Reliance Broadcast on track to post profit in FY12

Reliance Broadcast Network (RBNL) is on track to post its first net profit next year with its radio and Out-Of-Home (OOH) verticals to be the maximum contributors to its total revenue, a top company official said.

"We are already EBITDA-positive and with the kind of growth we are seeing, we are on track to post a net profit in FY 12," RBNL's CEO, Tarun Katial, told PTI here.

The Anil Ambani group company, earlier known as Reliance Media World, has been EBITDA-positive for the last three quarters, he said.

The radio vertical, its strongest, has been growing robustly and presently enjoys a 21 per cent marketshare in terms of air-time. Besides, inventory utilisation -- the air-time utilisation by advertisers -- has risen to 64 per cent.

"We expect radio to be a dominant contributor to our total revenues going forward, at around 50 per cent," Katial said, adding "our aim now is to achieve a deeper penetration."

The company achieved a 7.4 per cent revenue growth in radio over Q4 FY 10 which Katial termed as "significant" as normally most media companies report a downswing in Q4 which seeps into Q1 of the next fiscal as well.
    
"However, we have recorded an encouraging growth and mainly on the back of advertisements from SMEs and the education segment from Tier II and III destinations," he said.

On Big Street, its OOH business, Katial said that it has acquired significant inventories on a long-term PPP basis.
   
"This business is turning out to be a good revenue-and-profit-generator," he said.
   
The company will face no funding problems when Phase III of radio-station auctions by the Government is held, he said.
   
"The Government is likely to come out with a framework for the Phase III auctions, most likely in the next quarter. We will study the policies and depending upon the opportunities available, fine-tune our investment requirements then," he said.
   
Much would depend on factors such as whether the Government would allow multiple frequencies in metros or fix a minimum of Tier II stations to be bid for, he added.
   
The company has an enabling resolution to increase its authorised share capital from Rs 100 crore to Rs 125 crore, for issue of preference shares up to Rs 500 crore, raise up to Rs 300 crore through a QIP and also to raise resources through issue of securities in international markets up to Rs 300 crore, he said.