Business Scenario

The year has started with the concern over Economic growth as an impact of Global slowdown. Prime Minister’s Economic advisory council (EAC) chairman has said that the country’s economic growth may moderate to 7.5-8% in the current fiscal owing to domestic and external factors. The growth may again rise to 9% in the financial year 2009-10, if the monetary policy is prudently managed. Central Bank has taken measures such as increase in CRR and repo rate to control the inflation, which is in double digits at present. This will also slow down GDP growth.

Media & Entertainment Industry

The Indian Media & Entertainment industry is considered as higher growth achieving Industry. Newspaper publishing market is expected to reach Rs 243 billion in 2012 by exploiting huge potential in the industry. Within the newspaper publishing, advertising segment is projected to grow at a higher rate of 16% as compared with the circulation revenues of 8%. (Source: FICCI Frames 2008)

Management Analysis

During Q1, Revenues from Newsmedia segment has registered increase of 18% from Rs. 2,471 lakh to Rs. 2,921 lakh. The growth is on account of higher advertising revenues of all the publications. The increase is also complemented by increase in cover price in Mumbai Mid-Day.

The cost of printing has increased by 16% to Rs. 1,181 lakh in this quarter from Rs. 1,015 lakh for the quarter ended June 2007 on account of increase in newsprint prices and higher circulation level especially of editions outside Mumbai which are recent launches.

Other operating expenditure has remained same in line with last year.

As a result of the above, the gross profit is improved at Rs. 1,446 for the quarter ended June, 2008 lakh against Rs. 1,161 lakh for the quarter ended June, 2007.

General administrative expenses have gone up by 14% in the Q1 FY 2008-09 to Rs. 1,070 lakh from Rs. 942 lakh in Q1 FY 2007-08.

Selling and Distribution expenses have increased by 19% to Rs. 260 lakh mainly on account of higher circulations of the new editions.

Depreciation has decreased from Rs. 103 lakh in Q1 FY 2007-08 to Rs. 97 lakh in Q1 FY 2008-09.

Higher revenues from Newsmedia division have resulted in positive operating profit at Rs.20 lakh against loss of Rs 102 lakh in the corresponding quarter of earlier year.

Finance charges have increased by 48% to Rs. 57 lakh in Q1 of FY 2008-09 as compared to Rs. 38 lakh in Q1 of FY 2007-08. 

Other income has shown a loss of Rs. 26 lakh mainly on account of exchange loss on foreign currency loans and loss on account of treasury operations due to poor market condition as against wind fall gain of Rs. 203 lakh of last year.

As a result, the PAT has shown a loss of Rs. 89 lakh in Q1 of FY 2008-09 as against profit of Rs. 44 lakh in Q1 of FY 2007-08.

Group

The Group has recorded a top line of Rs. 3,584 lakh in the quarter under review as compared to Rs. 2,807 lakh in the corresponding quarter of the previous year FY 2007-08 registering a growth of 28%.

At a group level Gross profit is up by 40% from Rs. 1,536 in Q1 2007-08 to Rs. 2,144 in the Q1 2008-09.

The loss from Operating activities has shown a decline from Rs. 636 lakh in the Q1 of FY 2007-08 to Rs. 344 lakh in Q1 of FY 2008-09.

Profit after tax at a group level is Rs. 507 lakh as compared to a loss of Rs. 524 lakh in the corresponding quarter of the previous year FY 2007-08.

Radio

The radio top line posted a rise of 81% in Q1 FY 2008-09 and reached to Rs. 663 Lakh against Rs. 366 lakh in corresponding quarter of the previous year 2007-08.

The loss after Tax is lower at Rs. 416 lakh for Q1 of FY 2008-09 as against loss of Rs. 568 lakh reported for the corresponding quarter in FY 2007-08.

Milestones Achieved

Key milestones we achieved are:

• Radio revenues are up by 81%
• Print revenues are up by 18%
• Pune radio station operationalised in this quarter.

Looking Forward

The Indian media sector has developed necessary resilience to maintain momentum to register double digit growth in future inspite of global slowdown. We have successfully created MiD DAY as a national brand and the company is poised to record higher growth in the coming time.