While the company has fared well in its main business, it is has racked up huge operating expenses in running its IPL cricket team Sunrisers Hyderabad
Sun TV Network Ltd reported a flat first quarter net profit despite a 41% increase in its total revenues due to higher expenses of ‘Sunrisers Hyderabad’, its franchise in the Indian Premier League (IPL) cricket tournament.
For the quarter to end-June, the TV broadcaster said its net profit increased marginally to Rs164.44 crore from Rs164.31 crore while total revenues rose 41% to Rs601.9 crore driven by higher advertising, cable and direct-to-home revenues compared with same period last year.
For the April-June period, its subscription revenues continue to maintain a significant uptrend with cable TV revenues growing 38% and DTH revenues up 20% over the same period last year. Conversions from analog continued to be strong on the back of digitisation, which is going on. Advertising revenue was up 15% during the June 2013 quarter. Revenue from broadcasting, inclusive of advertising, stood at Rs503.31 crore while income from ‘Sunrisers Hyderabad’ franchise stood at Rs98.54 crore.
However, operating costs of the IPL franchise ‘Sunrisers Hyderabad’ ate up a chunk of the company’s revenue. While operating cost for the broadcasting division stood at Rs118.87 crore, the same was Rs129.33 crore for the IPL ‘Sunrisers Hyderabad’ and the division made an operating loss of Rs30.79 crore.
Sun TV has declared an interim dividend of Rs2.25 per share.
The company has stated what it has done with its IPO proceeds. In a statement to BSE, it said, “Against the total projected utilisation of Rs572 crore (net of issue expenses) from the initial public offering (IPO) funds, an amount of Rs355.77 crore has been utilised towards capitalisation of subsidiaries, Rs136.77 crore towards launch of new channels and purchases of new equipment and up-gradation of existing equipment and Rs62.34 crore towards construction of owned corporate office. The balance proceeds from the IPO after meeting the IPO expenses, pending utilisation have been invested in fixed deposits with banks.”
At 3.30pm Friday, Sun TV was trading 4.2% up at Rs425 on the BSE, while the benchmark Sensex was marginally down at 19,170.
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