Shrinking ad budgets hit HT Media in Q1 FY19, net profit dives 86%
HT Media has reported a steep drop of 86 per cent in its Q1 FY2019 Profit After Tax (PAT) at Rs 6 crore from Rs 42 crore recorded in the corresponding quarter of the previous fiscal. Delayed advertising recovery on account of macro factors weighed on performance of the quarter.
The company saw a 7 per cent decline in its Q1 FY2019 revenues at Rs 542.3 crore, as against Rs 583.9 crore in Q1 FY2018. EBITDA fell 49 per cent to Rs 36 crore from Rs 70 crore in Q1 FY2018.
In the last quarter, that is, Q4 FY2018, HT Media had reported a significant rise in its consolidated net profit at Rs 75.04 crore for the quarter ended March 31, 2018.
Shobhana Bhartia, Chairperson and Editorial Director, HT Media Ltd and Hindustan Media Ventures Ltd, admitted that advertising budgets continued to shrink, affecting growth despite a favourable base effect. She added, “Our revenue growth was also hit by persisting macroeconomic challenges, although the impact of RERA and GST implementation are both waning, with businesses getting used to them. Our operating performance was also impacted by higher newsprint prices.”
During the quarter, low advertisement spend in the print business was seen owning to muted corporate earnings. Spike in newsprint rates also impacted operating margins. On the other hand, pick-up in local advertising was seen even as national advertising growth remained elusive.
Bhartia further said, “Amidst this, our radio business continued to grow in the double digits, and delivered yet another quarter of superior performance even as it improved its profitability. Our products are superior, brands strong and fundamentals of the business solid; but we do anticipate some short-term pressure on both growth and profitability.”