The Gujarati newspaper Sandesh has scored Rs 10.21 crore profit in the second quarter — a whopping 300 per cent jump from Rs 3.40 crore in the same New editions of dailies keep rolling out

The Gujarati newspaper Sandesh has scored Rs 10.21 crore profit in the second quarter — a whopping 300 per cent jump from Rs 3.40 crore in the same quarter last year. Sales have almost tripled from Rs 32.87 to Rs 93.77 crore a well.
Falgunbhai Chimanbhai Patel, chairman and managing director of Ahmedabad based Sandesh Ltd, cheerfully says, “We reduced the newspaper width from 32 inches to 30 inches and the impact only started showing in June.” He says cheaper newsprint imports from Russia, China and the US have also helped keep the costs in check, pushing up the profits. Plus, its one year old relationship with the Times Group is apparently bearing fruit now.

Last November, Bennet, Coleman & Co Ltd picked up a 12 per cent stake in Sandesh and the two newspapers — Times of India and Sandesh — now offer a combined rate to advertisers. Patel says Sandesh's ad revenue jumped by 15 per cent in the last quarter and the Times' tip-up added another 8 per cent increase, pushing up the total to about 23 per cent growth in advertising. “The bull run is also helping newspapers in Gujarat. No financial sector media plan is complete without including the Gujarati dailies,” adds print media consultant A S Raghunath.

The growth story is similar at HT Media, Jagran Prakashan and Deccan Chronicle Holdings. Despite investment in expansion, HT Media, which prints Hindustan Times showed a profit increase of 18.5 per cent from Rs 26.9 to Rs 31.9 crore this year. Dainik Jagran, the country's largest read newspaper also saw its net profit jump by 25.7 per cent while Deccan Chronicle profits zoomed 30 per cent.

The one print company in the red this quarter, however, is Mumbai's Midday Multimedia. It posted a net loss of Rs 1.27 crore. The company that publishes Mumbai's popular tabloid Mid Day made a marginal Rs 45 lakh profit in the previous quarter. But Manajit Ghoshal, chief financial officer at Mid Day, says that shareholders had been forewarned. “We're in an investment phase,”  he says, explaining the losses.

But HT Media too has invested in its new financial daily Mint as well as its FM radio business. Its business paper, Mint has incurred a Rs 9 crore loss. Insiders say that HT managed to grow since it focused on growing its core business and kept a tight leash on costs. “Advertisers see benefit in using HT which has an edition in Mumbai,” says a media analyst. Mint is set to launch its third edition soon — in Bangalore. Moreover, HT will follow Mint, which is ready to take off in the IT city. Battleground Bangalore will see another paper in the arena.

Deccan Chronicle has also announced plans to launch an edition in Bangalore in 2008. This will be its second new major market after its Chennai foray in 2005. The Andhra Paper is already the number two English daily in Chennai after The Hindu with a circulation of 2.77 lakh against Hindu's 3.65 lakh. Deccan Chronicle has done well thanks to a 30 per cent ad rate hike this year. To be fair, the paper manages to keep its costs under check, too. The wage bill is as low as 4 per cent of revenue compared to 14 per cent of HT Media and 12 per cent of Jagran, says a brokerage house report. Its sales and marketing expenses are meagre too — 6 to 7 per cent of revenue compared to 26 to 28 per cent of the other newspapers.

Bennet Coleman keeps delaying the launch of the Chennai edition of The Times of India. TOI was initially scheduled to come out in April 2005 and subsequent delays cited January 2008 as a possible launch period. Now its seems that Chennai has been pushed back further to mid 2008 with the possible launch of a Goa edition in December 2007 itself.

Newsprint prices
For most newspapers cheaper newsprint (a drop from US$ 600 to 650 per metric ton to US$ 530 to 580), ad rate hikes, and ad volume increases have helped improve yields. Retail, real estate, auto and financial services emerged as major spenders in the print media.

However, print's growth story could hit a roadblock if the economy slows down since ad spends are the first to be slashed. Besides, media experts fear that newsprint may see a US$ 25 to US$ 50 price increase (next year), affecting the industry's profitability. Other large newsprint consumers indicate that the guideline for newsprint volatility is to be ready for a US$ 50 hike every six months or so. The North American newsprint market continues to be weak but saw some signs of firming up with increased exports in Q3 of 2007.