Network18 Media & Investments dropped 5.36% to Rs 66.20 after the media company reported consolidated net loss of Rs 36.49 crore in Q2 September 2022 as against net profit of Rs 39.02 crore in Q2 September 2021.
On a consolidated basis, net sales rose 11.65% to Rs 1548.89 crore in Q2 September 2022 over Q2 September 2021.Pre-tax loss stood at Rs 28.01 crore in Q2 September 2022 as against pre-tax profit of Rs 202.49 crore in Q2 September 2021. Operating EBITDA dropped 87% year-on-year to Rs 32 crore in Q2 September 2022.
Total expenses were at Rs 1,592 crore, up 33.88% in Q2 FY23 as against Rs 1,189 crore in a year ago period.
The company said that the revenue growth continued to be impeded by macro factors, impacting profitability. Economic sentiment remained weak during the quarter with high inflation posing challenge for companies, especially the FMCG sector. Brands held back advertising spends on new product launches and sustenance campaigns due to these headwinds. Advertising spends by start-ups and e-com players also declined due to the difficult fund-raising environment.
Total TV ad inventory declined by 3% on a YoY basis with News category seeing a drop of nearly 10%. As a result, ad revenue of our Entertainment segment was flat YoY while News ad revenue saw a decline. Entertainment business was also affected by the drop in Colors Rishtey revenue.
Digital segment, which had so far been largely unaffected by macro environment, also got impacted by the slow down. After having delivered growth for 8 consecutive quarters, ad revenue of the Digital news business was flat on a YoY basis.
Despite a challenging environment, Network18 Group continued to ramp up its investments to establish strong competitive positions across Entertainment and News segments, in line with its growth plans. While these investments impacted profitability as costs grew faster than revenue, it has had a positive impact on operating metrics.
Adil Zainulbhai, chairman of Network18, said: "The first half of the fiscal has been challenging for most sectors. However, we believe that this phase should only be a minor bump in the long runway for growth. Our presence across the full spectrum of content segments and platforms places us in a unique position to leverage the combined strengths of our assets. We have set clear objectives for our different business segments and are working on executing our plans in that direction. Despite the macro environment being less than ideal for growth currently, we continue to make investments which will help us create a strong foundation for long-term and will hold us in good stead as growth returns."
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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