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Entertainment Network (India) (ENIL), the leader in radio broadcasting operating through the brand Radio Mirchi, reported 40% growth in operating revenues at Rs 63.17 crore on standalone basis for the quarter ended March 31, 2008. The number of stations increased to 32 against 10 in the corresponding quarter previous year and 29 in the sequential quarter. OPM improved 40bps at 29.5%. On the back of higher depreciation & amortization on starting of new stations, the net profit dipped 32% at Rs 7.09 crore.
On consolidated basis, for the quarter, ENIL reported operating revenues of Rs 123.32 crore with radio business contributing Rs 63.17 crore, Out of home contributing Rs 46 crore with EBITDA loss of Rs 2.8 crore and event management contributing Rs 14 crore with EBITDA of 5%. The consolidated net profit was Rs 3.59 crore. For FY08, the consolidated net sales were up 76% at Rs 413.47 crore with radio business contributing Rs 225.22 crore with EBITDA of Rs 35.49 crore whereas OOH business had revenues of Rs 134 crore with EBITDA loss of Rs 21.9 crore and Event Management had revenues of Rs 60 crore with EBITDA break even. The loss at consolidated bottomline level was Rs 17.09 crore against profit of Rs 25.14 crore in the previous year.
During the year, the Company launched stations at Patna, Jalandhar, Panaji, Bhopal, Vadodara, Rajkot, Kanpur, Nashik, Varanasi, Aurangabad, Lucknow, Surat, Kolhapur, Madurai, Nagpur, Visakhapatnam, Coimbatore, Mangalore, Vijayawada, Raipur, Jabalpur and Thiruvananthapuram. At the end of FY08, the Company had 32 operating Radio Stations.
Alternate Brand Solutions (ABSL), subsidiary of the Company, has taken over the Event Management division of TIM with effect from December 31, 2007 for a consideration of Rs. 7 crore.
The Company has subscribed to 2.8 crore Equity shares of Rs 10 each of Times Innovative Media (TIM) aggregating Rs 28 crore during the quarter ended March 31, 2008. With this investment, the Company's aggregate investment in the equity shares of TIM is Rs 32 crore. Further, TIM has issued 3,174,604 equity shares each to GS Strategic Investments Limited and LB India Holdings Mauritius II Limited at a price of Rs 315 per equity share of Rs. 10 each on January 23, 2008.
During the quarter, TIM won several prestigious outdoor advertising contracts viz. pole kiosks and BRT bus shelters at New Delhi, Unipoles at Jaipur and bus shelters at Bangalore, Hyderabad & Chandigarh.
During the year, the Company has issued 71,485 Equity Shares of face value of Rs 10 each pursuant to the exercise of Employee Stock Options granted to the employees.
Quarterly Analysis (Standalone)
For the quarter ended March 2008, ENIL reported 40% growth in operating revenues at Rs 63.17 crore. The number of stations increased to 32 stations against 10 stations in the corresponding quarter previous year.
OPM improved 40bps at 29.5% on the back of sale of event management business to subsidiary. As a of net sales, license fees increased 20bps at 5.4%, other expenditure increased 580bps at 23.9% and production expenses was up 380bps at 8% whereas employee cost decreased 640bps at 19.2% and marketing expenses dipped 380bps at 14%. The resultant operating profits increased 41% at Rs 18.64 crore.
Other income for the quarter was up at Rs 3.72 crore against Rs 13 lakh in the corresponding quarter previous year. Interest cost (net) was at Rs 4.65 crore against Rs 11 lakh in the corresponding quarter previous year. Depreciation & amortization increased 117% at Rs 10.30 crore on the back of rise in amortization of 70% at Rs 5.33 crore and 204% increase in depreciation at Rs 4.97 crore. The resultant PBT dipped 12% at Rs 7.40 crore. Tax provision including FBT and deferred tax was of Rs 31 lakh against credit of Rs 2 crore in the corresponding quarter previous year. The resultant PAT dipped 32% at Rs 7.09 crore.
FY08 Performance (Standalone)
For the year ended March 2008, ENIL reported 35% growth in operating revenues at Rs 225.22 crore. The number of stations increased to 32 stations from 10 stations in the previous year. OPM dipped 360bps at 23.2%. As a % of operating revenues, marketing expenses decreased 220bps at 20.8% whereas production expenses increased 240bps at 6.6%, other expenditure increased 300bps at 22.4%, license fees up 20bps at 5.3% and employee costs increased 20bps at 21.6%. The resultant operating profit was up 17% at Rs 52.29 crore.
Other Income surged 421% at Rs 4.17 crore, which includes sale of shares of TIM and interest cost (net) was Rs 8.02 crore against income of Rs 11 lakh in the previous year. Depreciation & amortization charge increased 79% at Rs 32.11 crore. PBT for the year slumped 41% at Rs 16.33 crore on the back of higher license fees amortization. Tax provision including FBT and deferred tax was at Rs 14 lakh against tax credit of Rs 1.30 crore in the previous year. PAT dipped 44% at Rs 16.19 crore.
Management Comments
Commenting on the performance of the company Mr A P Parigi, Managing Director, ENIL said,
"With the completion of the rollout in our radio business this quarter, we have crossed a significant milestone. The early results from the investments in the new stations are very encouraging. We believe our other growth engines viz. outdoor advertising business and event management business are also in an exciting phase."
Commenting on the performance of the company Mr Prashant Panday, CEO, ENIL said,
"What is heartening to note is that Mirchi as a brand remains very strong and continues to command close to a 46%-48% share of the private FM market – this is testimony to the strength of the brand"
Valuation
The shares of the company are trading at Rs 406 on the bourses with OOH subsidiary valued at Rs 211.50 per share as per the sale deal.
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