The company has adopted lnd AS 116, effective annual reporting period beginning April 1, 2019 and applied the standard to its leases, retrospectively, with the cumulative effect of initially applying the Standard, recognised on the date of initial application (April 1, 2019). Accordingly, the group has not restated comparative information, instead, the cumulative effect of initially applying this standard has been recognised as an adjustment to the opening balance of retained earnings as on April, 2019.

Quarterly performance

Consolidated sales for the quarter was lower by 9% to Rs 531.39 crore as both printing & publishing business as well as radio business register fall in revenue for the period. While the revenue of the printing & publishing was down by 8% to Rs 499.92 crore (or 94% of sales) that of radio was down by 16% to Rs 31.55 crore. Lower revenue for printing and publishing is largely as both advertisement as well as circulation revenue stand lower for the period. The advertisement revenue of print & publishing was down by 11% to Rs 367 crore that of circulation income was down by 2% to Rs 128.6 crore. The advertisement revenue of radio business was down by sharp 16% to Rs 31.6 crore.

However with OPM expand by 260 bps to 18.5% and thus the operating profit registered a growth of 7% to Rs 98.41 crore despite lower sales. Expansion in OPM seems largely due to softening of news print prices which reflected in lower material cost (as % of sales net of stocks) which was down by 410 bps to 36%. However the staff and OE has increased by 80 bps and 50 bps respective limiting the gain in material cost.

With OI stand lower by 59% to Rs 2.17 crore, the growth at PBIDT was restricted at 3% to Rs 100.58 crore. And with interest cost more than double (up 113%) to Rs 6.40 crore and depreciation up by 21% to Rs 30.30 crore, the PBT was dragged down by 8% to Rs 63.88 crore. With taxation (net of deferred tax) for the period being a write back of Rs 11.69 crore as against a provision of Rs 23.39 crore, the PAT jumped up by 64% to Rs 75.57 crore.

Half yearly performance

Consolidated sales for the period was down by 6% to Rs 1138.43 crore dragged down by 7% fall in printing and publishing business as the segment revenue of radio stayed flat (up 0%) to Rs 69.20 crore. While the advertising revenue of print and publishing was down by 7% to Rs 808.9 crore, the circulation revenue was down by 2% to Rs 260 crore However the advertising revenue of radio stood flat (up 0%) to Rs 69.3 crore.

Despite lower sales the operating profit was up by 5% to Rs 273.90 crore as OPM expand by 270 bps to 24.1%. After accounting for lower OI, higher interest and depreciation the PBT was down by 5% to Rs 207.83 crore. With taxation down by 48% to Rs 38.53 crore, the PAT was eventually higher by 18% to Rs 169.30 crore.

Management Comment

Sudhir Agarwal, Managing Director, DB Corp commenting on the performance of the company for Q2 & H1 FY 2019-20 said, ‘The market conditions have been lackluster primarily due to the economic slowdown resulting in weak demand and tepid consumer spending. 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. Further, within a short span of our launch in Bihar, we have emerged as the formidable No. 2 Newspaper in the State. With this operating philosophy of 'Regular Product Re-invention' being aggressively implemented across our Print, Radio and Digital segments, we look forward to exceling further in a rapidly evolving business environment. As mentioned earlier, the first half of the fiscal has been challenging for the overall industry; however, 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.'

To pay interim dividend of Rs 6.50 per equity share

The Board of Directors at its meeting held on October 16, 2019, has declared an interim dividend of Rs 6.50 per equity share of face value of Rs 10 each. The same would be paid to all eligible shareholders as on the record date declared by the company.