IBN18 BROADCAST (IDFC SSKI)

KEY HIGHLIGHTS OF Q1FY10 RESULTS AND INTERACTION WITH THE MANAGEMENT

• IBN18 Broadcast (IBN18) numbers for the quarter are not comparable as it includes financials of IBN7. IBN18 has positively surprised on standalone as well as consolidated financials

• IBN18’s standalone (including CNN IBN and IBN7) revenues stood at Rs565m and operating profits at Rs59m in Q1FY10. Reported profit stood at Rs170m, which includes Rs515m of gains on sale of treasury stock (9m shares) and Rs305m of write off of option premium paid to TV18 for acquiring the balance stake in Viacom18.

• Driven by high spends on news broadcasting during the election period, the news operation (CNN IBN and IBN7) has seen like to like growth of 35%, EBITDA profit of Rs53m in Q1FY10 (loss of Rs113m in Q1FY09).

• IBN18 on a consolidated basis (including CNN IBN, IBN7, 50% share of IBN Lokmat and 33.7% share of Viacom18) reported revenues of Rs1.1bn, operating loss of Rs43m and net profit of Rs59m (including extraordinary income/expenses).

• We are extremely impressed with the financials of Viacom18. Share of revenues from Viacom18 (33.7% share) stood at Rs494m, which means Rs1.5bn of revenues for the property.

• Share of losses in Viacom18 is at just at Rs61m, which means only Rs181m of losses during the quarter. With continued sales traction and stabilizing cost structure, the property is expected to turn profitable at the operational level in Q3FY10

• Colors, the GEC property, is in a close battle with Star for the top slot in the GEC space. While in the last week, Colors’ GRPs stood at 284 as against 287 for Star Plus, Colors has been the leader in the genre with average GRPs of 258 as against 255 for Star Plus and 234 for Zee during the quarter. Viacom18’s other property – MTV is also emerging as a strong youth based GEC property.

• IBN18 has paid Rs.1.5bn to TV18 to exercise the option for the remaining stake in Viacom18. Now IBN18 owns 50% In Viacom18. The payment includes Rs300m towards option premium, which is expected to be written off in Q2FY10.

To see full report: IBN18