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HT Media’s newsprint prices in the current quarter have averaged around Rs 66,000 per metric ton as against the same period last year, which was about Rs 42,000, Group CFO Piyush Gupta said during the Q2FY23 earnings call. He said that Print ad revenue reached Rs 269 crores with a 9% rise and sequentially a growth of 12%.

Gupta stated that the circulation revenue reached Rs 61 crores. That is a 21% increase. Gupta said that the growth was due to both print order as well as realization per copy. The sequential growth was also 2%. The company’s operating revenue increased 10% to Rs 344 Crores and its operating EBITDA was Rs 14 crores for the current quarter. There was a -4% margin.

Speaking about the Group’s English business, which covers HT Media and Mint, Gupta shared that in Q2 FY23, the ad revenue stood at Rs 147 crores, which is a 10% rise on YoY basis and a 16% increase on a sequential basis. The sequential increase in circulation revenue was 19%, whereas it rose 118% y-o-y at Rs 15 crores.

Gupta stated that Hindi business had a total ad revenue of Rs 122 crores. This is a 7% increase y-o–y and an 8% sequential increase. On a yo-y basis, circulation revenue rose 7% to Rs 47 Crores and was flattish to -22% sequentially.

Gupta spoke about radio and said that revenue has increased by 36% yo-y, with revenues at Rs 33 crores as compared to Rs 24 crores in the same period last year. The operating EBITDA margin grew to 3%, which is a positive number. Digital was flat at -4% year-over-year with Rs 33 crores dropping to Rs 32crores. Operating EBITDA was marginally below Rs 2 crores, with a margin of -5%.

Gupta answered a question about the losses the group sustained over the past quarters. He said that they are due to two main reasons. “If you look at the EBITDA movement versus the same period last year, one is the elevated newsprint prices. The current quarter’s newsprint prices averaged Rs 66,000 per ton, compared to the Rs 42,000 for the same period last. As you can see, there has been a roughly 50% increase in newsprint price. This is just the pricing delta. And in terms of rupee crore, that is a cost hit of about Rs 57 crores, which has gone into the P&L.”

He also stated that prices have reached a peak and that it is likely that they will start to fall after a period of plateauing. “As you know, newsprint is a cyclical commodity. And I believe they are already hitting the peak at about USD 850-890 a metric ton”, he added.

Gupta also said that prices in dollars will be close to USD 700 over the next two quarters. “Now, of course, as you would understand, the currency itself is a bit of a wildcard at this point in time because there’s a 10% depreciation in the rupee. In dollar terms, we will see savings of 25-30%, but the currency will see a 10% drop. I personally, therefore, believe looking at our inventory situation and where the newsprint prices are heading, that in the next couple of quarters, we would come out of the red, which is primarily because of the newsprint cost and the margins will therefore start improving”, he added.

Gupta said that revenue has been recovering steadily for the last two quarters. This was after some relief from the pandemic. Pricing remains a problem. “So, the volumes are back to about 80-90%. They are even higher than the pre-COVID levels in some Hindi markets. But pricing still is a big challenge, whereby market by market, we are anywhere between 70-90% of the pre-COVID prices.”

Gupta was asked if they expect to surpass pre-COVID levels because of the widespread adoption digital media. He said that although the COVID-19 epidemic has accelerated the process, it is not new. “That has been happening for many, many years as more and more people adapt to new forms of media. As a result, we have a fairly robust Digital business, which is undergoing those changes.”

Gupta expressed optimism and stated that they would be able to achieve a very profitable position. ”We don’t speculate on the forward-looking forecast but suffice to say that the mere impact of the newsprint prices reverting back to media itself will have a very robust impact on the bottom line. And with pricing correcting in the marketplace, which is a factor of demand and supply, I think we can easily cross the pre-COVID levels without any questions.”