Network18 reports 50% growth on Q1FY22 revenues; EBITDA margin at 15%

Network18 Media & Investments Ltd has reported Consolidated Operating Revenue of Rs 1,214 crore for the first quarter ended June 30, 2021, a growth of 50% over Rs 807 crore recorded in Q1 FY2021. Consolidated EBITDA was up ~6x YoY (and ~3x vs Q1FY20); while operating margin clocked 15.5%.

Operating margin at ~15.5% was the highest ever in the first quarter despite the impact of COVID-19 second wave. Entertainment margin was a healthy ~17%; ex-film revenue was up 63% YoY (up 5% vs Q1FY20). News margin was reported at 15%; revenue was up 17% YoY (near-flat vs Q1FY20 basis ex-election advertising). Digital News maintained its break-even; revenue rose 89% YoY (up 44% vs Q1FY20).

As per ComScore, Network18 Digital’s reach expanded to ~49% of India’s Internet population.

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Domestic ad-revenue was much higher YoY due to first wave impact being significantly greater. Entertainment advertising was impacted by the second wave, as ad-demand dipped in May-early June due to lockdowns. However, original content production and telecasts were continued by tackling lockdown-driven logistical challenges through bio-bubbles, shifting shooting locations, and other innovative/ agile solutions. On the back of a full roster of its content, Network18’s portfolio was able to re-scale ad-revenue to the same levels as in Q1FY20 (which was not impacted by COVID-19 in any manner).

TV News advertising remained resilient despite the second wave, led by a rise in news consumption and digital events replacing physical ones. As a result, TV News ad revenue remained in growth territory vis-a-vis Q1FY20, adjusted for election-linked advertising. Digital News was minimally impacted by the second wave. Growing salience of the medium for advertisers as well as consumers (especially during COVID peaks) supported revenue.

Subscription revenue grew 4% YoY; subscription remains growing and resilient to COVID. Domestic subscription revenue continued to grow led by expanded tie-ups in TV and Digital (both B2B and B2C). International subscription remains under stress. While Digital is rising fast off a low base, TV remained resilient and in growth territory. Domestic TV subscription dynamics remain in flux due to the proposed new tariff order (NTO 2.0).

Commenting on the Q1FY2022 performance, Adil Zainulbhai, Chairman, Network18, said, “The second wave of COVID-19 could have been the dominant theme for the industry and indeed for us during the quarter...but it wasn’t. Led by the many learnings from the past year and a responsibility to serve the Indian audience, we have been able to continue our businesses relentlessly and profitably. While advertising hit a speedbreaker (primarily in entertainment), growing engagement on our platforms across TV and Digital make us confident of delivering for all our stakeholders even amidst a choppy environment. We continue to invest to ramp up offerings on our class-leading digital platforms, as their reach expands to highest ever levels. At the same time, we are selectively creating segmented offerings to enhance our TV portfolio in a capital-efficient manner.”