CONFERENCE CALL - from Capital Markets
Entertainment Network (India)
Future growth largely driven by price hike
Entertainment Network (India) (ENIL) held a conference call to discuss quarter ended December 2015 result and future prospects of the Company.
Highlights of the call
Revenues grew 23% to Rs 143.6 crore. Out of 23% growth, 16.9% growth came from pricing and rest from volume. EBITDA grew by 12% to Rs 49.7 crore, though underlying EBITDA growth was 17.4%. Net Profit stood at Rs 27.0 crores
Entire media sector benefited from good festive season.
Non radio business did well.
EBDITA growth was impacted due to expenses related to phase 3 and prior period expense on change in bonus act. Also, Non radio business margin are lower, as such EBIDTA was little bit impacted..
Reduction in treasury income impacted bottom-line. Tax was high due to reduction in treasury income, which has tax benefits.
From Q1 FY17 till Q4 FY17- phase 3 radio stations will start.
Radio Mirchi with Delhi International Airport (P) Limited (DIAL) has recently launched ‘Mirchi T3' radio at Terminal 3 of Delhi Airport. With Mirchi T3, Radio Mirchi looks to cater to the niche group of premium listeners who frequent India's premier airport.
Mirchi Music award – expects to generate as much margin as other business doing. The mgmt expects overall margin to grow going forward.
The mgmt said that going forward it expects revenue opportunities to be strong as it will be operating in biggest markets. Top 13 markets have 75% of radio opportunity.
In Kerala and North, its entry will help market to expand. However, present players may see some share erosion, but there revenue will be intact as market will expand.
Increase in brand spend and higher activation resulted in increase in marketing expenses QoQ.
Core radio business has grown by 13.5- 14%.
The gross realization for the company is in the region of about Rs 10240.
Night band – 10 pm to 1 am has now come on sale. It is at 40% inventory now. Even inventory available on Sunday.
The mgmt said that its future growth will largely driven by price.
The company has now reached to advertisers for 4 stations acquired from Oye FM.
The mgmt said that it will see steep investment in marketing for its new stations.
Gross debt is around Rs 289 crore and cash and cash equivalent of Rs 195.6 crore
The blended inventory utilization level was at 111%. Utilization in top 8 stations was at 138%, while for remaining 28 stations it was 102%.
At end of FY18 – new station expected to see break even at EBIDTA level. Expects margin improvement in FY18 on new stations also.
Biggest sectors spenders were FMCG (17% of total advertisement revenue), e-comm (at 10%) , media, government, Auto and BFSI (7.5%), below it were services, apparel and political advertisers
e-comm is fastest growing sector follow by Govt. and auto.
The mgmt expects fall in e-comm advertisement revenue in H2 FY17. It expects uptick from telecom sector due to 4% and consumer durable. Auto is also expected to maintain its momentum.
Expects radio industry to grow at 18% CAGR for next 4-5 yrs.