CONFERENCE CALL - from Capital Markets
On digital side the company hopes to reduce its losses by at least 50% in FY 2017
HT Media held its conference call on 27th May 2016 to discuss its results for the period ended March 2016.
Rajiv Verma CEO and Vinay Mittal CFO of the company addressed the call.
Highlights of the call:
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For the quarter ended march 2016, HT media registered 11% rise in consolidated sales to Rs 630.95 crore.
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Advertising revenues grew 8.5% to Rs 496.70 crore primarily due to increase in advertising volumes as well as yields.
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PAT grew 1% to Rs 49.68 crore. Minority interest grew 20% to Rs 12.06 crore after which net profit fell 4% to Rs 37.62 crore.
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The Hindi business outperformed the market and it witnessed the return of growth in the English business.
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Its new businesses are doing well.
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HT Mumbai has established itself as a clear alternative in India’s commercial capital.
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It launched Radio Nasha 107.2 in Delhi, becoming the only radio business in the region with two stations.
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Its digital business showed significant revenue growth and has reduced its losses.
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This year is rich with opportunities to expand reach and offerings. The management believes it is well placed to tap these and that its innovative strategies, prudent and timely investments, and world-class execution will continue to differentiate it from the competition.
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In FY 2016 advertising revenue grew 7.5%.
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Circulation Revenues grew by 5.6% in FY 2016.
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The company has strong balance sheet position with Net Cash of Rs 890.7 crore.
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The company saw 35% increase in revenue from Digital segment to Rs. 140.3 crore in FY 2016.
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Shine.com registered revenue growth of 29% in FY16.
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HT Mobile registered a revenue growth of 63% in FY16.
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Radio business progressing at a steady pace
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It saw 17.7% increase in revenue to Rs 117.0 crore in FY16 driven by advertising revenue growth as well as Chennai launch.
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EBITDA was down 11.6% to Rs 40.5 crore due to Chennai launch.
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During FY 2016 EBITDA grew primarily due to increase in topline and decline in raw material costs by 2.6%. However this was partially offset by 15% increase in employee costs to Rs 556.0 crore on account of new hiring and increments impact.
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PAT fell primarily as higher EBITDA was more than off-set by higher interest costs on Radio related borrowings and higher tax charge.
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Going forward the company plans to operationalize new Radio stations acquired in Phase-III auctions.
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It will also strive to improve profitability of Digital segment by focusing on growing revenue exponentially.
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It may leverage the strong balance sheet which has net cash of Rs 890.7 crore, to fund expansion.
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Good results despite drought like situation in some parts of India. With good monsoon there would be pick up in the economy from second half of FY 2017. The company is well placed to avail of the situation.
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With good monsoon, advertisement will increase.
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Cumulative advertisement growth in English for the quarter was close to 1.4%.
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The company had a part if legal expenses for historical legal stuff which all came in Q4.
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Thus other expenses should normalize in FY 2017.
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As economic picks up, operation leverage will come and even sales will also grow faster.
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On digital side the company hopes to reduce its losses by at least 50% in FY 2017.
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Consolidated other income should be around Rs 200 crore in FY 2017.
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Tax rate should be in the range of 26-28% in FY 2017.
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Advertisement from FMCG was 11%, Auto was 9%, and Education was 8%.
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Real Estate was laggard.
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In UP EBITDA margins is close to 15% and market share is close to 25-27%. 25-27% is a matured market margins which should be same for roughly 3 years.
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Advertisement for equity was Rs 370 crore.
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Capex for FY 2017 would be Rs 70-80 crore.
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80% of growth was volume driven in FY 2016.
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Top line growth can come only if economy grows. So if monsoon is good, u can expect good sales growth.
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As green shoots are visible in the economy, things should improve for the company from second half onwards.