Release Date: July 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The company maintained a robust net cash position of INR858 crore.
- Digital business saw a considerable upside in revenue on a YoY and QoQ basis.
- Operational efficiency and cost management efforts helped mitigate the impact on profitability.
- Radio segment posted growth in revenue over the previous year.
- The company has a strong market presence across media platforms and robust liquidity position.
Negative Points
- Overall revenue declined by 4% compared to the same period last year.
- Print advertising and circulation revenue saw a measured decline, affecting profitability.
- EBITDA margin was low at 2%, with EBITDA at INR7 crore.
- PBT came in at a negative INR36 crore.
- Government advertising volumes were impacted due to national elections and the enforcement of the model code of conduct.
Q & A Highlights
Q: D B Corp has reported significant profits and increased advertisement revenue. Given the sector's performance, what are your thoughts on the company's declining net worth and future outlook?
A: Piyush Gupta, Group CFO: We are focusing on creating sustainable long-term value through investments in new businesses like OTT. While our print business faces competitive challenges, we are not in a distress situation. Our balance sheet remains adequately capitalized, and we are optimistic about our strategic initiatives.
Q: Can you clarify the revenue recognition for OTT subscriptions?
A: Anna Abraham, CFO: Revenue from OTT subscriptions is recognized on a pro-rata basis. For example, a one-year subscription of INR1,000 would reflect INR250 in the current quarter.
Q: How did the elections impact your ad revenue this quarter?
A: Piyush Gupta, Group CFO: The model code of conduct during elections halted government ad revenue, and unlike previous years, political ad revenue did not compensate for this loss. This led to a net negative impact on our ad revenue for the quarter.
Q: What steps are being taken to improve ad revenue and break the cycle of low revenues and operating losses?
A: Piyush Gupta, Group CFO: We are aggressively working on improving ad pricing. While volumes are back, pricing remains under pressure. We have seen early success in the first quarter and expect better performance in the coming quarters.
Q: Can the technology behind your OTT play be out-licensed to other countries?
A: Piyush Gupta, Group CFO: While the technology can be out-licensed, the content rights are restricted to India. Therefore, we cannot air this content outside the Republic of India.
Q: What is the current trajectory of newsprint costs, and how do you expect it to impact future quarters?
A: Anna Abraham, CFO: Newsprint costs are currently around INR48,000 per metric ton. We expect slight increases due to global supply chain disruptions but do not anticipate major shifts in the next quarter.
Q: What is the contribution of government ads to your overall ad revenue?
A: Anna Abraham, CFO: Government ads contribute about 20-25% to our overall ad revenue. This percentage was higher in the fourth quarter due to the run-up to the elections and lower in the first quarter due to the model code of conduct.
Q: When do you expect the digital business, particularly the OTT segment, to break even?
A: Anna Abraham, CFO: The OTT segment is still in its early stages, and we do not expect it to be profitable this year. However, losses have significantly reduced compared to last year, and we are optimistic about future scalability.
Q: Are there any updates on NOTIF guidelines for the radio segment?
A: Piyush Gupta, Group CFO: We are working with the industry to make representations to the ministry. While we are hopeful for a positive outcome, there are no updates at this time.
Q: What level of newsprint inventory do you hold?
A: Piyush Gupta, Group CFO: We typically hold newsprint inventory for a period of three to four months.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
