Hindustan Media Ventures Concall Summary Q3FY17

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Performance Highlights

HMVL Q3FY17 Financials
  • 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

  • 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.

Imported Newsprint

  • 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.

Capex Plans

  • 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