Kerala-based MM TV in the red with a net loss of Rs 5.84 cr in FY19

MM TV Limited (MML), the TV broadcasting arm of Malayala Manorama, has slipped in the red in FY19. The broadcaster has posted a net loss of Rs 5.84 crore in FY19 as against a net profit of Rs 3.58 crore in FY18.

The total operating income declined by around 9% YoY to Rs 127.65 crore from Rs 140.2 crore due to a decline in the ad revenue. The floods that hit Kerala in the months of July-August 2018 had impacted the advertisement revenue of the company during the Onam season which is the peak season for the company.

Profit before interest lease depreciation and tax (PBILDT) dropped to Rs 20.15 crore as against Rs 37.06 crore a year ago. The PBILDT margin of the company also declined from 26.42% in FY18 to 15.72% in FY19 mainly on account of increase in employee cost and promotional/donation expense compared to the previous year without any growth in revenue.

The company has recorded an operating income of Rs. 71 crore and PBILDT margin of around 20% till H1FY20.

CARE Ratings reaffirmed the rating assigned to long-term and short-term bank facilities of MML. The ratings assigned to the bank facilities of MML continue to draw strength from its strong promoter group, presence of well-experienced management team, established position of the company’s News & General Entertainment Channel (GEC) in the Malayalam television space and comfortable capital structure.

It added that the ratings are, however, constrained by the decline in operating income & losses incurred in FY19, drop in operating margin, the regional concentration of operations with income concentration from two channels, and income uncertainty associated with in-house content that requires significant cash outflow.

MML is a subsidiary of The Malayala Manorama Company Limited (TMMC), Kottayam. TMMC has been operational for over a century and the group has a presence in all forms of media including print, television, radio, online portals and events. The management team of MML is well experienced in the Malayalam television sector with many of them having worked with leading Malayalam television groups for over two decades.

Established position of the Mazhavil Manorama and Manorama News in the Malayalam television space Mazhavil, though a late entrant in 2011, has established itself as a popular Malayalam GEC with a growing share of viewership. In August 2015, the company launched Mazhavil HD, which was the first Malayalam channel to be available in High Definition format. The Malayalam news space is also competitive and Manorama News is among the top news channels.

MML has a limited portfolio of two channels compared to other competitors having multiple channels catering to various niche customer preferences including movies, music, etc. Furthermore, the total income of MML is highly dependent on a single channel with, Mazhavil contributing about 70% of the total income. Also, MML is present only within the Malayalam television industry and is concentrated within the state of Kerala.

Established in 2004 with its registered office in Kottayam, MML commenced its commercial broadcasting on August 15, 2006, with the launch of Manorama News Channel. In October 2011, the company started broadcast of its GEC called Mazhavil Manorama (Mazhavil). Both these channels are broadcasted within India.

Apart from this, the company broadcasts another channel, Mazhavil International, outside India mainly to cater to the Keralite population in the Middle East countries. While Manorama News and Mazhavil are free to air channels within India, Mazhavil International is free to air in the Middle East and subscription-based pay channel for the rest of the world.