Team News Riveting
Reeling under one of the worst phases of crises, print media could not heave a sigh of immediate relief as a leading research agency had predicted a turnaround only in the financial year 2021-22.
Leading rating agency India Ratings and Research said EBITDA margin was likely to witness a turnaround in (financial year) FY22 as the companies recouped their revenue. However, sway towards the digital platform could restrict the full restoration of profitability.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization and is a metric used to evaluate a company’s operating performance. It can be seen as a proxy for cash flow. In finance, the term is used to describe the amount of cash (currency) that is generated or consumed in a given time period.
The print media sector was reeling under the weight of structural changes including demonetisation, implementation of Goods and Services Tax, Real Estate Regulations Act, along with proliferation and adoption of digital media over the past few years.
The print media sector now faces yet another formidable challenge of COVID-19. The strict enforcement of lockdown initially with the complete closure of business activities, prompting cut back on the discretionary expenses by corporates and other agencies to conserve cash, resulted in a substantial decline in advertisement revenue especially during April-May 2020.
Additionally, supply-side disruption impacted the circulation levels. Major print media players during the first quarter of 2020-21 witnessed a substantial revenue decline of over 67 per cent year-on-year (YoY), led by a substantial fall of over 76 per cent (YoY) in the advertisement revenue and 32 per cent (YoY) drop in circulation revenue.
The decline was higher for English print media players than Hindi print media players. Given that advertising revenue remains a key profitability driver, the players reported EBITDA losses during this period.
Unlocking in phases and thereby gradual resumption of business activities have led to a month-on-month improvement in the advertisement revenue stream and circulation levels for the sector.
Good analysis..It may take time but it will again capture the readers attention after pandemic .