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Network18 Reports Rs 6.8 Cr Profit, Rs 697.4 Cr Revenue For Q3FY13

Network18 group appears to have made a turnaround during the quarter ending December 31, 2012, posting a consolidated net profit of Rs 6.8 crore, as compared to Rs 22.6 crore loss in the previous quarter and Rs 85.8 crore loss in the corresponding quarter last year.

The group has posted a consolidated revenue of Rs 697.4 crore for the quarter ending December 31, 2012, up 30.6% from Rs 534 crore revenues in the previous quarter and up 53.37% from Rs 457.7 crore revenues in the same quarter last year. Read about the digital and e-commerce results here.

Download: Release | Financials

TV18 Business

TV18, the broadcasting subsidiary of Network18 has reported a net profit of Rs 21.3 crore for the quarter ending December 31, 2012, as compared to Rs 40.6 crore loss in the previous quarter and Rs 53.5 crore loss in the corresponding quarter last year.

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The company posted operating revenues of Rs 512.4 crore, up from Rs 365.1 crore in the previous quarter and Rs 296.6 crore in the corresponding quarter last year. Note that this revenue includes the entire revenue generated from its broadcasting operations (news and entertainment operations), its infotainment operations (AETN18), its distribution operations through Indiacast, a joint venture with Viacom18 and 50% share of Viacom18 and 50% share of IBN Lokmat.

Contribution Of News Channels To Revenues 

Network18’s news channels reported for Rs 150.4 crore revenue and Rs 37.6 crore profit, as compared to Rs 143 crore revenue and Rs 9.2 crore profits in the corresponding quarter last year.

The general news operations broke into profit during the quarter, reporting a total profit of Rs 6.9 crore as compared to 1.6 crore loss in Q3FY12. It posted a total revenue of Rs 72.3 crore for the quarter, a marginal improvement over Rs 71.9 crore revenues in Q3FY12. Operating Margin stood at 10% as compared to -2% in Q3FY12. The group currently operates general news channels like CNN IBN, IBN7 and IBN Lokmat.

The business news channels also reported a significant increase in its profits, reporting a total profit of Rs 30.7 crore for the quarter, up 184% from Rs 10.8 crore in Q3FY12. It posted a total revenue of Rs 78 crore for the quarter, up from Rs 71.1 crore in Q3FY12. The operating margin also increased to 39% from 15% in Q3FY12. The group attributes this increase to the expansion of its Net Distribution Income. TV18 currently operates business news channels like CNBC TV18 and CNBC Awaaz and claims that both the channels are the market leaders in its categories.

Entertainment Operations

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Viacom18’s entertainment channels has reported an operating profit of Rs 21.6 crore for the quarter, up from Rs 19.6 crore in Q3FY12. The total revenues for the quarter stood at Rs 234.6 crore, a significant 51.25% growth from Rs 155.1 crore in Q3FY12. The operating margin dipped to 9% from 13% in Q3FY12.

During the quarter, the company launched two new digital-only channels Nick Jr and Nick Teen. It also claimed that Colors took the top spot in its genre for multiple weeks and continues to be N0.2 channel during weekday prime time.

ETV Operations

Network18 said that it has started integrating ETV non-Telugu News to its Entertainment operations and reported revenues for ETV News and Entertainment segments. While ETV News posted Rs 26.3 crore revenue and EBITDA profit of 6.6 crore, ETV Entertainment posted Rs 60.3 crore and EBITDA loss of 3.9 crore.

Network18 also stated out that it may need to re-invest a significant amount into content and marketing to gain back audience, which may harm ETV’s profitability during the re-investment phase.

In January 2012, Reliance Industries (RIL) had divested a part of its interest in ETV Channels to TV18 Broadcast Limited. TV18 and Network18 had funded this acquisition through a consolidated Rs 5400 crore rights issue, a part of which was subscribed to Network18 Promoters backed by RIL backed Independent Media Trust. Around Rs 2100 crore of the funds raised by TV18 were used for the acquisition, while the rest will be used to pay debt and for working capital requirements. In September 2012, both TV18 and Network18 had filed for a rights issue with the BSE.

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While Network18 had filed for a rights issue of Rs 2699.62 crore, offering 89,98,73,930 shares in the ratio 307:50, being offered at Rs 30 per share to existing shareholders, TV18 Broadcast had filed for a rights issue of Rs 2699.16 crore, offering 134,95,77,882 shares, in the ratio 41:11, being offered at Rs 20 per share to existing shareholders.

Infotainment Operations: 

AETN-18 India, the joint venture between Network18 group and A&E Television Networks, has reported a net loss of Rs 3.5 crore, a significant decline from Rs 25.3 crore loss in Q3FY12 and total revenues of Rs 10.5 crore, up from 2.2 crore in Q3FY12. The operating margin stood at -33%.

Distribution Operations

IndiaCast, the joint venture between TV18 and Viacom18 which currently manages the TV18’s and Viacom18’s distribution operations, has reported a net loss of Rs 1.1 crore and total revenue of 144.3 crore for the quarter.

The company also notes that the net distribution revenue has turned positive for the quarter, reporting Rs 17.8 crore revenue. Net Distribution revenue is the subscription revenues earned by the company after deducting the carriage fees and any promotions or commission paid during the quarter.

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The company however notes that it has considered IndiaCast as a 100% subsidiary for the quarter and it is subject to change once the 50% capitalization by Viacom18 is complete.

Last month, online video streaming service, iStream had inked a multi-year licensing deal with IndiaCast, allowing iStream to offer content from the network’s 20 channels to its users through online streaming, video on demand services and on Internet-enabled devices including smart phones and tablets. Among the channels included were Viacom 18’s entertainment channels like COLORS and MTV, TV18’s news channels like CNN IBN, CNBC TV18, CNBC Awaaz, IBN 7 and IBN Lokmat, History 18 from A&E 18 and the entire bouquet of regional channels from the ETV Group.

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