India’s DB Corp records 1Q profit slide

Financial year 2020 first quarter results of India’s leading media group DB Corp showed declines in revenues and profits, possibly reflecting the market, which has yet to recover from ongoing turbulence.

by Elizabeth Shilpa | August 1, 2019

The publisher of India’s most circulated newspaper, Dainik Bhaskar, recorded declines of 4.4% and 3.9% in revenue and profit respectively, compared to the corresponding quarters in the previous year.

Advertisement revenues fell by 2.8% while circulation revenues declined by 2.3%.

“Despite the challenging macro environment, we are confident of our current strategies to deliver enterprise growth and building profitability aided by overall cost control and moderation in newsprint prices going ahead,” said Sudhir Agarwal, Managing Director, DB Corp Ltd.

“Our business strategy is focused on product strengthening, along with a series of strategic initiatives to orient the editorial team in this direction and complement our circulation expansion initiatives. Our efforts have delivered strong results and are reflected in the latest published readership and circulation number, by MRUC and ABC respectively,” he added.

No separate figures for digital revenues

As the results came out, a detail that stood out was the company’s decision to not provide separate figures for its digital revenues, unlike in the previous years. A change in internal reporting structure was cited.

DB Corp’s internet and event businesses, which were previously identified as separate reporting segments, were instead included in the “Printing, Publishing and allied business” segment. The combined segment took a 5.2% hit in revenue and 1.2% decline in profit.

Answering a query from an investor during the earnings conference call, Girish Aggarwal, non-executive director, said  the company, for competitive reasons, has decided not to issue further details about digital business now and possibly for the next four quarters.

The news media industry, in particular the print segment, which was just beginning to recover from a few quarters of high newsprint costs, now faces new headwinds in the form of a 10% duty on imported newsprint. That, coupled with weak advertising from large corporate segments such as education, real estate and automobiles, has been making it tough for even large players like DB Corp.

Newsprint duty “uncalled for”

“On the 10% duty of newsprint, the Indian Newspaper Society, Indian Language Newspapers Association and various such organizations have represented to the government of India that this duty is totally uncalled for, because we believe that the reason why we are importing newsprint is not by choice. It is by compulsion because Indian manufacturers are not able to produce that kind of quantity and quality,” Aggarwal said in response to an analyst.

Aggarwal said the total consumption of newsprint in India is about 25 lakh tonnes per year, while Indian mills are able to produce and supply not more than 10 lakh tonnes. He pointed out that while the consumption needle moved much faster in the last 5-7 years, the Indian mills were able to raise their number from 7 lakh tonnes to just 10 lakh tonnes during this period – an insignificant increase.

“We are very hopeful the government will relook at the whole thing – for the industry’s safety,” Aggarwal said.

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