COVID impact: DB Corp reports operating loss of Rs 278 mn in Q1 FY2021

The results of the first quarter ended June 30, 2020 for DB Corp are indicative of the current disrupted business environment. The company reported operating loss of Rs 278 million in Q1 FY2021, as against profit of Rs 1,796 million (margin of 29%) in the corresponding quarter of the previous fiscal. DB Corp reported net loss of Rs 480 million, as against profit of Rs 937 million (margin of 15.3%).

Total revenue came in at Rs 2,157 million in Q1 FY2021, as against Rs 6,112 million in Q1 FY2020. Circulation revenue stood at Rs 928 million, compared to Rs 1,314 million, while advertising revenue stood at Rs 1,070 million as against Rs 4420 million.

Radio business

Advertising revenue in Q1 FY2021 stood at Rs 80 million, vis-a-vis Rs 377 million in Q1 FY2020. DB Corp’s radio reported operating loss of Rs 61 million this quarter versus profit of Rs 131 million (margin of 35%) in the corresponding quarter of last fiscal. Net loss stood at Rs 84 million, as against profit of Rs 52 million (margin of 14%).

The company now claims that both circulation and advertisement revenues have shown signs of gradual pick up on a month-on-month basis as lockdown restrictions are easing out in various states and the overall economy too is gradually getting back on track. In a release issued, DB Corp further stated that advertising performance is improving month on month. “In April 2020, we reached 19% of last year April performance, in May it improved to 20%, in June to 32% and in July, we have been able to achieve 53% of last year. Further, due to softer Newsprint rates and lower consumption along with strong cost controls measures, after witnessing an operating loss in April, which got substantially reduced in May, the month of June clocked a positive EBIDTA. The print EBIDTA margin further improved to around 20% in July 2020,” the release added.  

On the circulation front, the company claims that its efforts to educate readers through awareness campaign by experts paid off well. “Circulation copies increased to 76% by 30th June and to 78% per day by end of July, thus registering continuous pick up in circulation. Currently, circulation is 81% at overall level with key markets including Rajasthan, it has reached 84% of pre-COVID-18 level,” the release further stated.

Commenting on the performance for Q1 FY 2020-21, Sudhir Agarwal, Managing Director, DB Corp Ltd, said, “In what has proven to be an intractable business environment, we are thankful that the Dainik Bhaskar Group’s fundamentals continue to remain strong. Our company’s focus on implementing a centrally managed multi-pronged strategy to deal with the pandemic has ensured that our operations continued with minimal disruptions, while adhering to the Government’s guidelines for health and safety of our stakeholders. As India’s largest newspaper group, our employees and operations reacted with agility to the extraordinary challenges faced due to the widespread economic disruption and uncertainty.”

He further said, “Clearly, the pandemic has had an impact on our results in the quarter, but all of our efforts, including embarking on cost-cutting programs are intended not only to deal with the short-term needs, but also to ensure that the company is well-equipped to prosper in a decidedly different business environment. Economic activity in Tier 2 and 3 towns has already begun its path to normalcy and Dainik Bhaskar’s strong position in these markets will help quicken the pace of our return to pre-COVID-19 levels. We believe, worst is behind us and we are determined and working hard to recover the previous quarter’s operating losses within next quarter. With our strong legacy of execution excellence, well implemented cost rationalisation measures and editorial excellence, we are confident of seeing this challenge through and are hopeful that this will be reflected in our future performance when the impact of COVID-19 eases and resultant economy picks up.”