D B Corp hosted a conference call on Oct 28, 2021. In the conference call the company was represented by  Pawan Agarwal-Dy Managing Director;  Girish Agarwal-Non-Executive director;  P G Mishra- Group CFO;  Mushtaq Ali-Vice President (Fin& A/c);  Lalit Jain CGM (Fin. & A/c) and P. K. Pandey – Head Investor & Media Relations.

Key Take a ways of the call

Circulation that has declined in the first 2 months of Q1FY2022 by about 10% due to covid second wave have recovered well with 94-95% of Jan-Mar 2020 levels.  Further on circulation front, the print editions of the company in Q2FY22 have recovered about 90.1% of the pre-covid revenue level (i.e. Q2FY20) compared to about 80.3% in Q2FY21.

Advertisement revenues are reclaiming pre-Covid levels with the festive season providing an added push.  In Q2FY22, the print business advertising of the company stands at 82% of the pre-Covid levels (82% of Q2FY20) which is higher compared to a recovery of about 62.1% witnessed in Q2FY21. Similarly the Radio advertisement of the company in Q2FY22 has recovered to a level of 90.9% of Q2FY20. It was about 57.6% recovery in Q2FY21 from pre covid levels.

Strong recovery in print and radio advertisement is despite the absence or muted performance of large categories such as Auto and Consumer Durables which were impacted by supply shortage of chips/electronics. All other sectors such as Real Estate, Education, BFSI, Healthcare, Retail and newer categories such as e-commerce and start-ups, are inundating the advertising space of the company.

Local advertising which constitutes almost 70% of the overall advertising is currently growing by almost double digit. The momentum of mega issues continued in the quarter gone by with all editions being completely sold out and some creating history in terms of the single day revenues that were generated from ad sales.

Local advertisement is growing at double digits in the month of October 2021. On a blended basis growth was in single digits in October 2021.

Excluding government advertisement, the advertisement run-rate stood at 94-95% of pre covid levels.

 Barring auto and consumer durables, all other sectors witnessed healthy growth including education (one quarter shift), real estate (70%), BFSI (80%) and some other segments growing 100%. Auto also grew by 16%.

Average number of pages per each copy has increased from 17 pages to 18.5 pages.    

The company was able to maintain the margin due to cut down in cost and increase in advertisement revenue. Also, cover prices has been increased from Rs 4.3 per copy to Rs 4.62 per copy. Net realization has increased from Rs 2.72 to Rs 3 per copy.  The company has achieved savings in operating cost by Rs 195 crore and it expects to save around Rs 100 crore going forward.

News print prices have increased from Rs 35000 per ton in Q2FY2021 to Rs 41500 per ton in Q2FY2022 an increase of 16%. Further, the company expects increase of news print by 7% in Q3 & Q4 of FY22.

The company has investment property of Rs 100 cr. The company plans to liquidate around Rs 5-7 crore real estate property in Q3. Real-estate advertisement revenue is realised mostly in cash.

The company is not pushing advertisers for rate increase.

All of the investment in digital business will continue through listed entity.

The company is witnessing robust momentum in its key Tier-II, Ill and beyond markets.   Considering the recovery is broad based, the company is on track to reach its  performance of 2019 or before the pandemic started.

Other developments

Radio Business:  Advertisement revenue ostood at Rs 28.7 cr and EBITDA stood at Rs 8.7 cr in Q2FY2022. The companies continue to augment audience connect and listeners engagement activities through innovative content creation.  FM ad volumes of the company increased by 68% as against industry ad volume growth of 58%.  The company's Fm market share increased by 2-3% YoY taking it to 37% in H1FY2022.  Increase in ad revenues was due to increased spend by advertisers including real estate, banking & finance and healthcare sector.

Digital Format/business: The company is building best in class digital platform, ad free user experience on its digital app while maintaining high quality, insightful and reader engagement content. As its digital footprint expands, it hope to be able to capture the mind-space of its readers across Print as well as Digital mediums. As per the latest Com Score report, Dainik Bhaskar App monthly users grew by around 7x since the beginning of 2020, an outcome of high-quality content creation coupled with highly personalized product experience. The company is no.1 in Hindi and Gujarati news app. To build a strong technical team the company has hired from some of India's leading companies with Consumer Product and Technology backgrounds, with the purpose of creating the best digital content experiences in high-quality apps.The company also on boarded Mr Mark Thompson, the ex-CEO of the New York Times' to the advisory board who will be advising the company exclusively in the Indian market.