DB Corp hosted a conference call
on May 13, 2022. In the conference call the company was represented by Sudhir
Agarwal, Managing Director; Girish Agarwal, Director and Prasoon Kumar Pandey
Head – Investor & Media Relations.
Key takeaways of the call
Print Advertising Revenues of the
company have reached almost pre-Covid levels i.e. FY19 levels. The print advertisement
recovery was 95% in Q4FY22 (compared to 94.2% in Q4FY21) and that of Radio
advertisement was 93.1% in Q4FY22 (compared to 85.3% in Q4FY21). Undertaken advertisement rate hike effective
from April 1, 2022.
Circulation volume was down to
42.7 lakh copies per day in Q4FY22 down from 45 lakhs per day in Q4FY21. Some of households stopped subscription to
second newspapers and recovery of that is difficult in current inflation
scenario. However the company is making efforts to recover lost
circulation/copies to offices and railway stations with opening up of offices
and resumption of train services.
However 10-12% of circulation loss from pre covid peak is a permanent
loss and expect balance to be recovered over the period. The
recovery in print circulation revenue was 96% in Q4FY22 up from 92% in Q4FY21.
Continue to benefit from sustainable
cost control measures that the company undertook. The company has saved Rs 185
crore in print business in FY21 compared to FY20. Of that saving of Rs 185
crore substantial part was sustained in FY22 as well and that was about Rs 150
crore. And the company expect the saving to the extent of Rs 90-95 crore will
be sustained in FY23.
Barring automobile, Government
and Lifestyle all other categories are looking good. The dent in automobile,
government and lifestyle was about Rs 100 crore, Rs 90 crore and Rs 30 crore
respectively. The dent in advertisement
revenue from automobile is due to supply issues faced by 4w and 2w industry
once that is sorted out that will come back. The Government advt dent is
largely due to the issue the company haves with certain state government that
has put the advt on hold. Contribution
of Government to total advertisement revenue was about 14% in FY22. Jewellery, real estate, education and travel
are extremely doing well.
Advertisement in April 2022 has
seen very good growth. May 2022 and June 2022 are to be good as well. The education advt spend is now shifted from
April/May to June as board exams are pushed to May 2022.
High newsprint prices are
dampener. The newsprint price in April has
nearly jumped by over 35-40% Dec 2021 levels. The company had some prior contracts for news
print and thus the newsprint prices averaged at Rs 48000/tonne in Q4FY22. But the
current prices are north of Rs 60000/tonne.
However the domestic news print
prices are showing some signs of softening with increase in raw material
availability for paper industry. Going
news print prices to settle at normal in another few quarters.
Print business EBITDA margin was
26% for FY22 and expect to improve that going forward. The company expect the print
EBITDA margin in Q1FY23 will be weak considering sharp rise in RM cost due to increase
in newsprint price and expect to improve Q2FY23 onwards.
The company is not thinking of
geographical expansion.
Radio advt volume growth gained
in realty, lifestyle.
The company is well-placed to
forge newer milestones in the forthcoming quarters.