Revenues are close to 75% of pre-coronavirus levels, says Sun TV

Kalanithi Maran owned-Sun TV, a media conglomerate said that revenues are close to 75 per cent of the pre-COVID levels. If things stabilise and if the market really opens up, overall decline could be restricted to 15-20 per cent. Meanwhile, the company guided around Rs 250 crore capex towards digital, creating content to drive subscription revenue and on movies.

Speaking to investors, S L Narayanan, Group CFO, Sun TV Network said, capex depends on how quickly the theaters restart. If it is going to go late into Q3 or early Q4, then possibly, it should be in the range of Rs 225-250 crore.

V C Unnikrishnan, CFO, Sun TV added generally on production the company spend about Rs 100 crore at lower rate and it could move up to Rs 250 crore in a fiscal on the movie production. To buy satellite rights, it would range around Rs 300-400 crore. But this year, it will be muted because of lack of release of movies, delay in the releases.

Narayanan added investment in exclusive content for its OTT platform Sun NXT will be around Rs 100 crore.

"When things return to normal, these investments will be much higher because we are making that kind of money today in our streaming business. The intent was always to make it a profitable enterprise and not splurge money just for the sake of putting out a number. We are taking a relook at the entire annual business plan because nobody anticipated the whole thing will go out of gear like this. I think this number will be going up in terms of an annualised spend," he added.

Net cash rose to Rs 3,000 crore in June from about Rs 2,800 crore in March. PAT grew by 13 per cent between March and June despite Covid-19 impact.

On the revenue, he said, “if you look at July and the fill levels in August are pretty encouraging. I think we can just say approximately, we are close to 75% of the pre-COVID levels in terms of the revenues. So if things stabilise and if the market really opens up, we are very confident of what we have committed to you, that I think in terms of overall decline, it could be restricted to 15-20 per cent."

In some of the markets, especially Tamil Nadu, the retail segment has not really opened up, which is a significant contributor to the revenue. FMCG continues to be a significant contributor in terms of the overall revenue factor at around 55 per cent.

Subscription revenue in Q1 grew by 18 per cent to Rs.442.25 crore from Rs.375.95 crore, a year ago. “It is really going to be the saving grace for this year,” said Narayanan adding that Sun will continue to invest in content to increase the subscription revenues at a very high level. There is substantial headroom to raise prices in the subscription business.

No plans to divest or list IPL, says Sun TV.

Sun TV which owns IPL team SunRisers Hyderabad said it is not planning to list or divest stake in SunRisers.

"We don't see any need to do this because at the end of the day, we have to do all this to -- only if you need money. Right now, we don't need any money, and this is something which we have created by investing at the right time at the right price. So it will only become more and more valuable," said S L Narayanan, Group CFO, Sun TV Network adding that this is a jewel which is sitting inside Sun TV network, we'd rather keep it there.

He noted, in the last five years it made a turnaround, and it's now clocking around Rs 150-200 crores in pretax profits.

In the normal course, the IPL business would have reported at least Rs 150-160 crore PBT for this quarter. Unfortunately, that couldn't be realised because of the pandemic situation. There is some hope that will make some money for the financial year, if not the quarter, it will possibly follow partly in the September quarter and largely in the December quarter.