Jagran Prakashan, which publishes India’s most widely distributed newspaper, the Hindi daily Dainik Jagran, today reported yet another quarter of continued pain as the media sector grapples with falling revenues and continuing encroachment by digital media.
Despite expectations of a boost to revenue from general elections, the company actually reported a year-on-year decline.
Advertising revenue fell by Rs 14 cr to Rs 431 cr in Apr-Jun from the same quarter last year, while overall revenue fell by Rs 19 cr, or 3%, to 584 cr from last year.
Included in the overall revenue deceleration was a Rs 1 cr fall in circulation revenue and Rs 6 cr fall in revenue from the profitable radio business to Rs 69.8 cr.
Most of the fall happened at the flagship Dainik Jagran newspaper, where the top line shrunk by Rs 11 cr on year to Rs 389 cr.
Chairman and MD Mahendra Mohan Gupta blamed the overall sluggishness for the poor performance.
“Economic headwinds continued causing increased stress on consumption and in consequence on advertising spend by the advertisers,” he said.
He pointed out that the auto industry, one of the largest advertisers, has seen the highest degrowth in sales since 1995.
“Revenues from election were also far below the expectations and could not compensate the loss of revenue from auto sector and government,” he said.
Education ad revenue rose, as did digital revenue. However, the Rs 1.5 cr increase in digital ad revenue was too little to make an impact on the overall top line.
Hit by shrinking revenue, overall operating profit slimmed to Rs 141 cr from Rs 164 cr in the year-ago quarter.
This included the impact of a fall of around Rs 4 cr in operating revenue in the radio business and a fall of Rs 19 cr in the operating profit of the main, Dainik Jagran business.
“The industry was feeling some respite from moderation in newsprint prices but levy of custom duty will reduce the benefit of lower newsprint prices significantly,” Gupta said.
“The radio business, for the first time, reported a fall in revenues and profits primarily because of the loss of government revenue which could not be compensated by the election revenues and loss of certain volumes due to taking rate hike in certain markets in addition to impact of adverse macro environment on categories like real estate.
“This is an aberration and I hope and trust that radio business will soon be back to the path of growth,” he added.
Gupta also said that the company has entered into definitive agreements for the acquisition of Big FM. “We are awaiting the MIB approval for completing the acquisition.”
Net profit for the company fell by around Rs 22.5 cr to Rs 66.75 cr.
“Let us hope that environment turns positive and sentiments improve at the earliest,” he said.