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Here are some highlights from the HT Media post result conference call this morning. Call was attended by HT Media CEO Rajiv Verma, Fever 104 FM business head Keertivasan and chief financial strategist Vinay Mittal.
Radio business: The merger of Fever 104 FM into the company contributed Rs7.4 crore to the topline. Management is pleased with the performance of the radio business, with the station topping the ratings in Mumbai and Bangalore. The company is now ready to scale up and will look at both participating in the FM Phase 3 license auctions (as and when it happens) and also look at acquisitions. Radio business had revenues of Rs30 crore for the fiscal and also Ebitda losses of Rs30 crore. The operation would have achieved break even during the last quarter but for the fact that some revenue had to be deferred and shown in the next quarter. Operating costs are expected to come down next fiscal as the marketing and brand building costs incurred this fiscal will not be repeated.
Print business: Hindi business is registering strong growth. Circulation revenue grew about 5%. Pagination has been cut across the board. The company consumed 147,000 tonnes of newsprint during the last fiscal at an average rate of Rs35,000 per tonne. Cheaper newsprint will kick in this year. Mint made losses of Rs39 crore during the fiscal. According to the latest figures from the Audit Bureau of Circulation, Hindustan had a circulation of 16.5 lakhs, Hindustan Times had 15 lakhs and Mint, 1.1 lakhs. Mint will launch in Kolkata within the next one month and in Chennai, with two months, as we had reported earlier.
Internet business: Shine.com has crossed 2.2 million registered users. The downturn in the job market also affected Shine, but the situation is slowly improving. The Internet business posted Ebitda losses of Rs48 crore. This is expected to come down to Rs35 crore next year. “If it doesn’t perform, the business will certainly be reviewed,” Mittal said at one point, adding, “there may be a change in strategy.” CEO Rajiv Verma, however, defended the business throughout. “Online business is certainly the future for any media company. We all know what is happening in the West. Media companies are under pressure because the consumer has migrated online and they did not have a profitable model in place in time. We do not want our company to come under the same pressures in the future,” Verma said.
At another stage, he said: “Those who are not making investments online now may find–and this may happen sooner than latter–that consumer habits have shifted online.” Responding to a question if HT will expand also into other classified verticals such as matrimonials and real estate, Verma said not until the existing business gained enough traction. “This is a new domain for us. It takes time for any company to build competencies in a new domain and we’d like to see Shine gaining traction in the market just like Fever and Mint has. We remain committed to this business and we thing it is a good investment that the company has made.” When asked how the company was planning to monetize the online business, Verma said while he admitted that companies worldwide have found it difficult to make money online, “now there is a huge paradigm shift happening in terms of monetizing content online”.
Participation in growth programme: The company invested about Rs200 crore in the participation in growth programme (ads for equity) and it yielded revenues of Rs19 crore in Q4.
Capex for next fiscal: The company will invest Rs40 crore in capex and Rs40 crore in a joint venture with Germany’s Hubert Burda Media to set up what was described as a “media BPO” (business process outsourcing) unit. The joint venture has captive business in the form of Burda’s existing business in the Asia Pacific region that will be transferred to the JV and is expected to break even in the first year of operation.
Cost optimization, revenues and consolidated figures: A range of cost optimization initiatives have been undertaken across the board, including manpower, raw material and operational overheards such as travel. The gains from these will kick in starting this fiscal. Ad revenue growth has been under strain with clients deferring ad spends or cutting them, but the company expects it to pick up gradually. Ad yields are as good if not better than competition in all markets. The drop in consolidated net profit was due to the absorption of losses as follows: Rs 30 crore from the radio business, Rs48 crore from the Internet business, Rs16 crore from the Metro Now JV with Bennett, Coleman, and Rs5 crore spends on the Burda JV.