Hyderabad: Debt-laden newspaper publisher Deccan Chronicle Holdings Ltd (DCHL) on Tuesday posted a loss of Rs.100.05 crore for the quarter ended 30 September on account of a decline in revenue and increased costs. The Hyderabad-based company had earned a profit of Rs.21.09 crore in the year-ago period.
On a sequential basis, DCHL narrowed its loss from Rs.166.24 crore in the June quarter, said the company, which revealed in its earnings statement that it had debt to the tune of nearly Rs.4,000 crore and that the shareholding of its promoters had almost halved.
DCHL announced its earnings one day before its shares were to be suspended from trading on the National Stock Exchange (NSE). NSE, in a notice one week ago, said it would suspend trading in the company’s shares because of non-submission of financial results and shareholding pattern.
The media company hadn’t reported its results for the fiscal year ended 31 March and for the first two quarters of the fiscal. In August, DCHL said it received approval from the Registrar of Companies, Andhra Pradesh, to extend its fiscal year 2011-12 by six months.
For the full year to 31 March 2012, the company posted a loss of Rs.774 crore against a net profit of Rs.163 crore for the previous fiscal, Press Trust of India reported.
Deccan Chronicle Holdings’ stock declined 4.95% to finish at Rs.5.57 on BSE on Tuesday, while the benchmark Sensex was down 0.6% to 19,981.57 points.
Analysts have seen the rapid decline in the fortunes of the company, which owned the erstwhile Indian Premier League franchise Deccan Chargers, a chain of book stores under the Odyssey brand name and had ventured into aviation, partly as a result of debt-funded diversification into non-publishing businesses.
DCHL said its debt was Rs.3,987.50 crore, for the first time publicly putting a figure on the amount it owes various financial institutions. According to its September results statement, the company had long-term borrowings to the tune of Rs.147.20 crore and short-term borrowings amounting to Rs.3,755.70 crore.
DCHL valued its fixed assets, including its brand equity, at Rs.2,905.31 crore. Cash reserves, which totalled Rs.1,231.45 crore for the year ended March 2011, were wiped off the balance sheet to a deficit of Rs.31.78 crore as of September 2012.
DCHL’s financials have deteriorated so rapidly that it suggests there is something beyond “any operational or macro-economic reason that the management needs to explain”, said Satish Kantheti, head of the equity research division at Hyderabad-based brokerage house Zen Securities Ltd.
T. Venkattram Reddy, chairman of DCHL, and P.K. Iyer, managing director, could not be reached at their offices for comment. Aides said both were out of town.
DCHL said in its financial statement that it was negotiating with some of its bankers for restructuring liabilities. It acknowledged that some of its lenders had classified the company’s loans as non-performing assets.
Some lenders have also invoked promoters’ shares pledged as collateral after they failed to repay loans, leading to the promoters’ shareholding in the company falling from 73.83% as of June 2012 to 38.40% at the end of the September quarter.
The company’s promoters are contesting this move by the lenders, which were not identified. “Promoters have contested the invocation and appropriation of the pledge by the lenders,” Iyer said in the results statement.
The company’s woes began with the resignation of its managing director N. Krishnan in July.
Four of DCHL’s independent directors resigned on 8 December for reasons that remain undisclosed, and were replaced by three additional directors.
HT Media Ltd, publisher of Mint and Hindustan Times, competes with DCHL publications in some markets.