Radio Mirchi’s Parent ENIL Net Profit Falls The Most In Six Years

Entertainment Network (India) Ltd. the parent company of FM station Radio Mirchi, posted a whopping 73.1 percent slump in net profit, the most in six years, in the first quarter, continuing its falling streak for the seventh straight quarter,

The private radio station operator posted a net profit of Rs 4.48 crore.

Revenue fell 5.8 percent year-on-year to Rs 104.36 crore, compared to Rs 110.76 crore clocked in the same period a year ago.

“In large part, the poor results of the quarter can be attributed to the lingering effects of demonetisation, the roll out of RERA (Real Estate Regulation Act) and run-up to GST (Goods and Services Tax) in June,” ENIL Managing Director and CEO Prashant Panday
said in a post-earnings call.

The earnings before interest, tax, depreciation and amortisation (EBITDA) declined 52.5 percent to Rs 16.7 crore compared to Rs 29.45 crore in the corresponding quarter in a previous financial year. The profit margins contracted to 16 percent from 26.6 percent during the period.

Here are the key takeaways from an interaction with the management:

• To reduce advertisement volumes
• Increase the pricing but the give advertiser more return on investment
• 12 percent increase in pricing, better than peers
• Central government contribution was 19 percent during corresponding quarter of 2015-16
• Increased HR cost- added 300 employees on the base of existing 750
• Expect breakeven of new radio station in 8-12 quarters
• Remains top in seven out of eight metro cities
• Market Share at 33 percent, next player at 22 percent
• No advertisement break of more than 2.5 minutes, others have 7-8 minute break