UTV reports Rs 40 million net profit in Q2

MUMBAI: UTV Software Communications Limited has declared a net profit of Rs 40 million (Rs 4 crores) for the quarter ended 30 September, 2006. The consolidated revenue of the company for the quarter is Rs 387 million (Rs 38.7 crores) and EBITDA (earnings before interest, tax, depreciation and amortization) is Rs 60 million (Rs 6 crores).


UTV has consolidated the financials of UESL, UTV-US, UTV-UK and UTV-Mauritius.


“The second quarter of the current fiscal witnessed significant improvement in our television business segment primarily driven by airtime sales and animation businesses. It has reported a marked improvement in both revenues and margins. We foresee continued growth in this segment in the coming quarters. In revenue terms for the first half of this fiscal this segment and recorded growth of over 50 per cent as compared to the same period in the previous year,” says UTV CEO Ronnie Screwvala.


“Film business witnessed very little activity with release of Khosla Ka Ghosla, which is still running across the country. Deliveries in the animation business were accelerated – this business is entering into an extremely high growth phase; the airtime sales division has also seen improvements with its shows starting to deliver viewership as well as revenues. The company also recently started its new post-production facility UTVPost at its Andheri facilities,” he added.


Corporate Developments


Strategic Investment in UTV: Disney has entered the company as a strategic investor garnering a 14.9 per cent of the expanded capital base. Disney has subscribed to 3,400,000 equity shares of Rs 10 each at Rs 192.5 per share aggregating Rs 654.5 million (Rs 65.45 crores). This transaction has been consummated during 2Q FY2007. These funds are being utilised for repayment of loans and expansion of the company’s existing businesses. This resulted in the total equity base of 22.9 million shares.


Issue of Warrants to Promoters: The company in addition has issued 1,949,360 warrants to the promoters of UTV, which are convertible into one equity share each of the company, at a price of Rs 192.5 per share.


Merger of UESL with UTV: The company in its extraordinary general meeting held on 16 October, 2006 decided on a “Scheme of Arrangement” for the merger of its 100 per cent subsidiary United Entertainment Solutions Ltd (UESL) with the company. The necessary shareholder approvals were also taken. The merger primarily aims at integrating the businesses of the two companies in the film and animation segments and offers solutions for captive and outsourcing business. The step also ensures better management focus on the business through re-branding of services under the brand name of UTV.

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