MUMBAI: UTV Software Communications has posted a net profit of Rs 299 million (Rs 29.90 crores) in Q3 2009, which is 29 per cent up from Rs 231 million (Rs 23.10 crores) in the corresponding period last year. The company’s total operating revenues reported growth of 30 per cent to Rs 1.6 billion (Rs 160 crores) from Rs 1.23 billion (Rs 123 crores).
The company’s motion pictures division posted the maximum profit of Rs 21.50 million (Rs 2.15 crores) in the quarter ended 31 December, 2008 viz-a-viz its other divisions. The television and gaming segments earned Rs 19.4 million (Rs 1.94 crores) and Rs 12.20 million (Rs 1.22 crores) respectively.
UTV invested a corpus of Rs 4.1 billion (Rs 410 crores) in its motion pictures business for movies that are slated to release over the next two years.
UTV expects these investments to provide a strong foundation for the delivery of a large movie slate year-on-year as compared to any Indian movie studio. The company has invested a substantial amount into its Hollywood slate, which is expected to show results during the quarters to come.
In Q3 FY2009, UTV released movies like Aamir, Kismat Konnection, Mumbai Meri Jaan, A Wednesday, Welcome to Sajjanpur, Fashion, Jaane Tu Ya Jaane Na and Oye Lucky! Lucky Oye!
Amongst the Hollywood releases, M Night Shyamalyan’s The Happening, which is co-produced by UTV, was released. Also released was the Tamil remake of UTV’s Hindi movie Khosla Ka Ghosla called Poi Solla Poram.
"With a balanced mix of big ticket Hindi and Hollywood releases as well as small budget Hindi and regional releases, the motion picture business has delivered an excellent performance during the nine months ended 31 December, 2008," says UTV Software Communications CEO Ronnie Screwvala.
However, the growth as well as the success of the company’s movies has not corresponded with the bottom line thus far, primarily because revenue exploitation has been back-ended and the cycle extended. However, the company expects that the coming quarters shall witness benefits of larger aggregated library with quality movies in its repertoire.
Screwvala says, "What is important for everyone looking at our studio model is to understand the workings and the objective. UTV clearly decided that it wanted to own intellectual property in perpetuity as also be in charge of its own distribution and revenues worldwide. In that context, it is important to understand that the increase in distribution platforms and changing dynamics in syndication of movies have resulted in the revenue exploitation cycle stretching beyond just the first few quarters of release. Therefore to judge the margins over a short term for our movie division, which is rapidly growing its movie repertoire, might not give the right perspective."
Some of the movies that are lined up for release from the company are Delhi 6 starring Abhishek Bachchan and Sonam Kapoor and directed by Rakeysh Omprakash Mehra; Dev D starring Abhay Deol and directed by Anurag Kashyap; Kissan starring Sohail Khan, Arbaaz Khan, Jackie Shroff and Dia Mirza and directed by Puneet Sira along with Dhoondte Reh Jaaoge starring Kunal Khemu, Soha Ali Khan, Paresh Rawal and Sonu Sood and directed by Omesh Shukla.
"We have committed to high growth while we consolidate each of our businesses and to that extent we have demonstrated success. While the third quarter shows a growth of 30 per cent, the nine months cumulatively show a growth of 86 per cent on our revenues and these clearly would not have been achieved if we had not invested heavily into the businesses that demonstrate high growth for the company," Screwvala said.
He also added that all of this financial year and into at least six months of the next year, the company will continue to remain in investment mode.
The company has invested Rs 3.1 billion in broadcasting and Rs 1.3 billion for its games content segment. While it reported a loss of Rs 113 million for the quarter and Rs 200 million till date in the broadcasting business; on the games content front, despite the macro environment, India Games has grown around 20 per cent quarter on quarter and has witnessed most of its growth contributed from its India operations. Ignition continues to focus on its three IPs, whereas True Games is the start-up and will be in investment mode for another four quarters.
On the new media front, UTV has aggregated a strong library in the digital space in regional languages. For a business that has been in operation for just a few months, it has reported revenues of approximately Rs 143 million for the nine month period.