- Subdued Revenue and EBITDA in spite of festival season.
- There was also a high base of Bihar Elections in the last quarter.
- Demonetization has impacted the company adversely.
- Circulation Revenue rose due to higher realisation per copy.
- There is an ongoing group level cost cutting initiative and the benefits of which will begin from next financial year
- In December, there will be higherpoliticalspendingdue to election
- Net Cash in the books is around 750-760 crores. Board to decide on the possible uses of cash. No Time Frame
- Mutual Fund income of the company is taxed at a lower rate.
Impact of Demonetization
- Up to 8th November, there was good growth and the company was confident of posting double digit revenue growth
- Due to demonetization the situation changed and November Month was bad
- UP was strong in demonetization as compared to other areas
- December was flattish YOY
- Impact of Demonetization can last one more quarter
- The advertising budgets of many companies have been reduced
- Some sectors like BFSI, Auto came back immediately after demonetizati on. Government Advertising was also good (for educating about demonetizat ion). However, other sectors are yet to come back
- Some of the impact of demonetization in Q4 would be offset by political revenue
- Q3 saw the worst impact of demonetization
- November volume for the entire industry was bad
Digital Business Subsidiary
- Digital company will make multimedia content
- HMVL's stake is of 42% and the company has paid 75 crores for that.
- Valuation done by an independent valuer.
- Approved by Creditors, Shareholders and Court.
- Some of the employee cost has been transferred to HT DSL. There is a rise in other expenses due to some payments made to them.
- Another team will work towards monetising digital platforms in HT DSL.
- The impact of HT DSL charges will get minimised going forward
- Entire Scheme is available on the company website
- Impact of Subsidiary in Q3FY17
- In this quarter there is an impact of around 11.5 crores which have been charged to the company by HT DSL.
- This is the impact of 3 quarters.
- There has been a reduction in employee cost which is transferred to HT DSL.
- HT DSL as per the approved merger documents charges 8% of Ad and Circulation revenue.
- Consolidated numbers including the revenue of the subsidiary company would be available at year end.
- Government Advertising is around 13-14% of total revenue share.
- In Q3, Government Advertising as a percentage of total advertising was higher as other categories were weak.
- Volume of Imported newsprint paper bought by the company has gone up due to price benefits.
- Currently the company is shifting to more proportion of domestic buying as the price gap has narrowed.
- Service charge is paid to a related party on value of imported newsprint prices. It depends on the value of imported newsprints.
Cost Cutting Program
- The cost cutting initiatives are on Manpower and Overheads
- Impact should be visible from next financial year.
- Normal Capex for maintenance to be incurred
- Capex in first 9 months around 6-7 crores
- In Current FY there are no plans for any new state