Sun TV Profits Hit By New Tariff Order

Southern media giant Sun TV Network has disclosed a weak performance for the quarter ending March 2019, reporting a profit after tax of Rs 283.07 crore, down 2 percent year-on-year. According to brokerages and analysts, the company is likely to see continued impact from the Telecom and Regulatory Authority of India’s (TRAI) New Tariff Order over the next few months. 

Muted advertising and subscription revenue was the primary factor that impacted growth in earnings, however, overall revenue for the firm grew by a substantial 24 percent at Rs 888 crore. As for EBITDA (earnings before interest, tax, depreciation and amortisation), the company recorded a 16 per cent increase to Rs 608 crore, but margins contracted by 4.5 per cent to 68.4 per cent compared to the same period of the previous year. 

“Subscription revenues for the quarter was up by around 4 per cent at Rs 319.77 crore, as against Rs 308.84 crores for the corresponding quarter ended March, 2018,” Sun TV Network said in a release. Advertising revenue growth for Q4 was flat, against most analysts expectations of a 5-7 per cent increase. 
Going forward, brokerages say that there might still be a transitory impact from the NTO. Delays in the planned launch of its new Marathi channel is also expected to impact performance.

“Efforts on forming a digital strategy are still ongoing and the company remains elusive in sharing any details. The delay on that front, along with rising competition with aggressive investments in regional content, remains a concern. NTO implementation is transitory and expected to impact revenue growth in the first half of FY20 as well..,” said an Emkay research note. ―New Indian Express