Mumbai: UTV Software Communications Ltd reported an operating loss for July-September, but benefits from deferred tax on broadcasting business helped the media group almost double its net profit.
“UTV reported an operating loss of Rs16.45 million from a Rs188.6 million profit a year ago after expenditure rose on account of consolidation of new media and broadcasting,” Ronnie Screwvala, managing director, told analysts.
The company’s net profit almost doubled to Rs251.4 million on net sales of Rs1.54 billion. The company had deferred taxes worth Rs338.3 million, while the loss before taxes stood at Rs3.76 million.
“It is a deferred tax asset that we can utilise as we go forward,” Screwvala said.
Net sales more than doubled helped by broadcasting and new media businesses, which focuses on digital distribution of content over web and mobile.
Broadcasting Expense Cut
“UTV may double its revenue in the current fiscal on a consolidated basis,” he said, adding that it is also cutting its investment in the broadcasting business.
“We are looking at a 80-100% growth this year,” he told analysts, adding: “Carriage fees have substantially kept increasing quarter-on-quarter basis.”
“We do believe there is a slowdown in advertising that is hitting everyone 1 November onwards. I think delay in digitalisation in the space will also create some slowdown,” he said.
“UTV plans to spend about Rs1 billion more over the next 18 months. It is cutting expenditure down by Rs1.4 billion -1.5 billion,” he added.
The broadcasting business posted revenue of Rs247.7 million and a loss before interest and tax of Rs87 million.
UTV Global Broadcasting Ltd, the broadcasting unit of UTV Software, runs the two youth channels, Bindass and Bindass Movies, as well as UTV Movies and World Movies.
In August, Walt Disney Co acquired 15% stake in UTV Global Broadcasting for Rs1.18 billion, while UTV Software bought 75% stake for Rs2.4 billion.
The founders now hold 10% in the broadcasting unit. Disney holds 32% in UTV Software.
Shares in UTV Software closed up 2.6% at Rs473.85, in a Mumbai market that fell 2.2%.