Network18 Media & Investments slipped 3.36% to Rs 63.25 after the media company reported a consolidated net loss of Rs 7.68 crore in Q3 FY23 as against a net profit of Rs 97.10 crore posted in Q3 FY22.
Revenue from operations was at Rs 1,850.49 crore in Q3 FY23, registering a growth of 11.65% as against Rs 1,657.43 crore recorded in the corresponding quarter a year ago.
Pre-tax loss stood at Rs 4.67 crore in Q3 FY23 as compared to pre-tax profit of Rs 353.82 crore posted in Q3 FY22.
Consolidated operating EBITDA slumped 100% year on year to Rs 2 crore in Q3 FY23 from Rs 373 crore registered in Q3 FY22. Operating EBITDA margin reduced to 0.1% in Q3 FY23 as compared to 22.5% reported in the same period last year.
Total expenses spiked 44.96% year on year to Rs 1939.01 in quarter ended 31 December 2022. Operational costs was at Rs 128.29 crore (up 61.38% YoY) and marketing, distribution and promotional expense stood at Rs 356.72 crore (up 28.54% YoY), during the quarter.
The company said that the continued softness in the macro-economic environment dampened the advertising demand and impacted the revenue, in contrast to the strong festive demand witnessed last year, thereby impacting the growth.
The media company stated that despite inflation showing signs of easing, economic sentiment remained weak during the quarter. While core categories continued to spend on advertising, driving growth was challenging due to restrained spends by brands across categories and a sharp pull-back by start-ups and e-com players.
Along with a weak advertising environment, TV impressions were also down 5% YoY. Total ad inventory on TV declined by 10% on a YoY basis with News category seeing a drop of 27%. Digital segment also faced headwinds as brands pulled back on performance marketing spends. As a result, ad revenue of all our segments declined on a YoY basis.
The drop in advertising revenue had a direct impact on margins as we continued with investments in content, with a view to consolidate our operating metrics. The profitability of the business also suffered due to investments in new initiatives, digital entertainment and sports, which had a negative contribution of approximately Rs 140 crore to EBITDA, Network18 stated in the press release.
TV News business revenue shed 8% YoY and the EBITDA margin was at 1.8% in Q3 FY23. The decrease in the revenue was primarily due to de-growth in advertising revenue. TV news ad inventory declined 27% at industry level due to the soft advertising demand as well as drop in the news genre share as a percentage of the total viewership pie. However, the impact of these factors on our network was lower as the events-led monetisation and viewership share continued to be strong.
The company's Entertainment business revenue grew 18% YoY and EBITDA margin was at 0.4% in Q3 FY23. The growth in revenue was primarily driven by movie and sports segments.
Network18's Digital News division revenue declined 2% YoY and EBITDA margin was at negative 8.6% during the period under review. Digital segment also faced advertising headwinds as brands pulled back on performance marketing campaigns in view of the subdued consumer demand. The network is ramping up its team across functions to increase editorial coverage and technology infrastructure, which contributed to more than two-thirds of the increase in operating costs.
Adil Zainulbhai, chairman of Network18, said, We are really pleased with the operating performance of our businesses, however, the tough macro environment made it challenging from the perspective of financial results. We have a firm belief in the long-term potential of India's M&E sector and we are making investments today to be in a position to derive disproportionate benefits from this growth, especially in digital. Our portfolio is ideally positioned to grow across multiple axes and take advantage of the synergies and strengths of its diversified assets.
Network18 Media & Investments (Network18 Group) is a diversified media and entertainment (M&E) conglomerates, with interests across television, digital content, filmed entertainment, e-commerce, print and allied businesses. TV18 Broadcast, a subsidiary of Network18, manages its primary business of broadcasting. It runs the largest news network in India, spanning business news general news, and regional news.
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