MANAGING A SUSTAINABLE AND PROFITABLE BUSINESS
The year 2019 was challenging for the global economy with growthslowing down from 3.6% in 2018 to 2.9% in 2019 the slowest growth rate since 2009. Fromthe beginning of 2020 the world had to combat the scale and impact of an unforeseen eventlike COVID-19.
Source: IMF World Economic Outlook Chapter 1 - The Great LockdownReport May 2020
Panic-stricken governments across the world implemented partiallythought-through measures like isolations lockdowns and widespread closures to slow downthe spread of the virus protect lives and allow healthcare systems to cope. Howeverthese measures brought global economic activity to a complete halt much worse than the2008-09 financial crisis. It is widely believed that the contraction is likely to be evenworse than expected as governments initiate a start-stop methodology to open thelockdown.
The Indian economy which was already reeling under a prolongedslowdown due to sluggish consumption and poorly implemented policy initiatives has alsobeen significantly impacted by the pandemic with the government imposing a nationwidelockdown from March 25 2020. While the lockdown has disrupted both the demand as well asthe supply side of the economy its effects will continue to send consumption shocks for aperiod of time as job and wage losses impact all sections of society.
If we take a macro sector-specific perspective India's Media andEntertainment industry grew by 9% in FY20 to reach Rs 1822 billion from Rs 1674 billionthe previous year. However the current fiscal year will see a de-growth of Rs 250 billionas part of the COVID-19 impact and significant disruption in economic activity.
Following a continued economic slowdown coupled with the COVID-19impact during the last quarter our revenue from operations in FY20 de-grew by 24% at Rs247.82 crores vis--vis Rs 324.71 crores in the previous year. To minimise the consequentfinancial impact we continued with our cost rationalisation initiatives which haveresulted in a total cost saving of Rs 30.2 crores annually. As a result our EBITDA standsat Rs 57.14 crores and our net profit was Rs 28.21 crores during the reporting period.
I am happy to share that recently the Association of Radio Operatorsfor India (AROI) commissioned an independent survey to understand the impact on mediaconsumption during the COVID-19 lockdown. The AROI survey findings have put radiolistenership second only to TV at 56 million reach. Engagement on radio has gone up by 23%at 2 hours and 36 minutes. Radio continued to be one of the most reliable sources ofinformation.
In FY20 the Company issued bonus shares in the ratio of 1 (One) bonusequity share of Rs 2 each for every 4 fully paid-up equity shares.
The Radio City Team
We believe that operational excellence is achieved through a continuousemphasis on processes research and best-in-class people practices. Our focus on peoplehas ensured that we are recognised among India's Best Workplaces for Women2019' and ranked among the Top 75 organisations on the list. India's BestWorkplaces for Women' is a celebration of the best work cultures in the countryespecially the ones that have made the work environment welcoming and safe for their womenemployees.
The COVID-19 pandemic will have a huge and negative impact on allsectors including the Media and Entertainment industry since the ad-spend pressure willcontinue to linger on the back of a weak economy and lower domestic consumption. I am surethat sooner than later the government will extend financial help by waiving licence feesand paying long overdue amounts as requested by the industry to keep afloat this medium ofmass communication. However media companies like us with a strong balance sheetcomfortable liquidity position and business having managed our costs prudently as apractice should be able to weather this storm better than others.
Before I conclude I would like to thank our listeners advertisersshareholders governments bankers and most importantly our Radio City team forcontributing to our journey.
I am confident that Radio City will continue to deliver on stakeholderexpectations and live up to the trust reposed in it.
|Warm regards |
|Vijay Tandon |