Lacklustre market conditions pull down DB Corp’s revenue in Q2 FY2020

DB Corp Limited (DBCL), home to flagship newspapers – Dainik Bhaskar, Divya Bhaskar, Divya Marathi and Saurashtra Samachar – has reported total revenue of Rs 5,336 million in the second quarter ended September 30, 2019, a decline from Rs 5,874 million in Q2 of last fiscal. Advertising and circulation revenues, too, saw a fall in this quarter. 

Advertising Revenue for Q2 FY2020 stood at Rs 3,670 million, as against Rs 4,132 million in Q2 of last fiscal, while circulation revenue dipped to Rs 1,286 million from Rs 1,318 million in Q2 FY2019. 

EBIDTA was at Rs 1,006 million (margin of 19 per cent), against EBIDTA of Rs 977 million (margin of 17 per cent) after considering forex loss of Rs 17.9 million. 

Profit after tax (PAT) was reported at Rs 756 million (margin of 14 per cent) in Q2 FY2020, as against Rs 462 million (margin of 8 per cent), after considering forex loss of Rs 27.1 million and after application of new tax rates as per recent corporate tax rate change announcement. 

Radio business 

Advertising revenue for the group’s radio business stood at Rs 316 million, compared to Rs 377 million in Q2 FY2019. EBIDTA stood at Rs 69 million (margin of 22 per cent), as against Rs 120 million (margin of 32 per cent), while PAT came in at Rs 50 million (margin of 16 per cent), as against Rs 58 million (margin of 15 per cent). 

Sudhir Agarwal, Managing Director, DB Corp Ltd, attributed the group’s performance for Q2 and H1 FY2019-20 to the lacklustre market conditions primarily due to the economic slowdown, which resulted in weak demand and tepid consumer spending. 

He added, “While we, too, have witnessed the impact, our innovative product strategies and growth-led initiatives aided in not only maintaining market leadership in all our major markets, but also gaining share in newly forayed markets. Apart from the recently run ‘Circulation Expansion Drive’, our focus on extending the editorial philosophy of ‘Reader-centric’ to include ‘Knowledge and Ideation’ approach has delivered encouraging results, as also reflected in the recent survey data published by IRS and ABC.” 

While admitting that the first half of the fiscal had been challenging for the overall industry, Agarwal said, “Our continued focus on cost control measures, coupled with softening newsprint prices, helped in sustaining the overall profitability for the company. Further, the initial signs of festive demand are positive and we are cautiously optimistic about growth revival. We applaud the Central Government’s recent industry friendly announcements and hope for few more stimulus measures in the offing. These progressive steps towards reviving the economy are expected to provide the desired impetus to growth in the mid to long term. With all our fundamental growth drivers in place, we are well prepared to capitalise on the upcoming opportunities and would strive to enhance our performance.”