>TV 18 (IDFC SSKI)

KEY HIGHLIGHTS OF FY09 RESULTS

Given the lack of clarity on segmental results, what we decipher from TV18’s results is as under:

• TV18 has majorly disappointed on numbers with consolidated revenues of Rs4.9bn, operating loss of Rs1.2bn and net loss of Rs1.7bn in FY09.

• In FY09 in absence of IPOs and cut down of advertising by BFSI players, news broadcasting revenues have declined by 13.5% at Rs2.9bn. With fix cost structures, operating profits are down by 77% at Rs317m.

• Internet business revenues have grown by mere 17% at ~Rs650m (also impacted by lower revenues from moneycontrol.com). Operational losses is estimated at ~Rs660m, driven by launch expenses of in.com

• Newswire18 revenues is expected to have doubled at ~Rs230m and losses at ~Rs80m

• TV18 has during the year acquired 44% stake in Infomedia18. Infomedia18 is estimated at ~Rs1.2bn for the period since 20th August 2008 and the operating losses at ~Rs500m. TV18 has significantly scaled down Infomedia18’s business and is focusing on the business directory services on print, voice and web platforms.

• While Q4FY09 was expected to be the worst quarter for the year FY09, we are negatively surprised by the sharp increase in cost structure. During Q4FY09, TV18 reported revenues of Rs1.36bn, operating loss of Rs1.27bn (Rs120m in Q3FY09) and net loss of 1.2bn (Rs227m in Q3FY09). Continued capital market turmoil in Q4FY09 and no Union budget resulted in 36% decline in revenues of news broadcasting business.

• One time expenditure during the quarter includes Rs120m as provision against lapsed warrants in Infomedia18, Rs200m towards ESOP re-pricing and Rs100m towards bad debt.

• However overall operating expenditure during Q4FY09 is up from Rs1.4bn in Q3FY09 to Rs2.6bn.

• Rs70.8m of share of losses in associates pertains to 2.5 months of 20%+ stake in IBN18

• Other income during the year stood at Rs1.1bn, while gross interest cost stood at Rs1.2bn. Other income includes option premium gain on Viacom18 and Rs270m of gains on sale of some shares of the aggregate 5.26m shares transferred to a Trust.

To see full report: TV 18