UTV July-Sept net doubles; cuts broadcasting spend

MUMBAI Oct 27 (Reuters) - UTV Software Communications Ltd UTVS.BO on Monday reported an operating loss for July-September, but benefits from deferred tax on broadcasting business helped the media group almost double its net profit.

UTV reported an operating loss of 16.45 million rupees from a 188.6 million rupees profit a year ago after expenditure rose on account of consolidation of new media and broadcasting, Ronnie Screwvala, managing director, told analysts on a conference call.

The company's net profit almost doubled to 251.4 million rupees on net sales of 1.54 billion rupees. The company had deferred taxes worth 338.3 million rupees, while the loss before taxes stood at 3.76 million rupees.

"It is a deferred tax asset that we can utilise as we go forward," Screwvala said.

Net sales more than doubled helped by broadcasting and new media businesses, which focuses on digital distribution of content over web and mobile.

BROADCASTING EXPENSE CUT

UTV may double its revenue in the current fiscal on a consolidated basis, he said, adding that it is also cutting its investment in the broadcasting business. "We are looking at a 80-100 percent growth this year," he told analysts. "Carriage fees have substantially kept increasing quarter-on-quarter basis."

"We do believe there is a slowdown in advertising that is hitting everyone Nov 1 onwards. I think delay in digitalisation in the space will also create some slowdown," he said.

UTV plans to spend about 1 billion rupees more over the next 18 months. It is cutting expenditure down by 1.4 billion -1.5 billion rupees, he added.

The broadcasting business posted revenue of 247.7 million rupees and a loss before interest and tax of 87 million rupees.

UTV Global Broadcasting Ltd, the broadcasting unit of UTV Software, runs the two youth channels, 'Bindass' and 'Bindass Movies,' as well as 'UTV Movies' and 'World Movies.'

In August, Walt Disney Co (DIS.N) acquired 15 percent stake in UTV Global Broadcasting for 1.18 billion rupees, while UTV Software bought 75 percent stake for 2.4 billion rupees.

The founders now hold 10 percent in the broadcasting unit. Disney holds 32 percent in UTV Software.

Shares in UTV Software closed up 2.6 percent at 473.85 rupees, in a Mumbai market that fell 2.2 percent. (Reporting by Jasudha Kirpalani, Editing by Ramya Venugopal)