TV Today Network Ltd, the company that operates India Today and Aaj Tak news channels, reported better than expected numbers for the Apr-Jun period, thanks to surprising resilience in its TV channel revenues..
India Today, which depends on advertising for nearly all its top line, saw revenue from its TV broadcasting business fall by about a fifth compared to the Jan-Mar period, and about a third compared to the same period of last year.
Even though the fall is steep, it is still not as bad as what most people had expected, or what has been reported by print media companies that have already reported their Apr-Jun numbers.
TV broadcasting accounts for over 80% of the group’s total revenue, and the deceleration in ad revenue in the TV business hurt both the top line and the bottom line.
However, the company managed to avoid slipping into a loss,but its profit fell to Rs 12.8 cr in Apr-Jun from Rs 27.8 cr in Jan-Mar and Rs 51.0 cr in the same period of last year.
Overall, operational revenue fell by 19.6% compared to the March quarter to Rs 167.7 cr. Compared to the year-ago period, operating revenue was down 31.9%. Within the Rs 167.7 cr, TV accounted for Rs 137.8 cr.
The company’s relatively decent performance on the profit front was on the back of a cut back in ‘other’ operating expenses and production costs.
TV Today Network brought down the expenses on these two items by around Rs 23 cr compared to the March quarter, which helped cushion the decline of Rs 41 cr in its revenue.
Most of the other expenses remained largely stable, including its employee costs of around Rs 60 cr.
The quarter was one of setbacks for the company’s FM broadcasting business.
Even though both TV and radio are almost equally dependent on advertising revenue, the decline seen in radio revenue was much sharper than what was seen on TV, possibly because of the cushioning impact provided by government ads on TV.
Revenue at the radio business fell by a whopping 94% to Rs 23 lakh from Rs 3.65 cr in the preceding, March quarter.
In terms of the bottom line, the TV business had operating profit of Rs 25.5 cr, while the radio business suffered a loss of Rs 5.6 cr, up from a loss of Rs 4.1 cr in the March quarter and a loss of Rs 3.73 cr in the year-ago period.
Interestingly, the company’s ‘other business’ — comprising primarily its websites and possibly its magazines — was also surprisingly resilient.
The ‘other’ business reported revenue of Rs 27.6 cr, down from 29.7 cr in the March quarter and Rs 28.9 cr in the same quarter of last year.
However, it was the only division to see an improvement in its profit margins, with operating profit increasing to Rs 5.5 cr in the latest period from Rs 4.7 cr in the March period.
The company also confirmed that it was “suspending” the publication of its only newspaper, Mail Today, to tide over the COVID-19 crisis.
Newsprint prices have shot up in recent weeks, while advertising has dried up.
Revenue from the newspaper business fell by about two thirds to Rs 2.1 cr, from Rs 6.9 cr three months earlier and Rs 5.7 cr a year earlier.
Losses widened to Rs 2.2 cr from Rs 3 lakh in the March period and a loss of Rs 35 lakh in the year-ago period.
It said it has decided to stop printing “Mail Today” with effect
from August 10, 2020 “for now”, given the poor viability of print media in the current situation.
“The content shall continue to be published in digital format. It is pertinent to mention that since the Newspaper “Mail Today” comprises of insignificant portion of business of the Company (Mail Today newspaper in physical mode contributed less than 2% to the total revenues of the Company during the quarter ended June 30,2020), therefore the said suspension shall not have any material impact on overall business of the company,” it said.