MUMBAI: Viacom18, the joint venture between Network18 Group and Viacom, has posted a third straight quarterly loss as operating expenses have surged 47 per cent mainly on account of launch of new channels.

The company, which runs a clutch of entertainment channels including flagship Hindi general entertainment channel Colors, widened its net loss to Rs 532 million for three months ended December, versus a profit of Rs 460 million in the year-earlier period. In the first two quarters of this fiscal, it had slipped into the red with a net loss of Rs 10 million and Rs 284 million.

Operating expenses jumped to Rs 4 billion for the quarter, from Rs 2.72 billion a year ago. Marketing, distribution and promotional expenses made a big leap from Rs 450 million to Rs 926 million. The main trigger in this was an expense of Rs 200 million incurred from the launch of Sonic, Comedy Central and Colors HD. The launch cost and operating loss from new channel History TV18 amounted to Rs 250 million.

The positive thing is that the television business has stayed operationally profitable, primarily led by Colors. The operating profit from this segment has, however, narrowed to Rs 385 million, from Rs 520 million in the year-earlier period.

The movie business suffered an operating loss of Rs 739 million compared to Rs 200 million in the trailing quarter. In the year-ago third quarter, the company had stayed dormant on the movie front, taking an operating loss of just Rs 20 million.

Viacom18 said it has incurred a one-time expense of Rs 390 million in relation to the deferment of the Hindi movie channel. It has also taken write-offs at TIFC (The Indian Film Company) of Rs 146 million.

Overall, the company?s operating loss was Rs 355 million for the quarter, reversing from an operating profit of Rs 510 million a year earlier.

Says Network18 Group CEO Sai Kumar, "During the last quarter, our profits from continuing operations were offset by largely one-time costs incurred towards investments in the expansion of our television channel portfolio and the conscious impairment of our film library given the deferment of our Hindi movies channel. We strengthened our television stable further with launch of new services such as History TV18, Sonic and our HD bouquet comprising Colors HD, History TV18 HD and CNBC-TV18 Prime HD."

The spike in expenses overrided the growth in operating revenues which swung higher to Rs 3.65 billion for the fiscal third quarter compared to Rs 3.23 billion a year ago.

The television segment reported a revenue of Rs 3.54 billion (from Rs 3.23 billion a year ago) while the motion picture arm pocketed just Rs 109 million.

Adertising could continue to show a sluggish trend for the next few months. Says Kumar, "It has clearly been a sluggish phase for the industry as a whole. Advertising revenues continue to exhibit lacklustre growth and may continue at the same pace over the next few months. Our subscription revenues, however, are on track as projected."