The company has adopted Ind AS 116, effective annual reporting period beginning April 1, 2019 and applied the standard to its leases, retrospectively, with the cumulative effect of initially applying the Standard, recognised on the date of initial application (April 1, 2019). Accordingly, the group has not restated comparative information, instead, the cumulative effect of initially applying this standard has been recognised as an adjustment to the opening balance of retained earnings as on April, 2019. In the financial results for the current year, the nature of expenses in respect of operating leases has changed from Rent (included in Other Expenses) in previous years to Depreciation for Right-of-use assets and Finance Cost for interest expense on Lease Liabilities.

• Fall in sales to the tune of 17% to Rs 486.65 crore was largely due to 20% fall in advertisement revenue to Rs 362.9 crore and 6% fall in circulation to Rs 120 crore. Both advertisement revenue and circulation revenue for the quarter was hit by COVID lockdown in fag end of March 2020.
• The advertisement revenue of print & publishing was down by 20% to Rs 330.3 crore and that of radio business was down by 16% to Rs 31.6 crore.

• OPM contracted by 410 bps to 13.6% and thus the operating profit registered a fall of 37% to Rs 65.95 crore. Contraction in OPM seems largely due to higher staff and OE expenses. Material cos gained by softening of news print prices was down by 280 bps to 34.8%. However the staff cost was up by 310 bps to 21.4% and that of OE was up by 390 bps to 30.3%.

• With OI stand higher by 23% to Rs 3.10 crore, the fall at PBIDT was restricted at 35% to Rs 69.05 crore. And with interest cost more than treble (up 283%) to Rs 6.40 crore and depreciation up by 24% to Rs 30.12 crore, the PBT was dragged down by 60% to Rs 31.93 crore. With taxation (net of deferred tax) for the period down by 70% to Rs 7.87 crore, the PAT was down by 56% to Rs 24.05 crore.

Yearly performance

Consolidated sales for the period was down by 10% to Rs 2223.83 crore dragged down by 11% fall in advertisement revenue to RS 1703.1 crore and 2% fall in circulation revenue to Rs 512.2 crore. But with 120 bps expansion in OPM, the fall at operating profit was restricted at 5% to Rs 481.51 crore. After accounting for lower other income, higher interest and higher depreciation, the PBT was down by 16% to Rs 348.16 crore. Eventually with taxation stand lower by 48% to Rs 73.19 crore, the PAT was flat at Rs 274.98 crore.

Management Comment

Sudhir Agarwal, Managing Director while commenting on the performance for Q4 & FY 2019-20, said, "The Fiscal 2020 was unprecedented in many aspects with the Industry facing headwinds on the back of weak consumer demand followed by the covid-19 pandemic which caused further challenges. The nation-wide lockdown led by the outbreak of covid-19, caused an immediate disruption to businesses, impacting revenues towards the end of Q4FY20 and continuing in Q1FY21. However, Group's hard work over the years has ensured that our financial and market position remain strong to withstand such challenging times. While revenue growth in the recent quarters has been muted, our relentless cost optimization drive coupled with soft raw material prices helped in protecting bottom line. Going forward, as we expect opening of the economy over the coming weeks, we remain optimistic of an up-tick in advertising spends by companies looking to woo the consumers back, especially for our key markets which represents the non-metros, semi-urban and rural tierII, tier-II/ & tier-IV where economic activity is expected to resume sooner. With respect to our relative market position, we feel proud that our teams have once again demonstrated remarkable perseverance resulting in Dainik Bhaskar Group achieving and maintaining its position of No.1 Newspaper Group (Dailies) in India on readership (AIR) as well as circulation. It is also encouraging to note our recent progress in key markets of Rajasthan, Bihar and Gujarat and our efforts to improve performance will continue unabated. Our ethos of editorial excellence, product innovation, cost rationalisation and circulation strategy will augur well for the Company and we are confident of returning with strong performances in the coming quarters".