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HT Media's newsprint prices averaged around Rs 66,000 per tonne in the current quarter compared to the same period last year which was around Rs 42,000, Group CFO Piyush Gupta said in its earnings report for the second quarter of fiscal year 2023. is Rs 269 crore, more than 9% and then 12%, he said.

Gupta also said distribution revenue was Rs 61 crore, an increase of over 21%. Growth was driven by print jobs and copy turnaround, each up 2%, Gupta said in an earnings statement. As a result, the company's operating income increased by 10% to Rs 3.44 crore and its operating EBITDA for the current quarter was Rs 1.4 crore with a margin of -4%.

Speaking of the business of the English group, which includes HT Media and Mint, Gupta said its advertising revenue for the fiscal second quarter was Rs 1.47 billion, up 10% year-on-year and up of 16%. While distribution revenue increased 118% yoy to Rs 15 crore, there was a 19% sequential increase.

Regarding the Hindi business, Gupta said advertising revenue was Rs 122 crore, up 7% yoy and up 8% sequentially. Meanwhile, distribution revenue rose 7% yoy to Rs 47 crore and fell -2% sequentially.

Regarding radio, Gupta said there was strong growth of 36% yoy with revenue reaching Rs 33 crore compared to Rs 24 crore in the same period last year. The operating EBITDA margin is positive at 3%. Meanwhile, figures for the quarter remained flat at -4% yoy from Rs 33 crore to Rs 32 crore while Operating EBITDA was slightly negative at -Rs 2 crore with a margin of -5%.

When asked about the group's quarterly losses, Gupta said the losses were mainly due to two things. “If you look at the development of the EBITDA in the same period last year, one of them is the increase in the price of newsprint. Newspaper prices in the current quarter averaged around Rs 66,000 per tonne compared to around Rs 42,000 in the same period last year. So the price of newsprint has increased by 50%. It's just a price delta. And expressed in Rs this means an increase in expenses of about Rs 57 crores which goes into the profit and loss account.

He also said that the price has peaked and it is believed that after a period of stability it will start to decline. “As you know, newsprint is a cyclical commodity. And I think they peaked at $850 to $890 a ton,” he added.

Gupta also said prices will be $700 in dollar terms over the next two quarters. “Well, of course, as you understand, the currency itself is wild at the moment because the rupee is depreciating by 10%. So we will save about 25-30% in dollars but lose 10% in foreign currency. So personally I think given our inventory situation and newsprint price development we will be loss making over the next few quarters especially as newsprint costs and margins start to improve.” Hm.

In terms of earnings, Gupta also said volumes have gradually recovered over the past two quarters since the pandemic disruption. However, the price is still an issue. “So the volume is back to around 80-90%. They are even above pre-Covid levels in some Hindi markets. But pricing is still a big issue, so we are between 70-90% of pre-Covid prices in each market.

When asked if the group hopes to surpass pre-COVID levels through widespread adoption of digital media, Gupta said the COVID-19 pandemic has accelerated the transition to digital or new-age media, but not a new phenomenon be. “This has been happening for many years as more and more people adapt to new forms of media. As a result, we have a pretty strong digital business surviving these changes.”

Gupta expresses hope and says that they will easily reach a very advantageous situation. “We're not speculating on the future, but suffice it to say that the impact of the return in newsprint prices on the media itself will have a very strong impact on earnings. And with the price correction in the market being a supply and demand factor, I think we can easily go beyond pre-Covid levels without demand.”