MUMBAI: Radio One 94.3 FM the joint venture between Midday Multimedia and BBC worldwide announced its financial results for the first quarter ended June 30th 2009.
The company has shown an exponential growth in operating profit before license fee of 285% from the same period last year and an impressive EBIDTA (Earnings before Interest Depreciation Tax and Amortization) growth of 56% from the same period last year. The Top line growth was 8% over the last year Q1 and expenses were 2% lower this Q1 even though Q1 last year had 6 stations operational versus 7 stations contributing to costs this Q1.
We had promised our investors that this year will be a focus on EBIDTA improvement and operational cash independence versus top line growth as being chased by the rest of the industry. This focus on EBIDTA is to create confidence in our investors on our improved operational business efficiency before phase 3 investments. It is also the only yardstick to prove that each of our station heads run their stations in true business spirit and â€?spend only from what they earn… said Vineet Singh Hukmani, Managing Director, Radio One.
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The radio industry has increased in ad volume in Q1 by almost 28% from last year Q1 in the 7 cities that Radio One operates. Radio One improved its volume share in Q1 this year by 43% from Q1 last year and had a positive Value growth of 2% when the industry fell in Value by over 14% in the 7 cities as per the company release.
The reasons for our robust growth in business efficiency are 3 fold, as mentioned by Vineet :
1 – Hard Business logic before speculative brand / marketing logic which resulted in more focus on EBIDTA, Operational Cash independence versus an expensive Top line chase in a market where value is falling. Letting this EBIDTA oriented business agenda drive product / time band definition, people costs/structuring and promotions.
2 – First, efficient monetizing of existing listener share at the lowest possible cost before growing to the next level of listeners and therefore expenditure, as chasing new listeners is an expensive proposition in a cluttered undifferentiated market and may not result in linear increase in Revenue.
3 – Improving the receivables position dramatically in an industry plagued by growing debtor days so as to reach operational cash independence.
The station has recently re-launched in Mumbai and Delhi with a strengthened product promise of a minimum 13 songs per hour under a new base line – â€?Maximum music fataafat’, also re-christening its new RJs as Music Jocks (MJs). This is what the business agenda demanded – COMPLETE FOCUS and we hope to continue the perfect balance of focused listener share growth with efficient monetization of the same at the lowest cost, added Vineet.
Radio One operates in 7 metro markets namely Mumbai, Delhi, Kolkata, Chennai, Bangalore, Pune and Ahmedabad.
