Hindustan Media Ventures posts smart increase in profit

Hindustan Media Ventures Ltd, home to the Hindi language publications of HT Media Ltd, reported a sharp increase in its profit thanks to a substantial fall in its newsprint costs.

The company’s net profit jumped to Rs 39.67 cr for the three months ended June, up from just Rs 13.20 cr in the same period last year and Rs 16.49 in the immediate preceding quarter.

This was despite a continuing decline in the company’s operating revenue, which fell to Rs 217.94 cr from Rs 226.56 cr last year. On a sequential basis, operating revenue was up from Rs 212.97 cr, partly because January-March tends to be a seasonally dull quarter for newspaper advertising revenue.

The biggest headline of the quarter was the sharp fall in the company’s material costs, which is almost entirely composed of newsprint costs.

Material related costs fell by Rs 24 cr to Rs 83 cr from Rs 107 cr a year ago and Rs 92 cr in the preceding three months, accounting for most of the Rs 31 cr increase seen in the company’s operating profit.

Operating profit increased to Rs 48.78 cr from Rs 18.26 cr a year ago and Rs 30.08 cr in the preceding three months.

The company managed to keep employee costs under control at Rs 28.22 cr versus Rs 28.19 cr a year ago and Rs 27.05 cr in the preceding quarter.

‘Other expenses’ too were under control at Rs 72.66 cr, down from Rs 84.66 cr in the preceding quarter, and flat on a year-on-year basis.

The numbers indicate that Hindustan Media Ventures, which publishes Hindustan daily, has started putting into practice measures intended to bring down its operating costs.

The company had earlier been maintaining that the declines seen in its profit were not part of a long-term trend, and had been holding out hopes of a recovery soon.

However, it is increasingly becoming clear that the print media segment of Indian media industry is in a slow, but steady decline.

The decline in the fortunes of print media companies is even more stark in the English language market, where consumers are taking even faster to social media and the internet to get their information, instead of relying of printed newspapers and magazines.