DB Corp reports Covid impact on revenues; Q4 FY20 PAT down at Rs 241 mn

DB Corp Ltd, home to flagship newspapers – Dainik Bhaskar, Divya Bhaskar, Divya Marathi and Saurashtra Samachar – has seen some impact on revenues due to the COVID-19 outbreak towards the end of Q4 FY20 and continuing in Q1 FY21.

For the fourth quarter ended March 31, 2020, DB Corp reported profit after tax (PAT) of Rs 241 million (margin of 5%) as against Rs. 545 million (margin of 9.2%) in Q4 FY19 after considering forex loss of Rs. 80 million.

EBIDTA came in at Rs 690 million (margin of 14%) as against Rs 1,067 million (margin of 18%), after considering forex loss of Rs. 66 million.

Circulation revenue for Q4 FY20 stood at Rs 1,200 million as against Rs 1,273 million, while advertising revenue stood at Rs 3,303 million as against Rs 4,130 million. Total revenue in Q4 FY20 came in at Rs 4,898 million as against Rs 5,911 million in the corresponding period of the previous fiscal.

Radio business

DB Corp’s radio business reported advertising revenue of Rs 326 million in Q4 FY20 versus Rs 390 million. EBIDTA for the quarter stood at Rs 96 million (margin of 30%) versus Rs. 132 million (margin of 34%). PAT was reported at Rs 35 million (margin of 11%) versus Rs 63 million (margin of 16%) in Q4 FY19.  

Commenting on the performance for Q4 and FY 2019-20, Sudhir Agarwal, Managing Director, DB Corp, admitted, “The Fiscal 2020 was unprecedented in many aspects with the industry facing headwinds on the back of weak consumer demand followed by the covid-19 pandemic which caused further challenges. The nation-wide lockdown led by the outbreak of covid-19, caused an immediate disruption to businesses, impacting revenues towards the end of Q4FY20 and continuing in Q1FY21. However, Group’s hard work over the years has ensured that our financial and market position remain strong to withstand such challenging times.”

He further said, “Going forward, as we expect opening of the economy over the coming weeks, we remain optimistic of an up-tick in advertising spends by companies looking to woo the consumers back, especially for our key markets which represents the non-metros, semi-urban and rural, Tier 2, 3 and 4 markets, where economic activity is expected to resume sooner.”

Performance highlights for FY2020 – Consolidated [All Comparisons with FY2019]

PAT reported a growth of 0.4% YOY to Rs 2,750 million (margin of 12.3%) as against Rs 2,738 million (margin of 11%), after considering forex loss of Rs 116 million.

EBIDTA came in at Rs 4,940 million (margin of 22%) as against Rs 5,209 million (margin of 21%), after considering forex loss of Rs. 86 million.

The operating profit margin expansion has been aided by softened newsprint prices at Rs 38,840 PMT in FY2020, down 11% YOY. The other cost efficiency measures are continuing to yield results.

Total revenue came in at Rs 22,363 million as against Rs 24,794 million. Circulation revenue stood at Rs 5,122 million as against Rs 5,237 million. Advertising revenue stood at Rs 15,640 million as against Rs 17,625 million.

Radio Business

Radio business PAT was down at Rs 198 million (margin of 14%) compared to Rs 260 million (margin 17%). Advertising revenue stood at Rs 1,391 million versus Rs 1,549 million. EBIDTA was reported at Rs 431 million (margin of 31%) versus Rs 525 million (margin of 34%).

Key Developments and Initiatives

In a release issued, DB Corp stated that notwithstanding the challenging business environment, “Dainik Bhaskar has demonstrated remarkable resilience by consistently yielding results on the back of its reader-centric approach for product enrichment and a well implemented circulation expansion strategy”.

• The unprecedented situation of a nation-wide lockdown, arising due to the outbreak of the COVID-19 pandemic had an immediate, but short-lived impact on circulation. The wide distribution network and reach built by Dainik Bhaskar over the years, aided in bringing back the circulation to near normalcy levels. Further, ability to maintain the cover price in a reduced pagination scenario helped in reducing the per copy loss, during this challenging period
• With regards to Advertising revenue, Dainik Bhaskar’s approach of hand-holding clients in the short run has yielded results. While April witnessed only a few ads for those in essential products, there has been some pick-up from May onwards from sectors like Government, Education, Automobiles, Consumer Durables and FMCG
• Dainik Bhaskar featured as the only Indian newspaper in the World’s Top 3 Most Circulated Newspapers, as per WAN IFRA (World Association of Newspapers and News Publishers). The other two newspapers are The Yomiuri Shimbun and The Asahi Shimbun from Japan with 8.1 and 5.6 million copies respectively, with Dainik Bhaskar at 4.3 million copies

As per recent IRS 2019 Q4 survey, Dainik Bhaskar Group has become the largest newspaper group of India (excluding financial dailies) Source: IRS 2019 Q4 AIR (U+R) (Main +  Variant)