of Rs. 35.74 million in Q1-09, which fell to Rs. 7 million by the third quarter last fiscal. Income for the segment was only Rs. 16,000 compared to Rs. 41.5 million in Q1-09; note that the films business cannot be compared on a quarter on quarter basis, due to the long sales and production cycles; both costs and revenues tend to be lop sided.