>ENTERTAINMENT NETWORK INDIA LIMITED (NIRMAL BANG)

Snapshot…
Entertainment Network (India) Limited (ENIL) operates FM radio broadcasting stations through the brand Radio Mirchi in 32 Indian cities and is headquartered in Mumbai. ENIL has a wholly owned subsidiary, Times Innovative Media Limited (TIM), through which it operates its out‐of‐home media brand Times OOH and experiential marketing brand 360 Degree Experience. Its promoter, Bennett, Coleman & Co. Limited (BCCL), is the flagship company of The Times Group, which has a heritage of over 150 years and is one of India's leading media groups.

Quarterly Results ‐‐‐‐ Revenues below our Expectations
■ ENIL declared its Q4FY09 results which were below our expectations on the revenue front. Revenues were down mainly due to a fall in the advertising revenues because of slowdown in the economy. The company reported revenues of Rs. 99.6 cr in Q4FY09 as against Rs. 123.3 cr in Q4FY08 i.e. 19.3% fall YoY basis and Rs. 110.1 crs in Q3FY09, a fall of 9.6% on QoQ basis.

■ The company provided for doubtful debts worth Rs. 8.75 crs thus increasing the administrative expenses. The company also exited few of its properties thus resulting into a loss of Rs. 10.6 crs. ENIL reported an operating loss of Rs. 10.8 crs in Q4FY09 as against a profit of Rs. 21.2 crs in Q4FY08 and a profit of Rs. 0.3 crs in Q3FY09.

■ ENIL reported a net loss for Q4FY09 to the tune of Rs. 23.4 crs after minority interest against profit of Rs. 3.6 crs in Q4FY08 and a loss of Rs. 10.7 crs in Q3FY09. FY09 Results ‐‐‐‐ Revenues below our Expectations

■ ENIL declared its FY09 results which were below our expectations on the revenue front. Revenues were down mainly due to a fall in the event management revenues by 5.2%. The company reported revenues of Rs. 426.7 crs as against Rs. 413.5 cr in FY08 thus registering a rise of 3.2%.

■ The company also exited few of the properties thus resulting into a loss of Rs. 26.6 crs in FY09. ENIL reported an operating loss of Rs. 28.6 crs in FY09 as against a profit of Rs. 17.4 crs in FY08.

■ ENIL reported a net loss of Rs. 60.5 crs against a loss of Rs. 17.1 crs in FY08.

Performance Analysis
During the quarter, the impact of the economic downturn on ‘Out Of Home Media’ sector was quite severe. The advt spends in the OOH segment basically comes from Real estate and financial services segments, with both these sectors the worst hit in the recent meltdown the advt revenues from these segments went down drastically and the company also had to face cancellation of some of the deals. TIML has divested 5 loss making media properties in this year. There have been new additions in the airports and traditional sectors to the tune of 108 and 199 respectively. The company is working on a major cost cutting spree reducing its costs to the tune of Rs. 2.5‐3 crs on a monthly basis.

The FM Radio segment however accounted for a net profit of Rs. 29.1 crs. The company remains the leader with approximately 40‐41% of the market share even though the private radio industry declined by around 22‐24% in Q4FY09.

The general view for the media sector as a whole is that the general economic slowdown has hurt advertisement revenues. Client advertising spends have been under pressure but we believe the spends will improve going forward in Q1FY09 and Q2FY09.

Future Plans
The company has planned horizontal expansion in the radio business by way of getting additional licences in new cities under Phase III. The phase III plans are on its way and the auctions are expected very shortly. They are also planning to establish footprints in top 25 cities in India for the OOH segment growth.

To see full report: ENIL