tv18

We have reviewed the annual report of Network 18 Media & Investments (Network18)for FY2009. The highlights of the same are presented below.Operating highlights Fiscal year 2009 was an extremely difficult year for the Network18 group. Withthe majority of its businesses being in an investment/expansion mode, thedownturn in the advertisement market affected the group’s operating performanceadversely. Thus while the company recorded an increase of 17% year on year (yoy)to Rs760.2 crore, it had an operating loss of Rs200 crore and a net loss of Rs181.9crore for the year.Performance of
Performance of key subsidiaries
Company Revenues % yoy Net profit % yoy
TV18* 489.8 23 -166.4 -
IBN18* 182.7 39 -92.0 -
Homeshop18 24.0 - -49 -
Setpro18 65.1 - 3 -
*Not comparable yoy as in FY2009 TV18’s numbers included Infomedia18’s numbers and IBN18’s numbers included
IBN7’s numbers, 50% in IBN Lokmat and share of loss in associate Viacom18 for part of the year respectively.
As is visible from the above table, in FY2009 Television Eighteen (TV18)’s reported
a hefty loss due to stagnant revenues in business news segment and substantial
tapering of the growth rate in the revenues of Web18 and Newswire18. On the
other hand, the cost structure continued to increase due to increase in competition
in the news business and launch of in.com during the year. For IBN18 the bright
spot is the performance of the Hindi general entertainment channel (GEC) Colors
(housed in Viacom18 in which IBN18 has a 50% stake). The channel has managed
to be consistently amongst the top two channels in the genre and promises hefty
advertising and subscription revenues going ahead.
Fund mobilisation in Network18
To ensure adequate funds for new ventures during the year the company raised
~Rs204 crore through the issue of partly convertible preference shares and another
~Rs50 crore through the conversion of one crore warrants by promoters. The debt
as on the Balance Sheet date increased by ~Rs300 crore to Rs1,385 crore in FY2009.
Also, after FY2009 the company has raised another ~Rs525 crore till date through
the placement of equity/convertible instruments to promoters and qualified
institutions, and its debt level has increased to ~Rs1,800 crore. Thus, the equity of
the company has expanded 2.25x FY2008 till date. On the one hand, the company
has managed to raise funds to sustain the growth momentum of the businesses in
gestation, on the other hand, the recent equity infusions have led to the trimming
down of its gearing ratio from 2.9x as on March 31, 2009 to 1.7x as on date.
While the cash and bank balances, and liquid investments as on Balance Sheet
date were ~Rs340 crore, with the equity infusions after March 31, 2009 and the
incremental debt, the cash level is believed to have increased to ~Rs1,150
crore. We believe that this is sufficient to meet the funding requirements in
the near term.
Included in the FY2009 consolidated Balance Sheet are two important investments
made by the group during the year (other than the investments made in the