HT Media's newsprint prices have averaged Rs 66,000 per tonne in the current quarter, compared to around Rs 42,000 in the same period last year, said Piyush Gupta, the group's chief financial officer, in his call on the news. Q2 2023 earnings. Also, print advertising revenues reached 2023.269 crore, up 9% and 12% respectively, it said.
Gupta further said that the turnover was Rs 61 crore, an increase of more than 21%. The increase was driven by print orders and copy sales as well as a 2% sequential increase. As a result, the operating income of the company grew by 10% to Rs 344 crore and the operating EBITDA stood at Rs 14 crore in the current quarter with a margin of -4%.
Speaking about the group's UK business, which includes HT Media and Mint, Gupta shared that the ad revenue stood at Rs 147 crore in 2FY23, up 10% and 16% year-on-year respectively. While revenue from turnover grew 118% year-on-year to Rs 15 crore, the sequential growth was 19%.
In the Hindi business, Gupta said that ad revenue was Rs 122 crore, up 7% and 8% year-on-year respectively. Meanwhile, revenue rose 7% yoy to Rs 47 crore and fell -2% sequentially.
Talking about radio, Gupta said that there was a significant growth of 36% YoY with revenue at Rs 33 crore as compared to Rs 24 crore in the same period last year. Operating EBITDA margin reached positive territory of 3%. Meanwhile, digital remained -4% year-on-year from Rs33m to Rs32m this quarter and operating EBITDA was slightly negative at -2m to -5%.
When asked about the group's losses in recent quarters, Gupta said the losses were mainly due to two reasons. “If you look at the annual movement in EBITDA, one of them is the increase in newspaper prices. Newsprint prices have averaged around Rs 66,000 per tonne in the current quarter, compared to around Rs 42,000 in the same time last year. So you can see that the paper price has increased by around 50%. This is pure delta price. And on a rupee per crore basis, that translates into a reduced cost of around Rs 57 crore in profit and loss."
He also said that the price has reached its peak and should start declining after stabilizing for some time. "As you know, newsprint is a cyclical product. And I think they've peaked at $850-890 a ton," he added.
Gupta also noted that the dollar price will be close to $700 in the coming quarters. “Now obviously, as you understand, the currency itself is a wild card at the moment because the rupee has depreciated by 10 percent, so we're saving about 25-30 percent in dollars, but it's going to be 10 percent. The coin. So I personally think if you look at our inventory situation and the price movement of newsprint, we'll get out of the red over the next couple of quarters, which is largely driven by newsprint costs, and then margins will start. improve,” he added.
Speaking of earnings, Gupta also said that volumes are gradually recovering after a slight lull over the past two quarters due to the pandemic. However, the price is still an issue. "So volumes are coming back around 80-90%. In some Indian markets they are even above pre-Covid levels. But price is still a big challenge, market to market we are between 70-90% of pre-Covid price. »
When asked if the group plans to exit before Covid-19 due to the widespread use of digital media, Gupta said the COVID-19 pandemic has accelerated the shift to digital or new media, but it's not a new phenomenon. . “This has been happening for years as more and more people adapt to new forms of media. As a result, we have a pretty strong digital business through this shift.
Gupta expresses hope and says that they will easily reach a very profitable situation. “We are not speculating about the future, but suffice it to say that the modest impact of newsprint price returns on media will have a very large impact on earnings. And with the price correction in the market, which is a factor of supply and demand, I think we can easily surpass pre-COVID levels, no doubt."
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