Continuing the theme of TV news companies defying the trend of the COVID-19 pandemic pushing media firms into losses, NDTV reported a profitable quarter for the Apr-Jun period and said it has reversed the pay-cuts installed for most of its employees.
This follows rival TV Today also bucking the trend and reporting a profit of Rs 12.8 cr for the lock-down quarter.
NDTV has traditionally been seen as a financial vulnerable company due to some miscalculated bets on diversification from dating back more than a decade. However, it has aggressively shed weight over the last four years to emerge smaller, but largely profitable.
Nevertheless, the company’s liabilities still exceed its assets by Rs 79.35 cr.
In a note to its accounts, the company did flag that its ability to continue as a going concern depends on “meeting its short-term and long-term working capital requirements, ability to pay overdue payables, the management’s implementation of initiatives like rationalizing costs, initiatives to improve advertising revenue which are under pressure, negotiating extended credit terms with suppliers and lenders, sale/divestment of non-core businesses and building efficiencies in collections.”
However, “based on current business plans and projections prepared by the management, New Delhi Television Ltd expects improvement in operations with better operational efficiencies.. the management, based on their understanding of the overall business and the planned strategies, believes that the company will be able to meet its contractual obligations and liabilities that fall due in the near future,” it said.
While it did remain profitable, NDTV was far from immune to the negative impact of the COVID-19 pandemic and the resulting lock-downs.
Revenue from the company’s television and related operations fell by 21% compared to the Jan-Mar period and by 33% compared to the same three months of 2019.
TV revenues fell to Rs 72.73 cr for the latest three-month period, while e-commerce revenues were zero during the quarter, compared to Rs 1.45 cr in the Jan-Mar period and Rs 1.65 cr in the year-ago period.
Overall revenue fell by Rs 28 cr to Rs 74.02 cr on a sequential basis, but the company was able to cut its business-related expenses by a whopping Rs 25 cr to Rs 64.64 cr during the period, preventing a swing into the red zone.
“The Group would like to acknowledge the loyalty and commitment of those employees who took pay cuts for Q1 (the majority of employees have seen these cuts reversed as of August 1; the management and other senior employees continue to work with reduced salaries,” it said.
The company reduced its production expenses during the three-month period by 44% or Rs 8.8 cr, employee expenses by 24% or Rs 7.1 cr and operating and administrative expenses by 33% or Rs 6.8 cr.
As a result, it posted net profit of Rs 7.55 cr, down from Rs 9.20 cr in the March quarter and Rs 16.66 cr in the year-ago period.
“The NDTV Group is recording a profitable Q1 despite the widely-reported impact of the coronavirus pandemic on businesses in India and the media sector in particular,” it said in its commentary on the results.
The company has reduced its liabilities (including bank borrowings) by Rs 95 crores in the last two years, it added.
With this, NDTV’s main business, TV broadcasting, has reported profits in eight out of the last nine quarters, while the online business was able to retain its EBITDA (operating profit) level at 23% during the quarter despite the pandemic.