Network18 swings to profit in March quarter

Mumbai: Network18 Media and Investments Ltd, which has a presence in the television, movies and e-commerce businesses, swung to a consolidated net profit of ₹ 50 lakh in the three months ended 31 March, from a net loss of ₹ 172.42 crore in the year-ago period.

add_main_imageRevenue rose 6.9% to ₹ 679.5 crore in the quarter from 635.78 crore in the same period a year ago, the firm said on Monday.

For the full year to 31 March, the company posted a net loss of ₹ 105.46 crore, compared with a loss of ₹ 392.66 crore in the previous year. Revenue rose 25% to ₹ 2,400.8 crore. Operating loss narrowed to ₹ 39 crore from ₹ 296 crore.NextMAds

After the completion of a sale of shares to existing investors, Network18’s net debt at a consolidated level fell to ₹ 211 crore from ₹ 2,246 crore at the end of the second quarter in September, before the sale. Net debt at its television and movie arm TV18 fell to ₹ 197 crore from ₹ 1,132 crore in the same period.

“Network18’s and TV18’s net debt now stands at less than one-fifth of the peak levels and our interest payments have come down sharply,” said Raghav Bahl, managing director, Network18. “We are confident that we are now entering a sustained value-creation phase in our journey as we continue to strengthen our existing operations and consolidate our regional acquisition.”

To enter the regional markets, last year, TV18 (a subsidiary of Network18) signed an estimated ₹ 2,500 crore deal to acquire 100% of five news channels—ETV Uttar Pradesh, ETV Madhya Pradesh, ETV Rajasthan, ETV Bihar and ETV Urdu—from Ramoji Rao’s Ushodaya Enterprises Pvt. Ltd that runs Telugu newspaper Eenadu. Simultaneously, it acquired a 50% stake in regional entertainment channels of the firm and 24.5% in ETV Telugu and ETV Telugu News.

TV18 posted a net profit of ₹ 17.3 crore for the quarter. It made a net loss of ₹ 33.4 crore in the year-ago period. Revenue at TV18 fell to ₹ 474.7 crore, compared with ₹ 505.48 crore in the same period.

TV18 posted a net profit of ₹ 165 crore in the full fiscal year (excluding one-time expenses, revenue and losses towards new launches and discontinued operations), as compared with a net profit of ₹ 75.9 crore in the same period a year ago. Revenue rose to ₹ 1,699.1 crore from ₹ 1,409.86 crore.

The company’s digital content and e-commerce business revenue grew 193% to ₹ 400.9 crore in the full year to March from the previous year (adjusted for the sale of Newswire18). The segment reported 200% growth in revenue at ₹ 1,10.4 crore for the quarter, during which it sold its entire 70% in NewsWire18 to private equity fund Samara Capital.sixthMAds

The company also divested its stakes in Yellow Pages, a business directory, and Askme, an online search engine, and diluted its majority stake in Bookmyshow. The transactions added ₹ 180 crore to profit for the year and raised ₹ 235 crore of cash for the Network18 group.

“These transactions are in line with our stated objective of divesting stakes in non-core assets to create value for our shareholders and allowing infusion of growth capital in these assets to propel them to the next stage,” the company said in a statement.

The company said it had entered into an agreement with hedge fund OCP Asia to raise $30 million in its premier e-commerce business HomeShop18.

“We are now on a solid net distribution income trajectory and while our flagship channels like CNBC TV18/Awaaz, Colors and CNN IBN continue to perform admirably, we are also enthused by the performance of recent launches and the motion pictures business,” said B. Saikumar, group chief executive. “Inspite of near-term challenges given the macroeconomic headwinds, we are hopeful of delivering a strong year ahead.”

On Monday, Network18 Media and Investments shares lost 6.3% to ₹ 37.95 and TV18 Broadcast Ltd fell 10.2% to ₹ 28.6 while BSE’s Sensex lost 2.14%.