Network18 operating revenue rises 15% as news business profit improves

Media firm Network18 Media and Investments Ltd on Tuesday reported a 58.1 percent year-on-year (YoY) jump in consolidated net profit at Rs 61.8 crore for the fourth quarter ended March 31, 2022.

In the corresponding quarter last year, the company posted a net profit of Rs 39.1 crore. Consolidated operating revenue for the quarter rose 14.6 percent YoY to Rs 1,621.1 crore from Rs 1,414.7 crore in the year-ago quarter.

At the operating level, consolidated EBITDA declined 4.5 percent to Rs 265.8 crore in Q4 FY22 over Rs 278.3crore in Q4 FY21. EBITDA margin stood at 16.4 percent in Q4 FY22 as compared to 19.7 percent in Q4 FY21. EBITDA is earnings before interest, tax, depreciation and amortization.

The company reported a 15 percent growth in operating revenue driven by movie business and advertisement revenue growth. TV news revenue grew 10 percent YoY and the margin was at 21.4 percent. The entertainment business revenue grew 11 percent YoY and the margin was at 16 percent. The digital news revenue grew 32 percent YoY and the margin was at 8 percent.

Network18’s total expenses were at Rs 1,409.40 crore, up 17.79 percent in the fourth quarter of FY22 as against Rs 1,196.52 crore a year ago. For the fiscal year ended March 2022, Network18’s consolidated net profit rose 53.25 percent to Rs 837.65 crore. It had reported a net profit of Rs 546.59 crore in FY21.
Revenue from operations stood at Rs 5,880.19 crore in 2021-22. This was 24.97 percent higher than Rs 4,705.11 crore in the preceding fiscal.
The company reported the highest-ever operating profit of Rs 1,080 crore (+36 percent YoY), driven by the robust financial performance of all three verticals – TV news, entertainment, and digital news.

The TV news margins expanded by 500bps to 21 percent with strong revenue growth and continued cost controls providing operating leverage. The entertainment business maintained margins at a strong 18+ percent, despite a substantial 26 percent YoY increase in operating costs. Digital news saw a sharp turnaround in profitability driven by growth in advertisement revenues.

Adil Zainulbhai, Chairman of Network18, said: “FY22 was a remarkable year, not only from the perspective of numbers but in terms of building a strong foundation on which the business can continue to grow for the foreseeable future. The financial performance has vindicated our decision of investing in new businesses a few years ago which have started showing encouraging positive results.”

The TV news business’s EBITDA and margins have increased continuously for the last 4 years, with EBITDA growing >7x and margins becoming 5x. The entertainment business delivered 18+ percent margins despite the costs going up significantly as investments in content across markets were scaled up. Also, the digital news turned profitable in FY22 and delivered margins close to group margins, a sharp turnaround from being barely break-even a year ago.

He said, “In a similar vein, we have set ourselves an ambitious target to become a leading player in the digital space while strengthening our core TV offering. We will continue to solidify our ‘Digital First, TV Always’ proposition, leveraging our existing strengths to grow in segments where we are present and breaking ground in new markets with new and innovative offerings.”

Zainulbhai said the strategic partnership Network18 has struck for Viacom18 is a big step in this direction which will help set the company on a long-term growth trajectory and create one of India’s leading content companies. CNBC TV18