Hindustan Media Ventures, the publisher of Hindustan daily, reported a 12% jump in net profit for the third quarter due to ongoing cost cutting measures.
On a positive note, advertising revenue increased by Rs 8 cr, or 5%, on year during the third quarter to Rs 177 cr. However, the comparison was with a weak quarter. In the preceding three months (July-Sept), advertising revenue had been at Rs 157 cr — a decline of 7.6% on year.
Circulation revenue fell by Rs 8 cr in October-December period due to “competitor actions in UP and Bihar,” the company said. As a result, total revenue for the three months remained flat at Rs 230 cr.
The company was able to increase its operating profit to Rs 58 cr from Rs 41 cr last year because of a sharp fall in ‘other expenses’ to Rs 59 cr from Rs 97 cr.
“We continue to reap the benefits of company wide cost rationalisation initiative which is visible in the expansion of our profit margins,” said
Shobhana Bhartia, Chairperson, Hindustan Media Ventures.
This fall of Rs 38 cr was partially offset by an increase of Rs 17 cr in employee costs and an increase of Rs 4 cr in raw material and inventory costs.
There was an increase in raw material cost due to higher newsprint consumption and inflation in commodity prices, the company said.
The company, like other newspaper publishers in India, has bad a rough 12 months so far due to various factors such as demonetization and GST rollout impacting advertising.
Bhartia said the worst seems to be over and growth should be on the horizon.
“The quarter witnessed overall revenue growth with advertising revenue picking up sharply towards the end of the period,” she added. “With the teething issues around GST resolved, we see a potential upside – a faster growth in advertising revenue in the next financial year.”
She, however, noted that the growth numbers should be read keeping in mind the fact that the comparison period last year (Oct-Dec 2016) was when demonetization had taken place and therefore had seen poor growth.
The company said it achieved advertising revenue growth “amidst flat advertising volumes on the back of improved yields and volume growth.”
It said it saw strong performance in FMCG and Retail segment and it continued to invest increasing circulation.
The company sold its entire investment in HT Digital Streams Limited resulting in a gain of Rs 15.3 cr during the quarter.
Hindustan is the second largest newspaper daily of India based on total readership.
The company also publishes two Hindi magazines ‘Nandan’ and ‘Kadambini’.
‘Hindustan’ has a strong regional presence and enjoys a leadership position in Bihar, Jharkhand and Uttarakhand and is at No.2 in Delhi and UP.