BENGALURU: The Tapas Chakravarti led DQ Entertainment (International) Limited (DQEIL) reported consolidated loss in FY-2015 (current year, year ended March 31, 2015) at Rs 19.71 crore as compared to a profit after tax (PAT) of Rs 43.77 crore in the previous fiscal due to lower consolidated net income from operations (TIO), higher unallocated operating loss and higher finance expenses. The company reported consolidated loss of Rs 26.33 crore in Q4-2015 as compared to a PAT of RS 14.66 crore in the corresponding year ago quarter and a PAT of Rs 4.24 crore in the immediate trailing quarter. However, on a standalone basis, the company has reported 19.7 percent lower PAT at Rs 15.5 crore in the current year as compared to the Rs 19.3 crore in FY-2014.
Note: (1) 100,00,000 = 100 Lakhs = 10 million = 1 crore
(2) All numbers are consolidated unless stated otherwise.
DQEIL reported an 18.7 percent drop in TIO in FY-2015 to Rs 194.80 crore as compared to the Rs 239.68 crore in FY-2015. TIO in Q4-2015 at Rs 75.81 crore was 25.6 percent lower than the Rs 101.83 crore in Q4-2014, but 65.8 percent more than the Rs 45.71 crore in Q3-2015.
The company attributes the change in TIO to change in its business model in the case of production and development of its own IP. Previously the company was producing IP through a special purpose vehicle and recognizing production value, but since FY-2014-15, the company has decided to directly produce and capitalize its own IP and will only recognize the distribution revenue on completion of projects and delivery to the broadcasters. Further, slowdown in production and delay in the start of new projects on account of difficult market conditions have also affected production in the current year.
The company’s incurred a higher unallocated operating loss in FY-2015 at Rs 54.32 crore as compared to the loss of Rs 38.01 crore in FY-2014. Unallocated loss in Q4-2015 at Rs 26.39 crore was lower than the operating loss of Rs 37.14 crore in Q4-2014, but was higher than the unallocated operating loss of Rs 14.24 crore in Q3-2015.
The company’s finance expenses in FY-2015 increased 69.8 percent to Rs 42.73 crore as compared to the Rs 25.17 crore in FY-2014. Finance expense in Q4-2015 at Rs 16.78 crore was more than double (2.52 times) the Rs 6.66 crore in Q4-2014 and 54 percent more than the Rs 10.90 crore in Q3-2015.
Segments
While both segments (Animation and Distribution that contribute to the company’s numbers reported operating profits (except Q4-2015 in which Distribution incurred operating loss), unallocated operating losses and higher finance charges ate into the profits during the year as well as during the current quarter.
Animation
Animation segment reported 24 percent lower revenue at Rs 142.34 crore in FY-2015 as compared to the Rs 187.34 crore in FY-2014. Revenue from this segment in Q4-2015 fell 13 percent to Rs 69.87 crore as compared to the Rs 80.32 crore in Q4-2014, but was 3.1 times the Rs 22.61 crore in Q3-2015.
Animation segment reported36.8 percent lower operating profit at Rs 70.27 crore as compared to the Rs 111.11 crore in FY-2014. Operating profit in Q4-2015 at Rs 33.88 crore was 34.6 percent lower than the Rs 51.77 crore in Q4-2014, but 70 percent more than the Rs 19.93 crore in Q3-2015.
Distribution
Distribution segment reported 0.2 percent increase in revenue to Rs 52.46 crore in FY-2015 as compared to the Rs 52.34 crore in the previous year. Distribution revenue in Q4-2014 at Rs 5.94 crore was 72.4 percent less (less than a third) than the Rs 21.51 crore in Q4-2014 and was 74.3 percent lower than the Rs 23.1 crore in the preceding quarter.
Distribution segment reported 10.8 percent drop in operating profit in FY-2015 at Rs 13.67 crore as compared to the Rs 15.32 crore in FY-2014. In Q4-2015, the segment incurred operating loss of Rs 12.53 crore as compared to the operating profit of Rs 1.25 crore in Q4-2014 and operating profit of Rs 15.37 crore in Q3-2015.
Let us look at the other numbers reported by DQEIL
Total Expenses (TE) in FY-2015 at Rs 166.45 crore (85.4 percent of TIO) was 2.8 percent lower than the Rs 171.16 crore (72.4 percent of TIO) in FY-2014. TE in Q4-2015 at Rs 85.30 crore (112.5 percent of TIO) was 1.1 percent lower than the Rs 86.27 crore (84.7 percent of TIO) in Q4-2014 and almost tripled (2.98 times) as compared to the Rs 18.9 crore (62.1 percent of TIO) in Q3-2015.
DQEIL Production expense (PE) in FY-2015 increased 10.8 percent to Rs 21.63 crore (11.1 percent of TIO) as compared to the Rs 19.52 crore (8.1 percent of TIO) in FY-2014. PE in Q4-2015 at Rs 16.75 crore (22.1 percent of TIO) was 6.7 percent more than the Rs 15.69 crore in Q4-2015 and almost eighteen-fold (17.61 times) the Rs 0.95 crore in Q3-2015.
The company’s Employee Expenses (EBE) in FY-2015 at Rs 63.71 crore (32.7 percent of TIO) was 11.5 percent lower than the Rs 71.96 crore (30 percent of TIO) in FY-2014. EBE in Q4-2015 at Rs 13.59 crore (17.9 percent of TIO) was 1.8 percent more than the Rs 13.35 crore in Q4-2015, but 25.1 percent lower than the Rs 18.15 crore in Q3-2015.