HT Media reported a net profit of Rs 75 crore for the quarter ended March 31, 2018 (Q4 FY18), up 194% from Rs 25.5 crore in the same quarter last year, and down 40% from Rs 124.3 crore in the previous quarter. The decline in ad revenue did, however, have an impact on operating revenues for the quarter, which declined marginally, by 4.1% on a year-on-year (YoY) basis, to Rs 561 crore from Rs 585 crore. This significant increase in net profit on a yearly basis is partly because the company continues to reduce its expenses every quarter. In Q4 FY18, total expenses stood at Rs 532 crore, as compared to Rs 567.7 crore in the same quarter last year.
In its earnings call, Rajiv Verma, Group CEO of HT Media said that, “last year witnessed tight cost control on discretionary spending as well as structural cost take-out in the company with the help of BCG, who partnered with HT to look at the entire cost structure of the company…Whatever loss-making business was there in the company, during this year, we have taken a hard look and restructured them.”
On Digital business
In Q4FY18, HT Media’s digital revenues declined by 26%, at Rs 28.7 crore from Rs 38.8 crore in the same quarter last year. The segment posted a loss of Rs 17 crore, as compared to a loss of Rs 6.5 crore in Q4 FY17 and a loss of Rs 9.9 crore in Q3 FY18.
On this, Group CFO of the company, Piyush Gupta said that there are some other discontinued businesses which sitting in the base but not in Q4’18 which basically brings down the quarterly revenue. “However, our full-year revenue decrease of Rs 19 crore is mostly contributed by the discontinued businesses, which was made up by the news website business which is showing growth as we move forward.”
On an analyst’s question about continued losses in digital segment, Piyush Gupta said that, “I think you will have to peel the onion a little bit to get to the story because digital segment actually constitutes 2 or 3 different heterogeneous businesses in our scheme. The news business actually improved, and the margins have improved there. The discontinued businesses, as I was alluding, which was contributing revenue in the base but not margin has brought the top-line down by about Rs 19 crore.”
On Shine’s business, Gupta said that it has been soft and “continues to elude us and there is a margin erosion and the losses have expanded there. So, in the nutshell Shine has expanded losses whereas the news website businesses had actually improved the margins and improved the revenue.
What is the way forward for Shine.com? Gupta said, “I think Shine has been one of the areas where in spite of our best efforts, we have not been able to make significant advances on the financial statements. Reasons could be various. Reasons could be execution, reasons could be the market where it operates or reason could be competition.”
He added that there are a few new things that the company is trying right now, which should enable the group to kind of pivot the whole business in a more healthy financial stage.
HT Media launched a separate e-learning marketplace Shine Learning as part of its job portal Shine.com. Targeted at working professionals, Shine Learning offers mostly paid courses & certifications. The company says that the platform uses data (both recruiters’ and candidates’) to map demands of various skill sets across industries, predict emerging skill shortage areas and provide courses based on that. The platform offers industry and government recognized certifications, course recommendations, user reviews. It lists some 500 odd courses across categories like sales & marketing, banking, HR, IT, media, law amongst others. Apart from courses, the platform also as free and paid services such as profile building, career guidance, CV writing etc. The company has partnered e-learning platforms such as Skillsoft India, Digital Vidya, Tax Sutra, Get Cert Go, Grey Campus etc to offer the courses.
In the call, Gupta said that ” We have also gone into a business of providing learning products to audience and customers on our site. That business has got immense potential and we are working on improving the performance of that business.”
Rajeev Gupta said that in print, overall advertising continues to be soft. “Some categories have started coming back and given the fact that this is an election year, we continue to believe that the advent of advertising will happen strongly… Banking and finance has started doing relatively well now because companies are feeling confident about doing IPOs as well as advertising their brands to the customers in financial sector.”
He added that that local advertising is still hurting because of the fact that some of the smaller players are still trying to re-adjust and balance their business into GST impact that they have had. “I believe this is the passing phase and you would have all seen GST has started collecting highest ever collections by the government,” Gupta said. This shows that stabilization is on the cards.
In regards to Hindustan Media Ventures Limited (HMVL), the publisher of the Hindi-language daily Hindustan, HMVL’s CEO Rajeev Beotra said that HMVL did not see any erosion of advertising spends in this particular belt. The good thing about this particular category is that it is tremendously dependent on very local advertising as well.
“You see, unlike English, which is far more heavily dependent on national advertisers which are into digital and television. Hindi belt is hugely dependent on local advertisers also. Now these local advertisers do not have a television option and not so much into digital either. So, we are seeing a good secular growth in the Hindi advertising revenues for a reasonably long period of time which is why as Piyush was mentioning earlier we are continuing to invest as well in this particular business”.
Download: Call Transcript