Media Times Limited (PSX: MDTL) was incorporated in Pakistan as a private limited company in 2001 and was converted into a public limited company in 2007. The principal activity of the company is printing and publishing daily English newspapers in the name of “Daily Times” “Sunday Times” and Urdu newspapers in the name of “Aaj Kal”. Besides, the company also publishes “Sunday Magazine” and “TGIF magazine”. The electronic media channels of MDTL include “Business plus TV” and “Zaiqa TFC”.

Pattern of Shareholding

As of June 30, 2024, MDTL has a total of 178.851 million shares outstanding which are held by 2818 shareholders. Local general public has the majority stake of 52.06 percent in the company followed by associated companies, undertakings and related parties holding 33.69 percent shares. Banks, DFIs and NBFIs account for 3.27 percent shares of MDTL. The remaining shares are held by other categories of shareholders.

Financial Performance (2019-24)

Except for 2022, MDTL’s topline has been following a downward trend over the period under consideration. The company has also been posting net losses in all the years except 2022. The detailed performance review of the period under consideration is given below.

In 2019, MDTL’s topline slid by 50.08 percent year-on-year. This was primarily the result of lesser advertising revenue (particularly electronic media advertising) as well as lower outsourcing & other services revenue recognized during the year. Cost of production dropped by 38.64 percent in 2019 on account of lesser salaries & benefits, paper, stores, and spare parts consumed as well as lower transmission & up-linking costs incurred during the year. The company incurred a gross loss of Rs.16.52 million in 2019 versus a gross profit of Rs.39.24 million recorded in 2018. Selling & administrative expenses plunged by 16.81 percent in 2019 due to considerably lower payroll expenses incurred during the year as the company squeezed its workforce from 263 employees in 2018 to 120 employees in 2019. Marketing, distribution & promotion expenses also dipped in 2019. MDTL recorded 63.78 percent thinner other income in 2019 on the back of no liabilities written back as well as no rental income from property on sub-lease received during the year. Other expenses also shrank by 25.75 percent in 2019 due to fewer fixed assets written off during the year. The company recorded an operating loss of Rs.191.23 million in 2019, up 26 percent year-on-year. Finance costs slid by 22.43 percent in 2019 despite the high prevailing discount rate. Despite restructuring its loan agreements, the company was unable to meet its financial obligations on due dates and went under litigation and default. MDTL incurred a net loss of Rs.244.507 million in 2019, up 6.65 percent year-on-year. This translated into a loss per share of Rs.1.37 in 2019 versus a loss per share of Rs.1.28 recorded in 2018.

In 2020, MDTL recorded an 11.69 percent year-on-year plunge in its revenue. This was on account of the non-release of an advertisement campaign from the government, the shift of customers from print media to social media as well as an outbreak of COVID-19 during the last two quarters of the year. Cost of production decreased by 28.5 percent in 2020 due to lesser salaries & benefits, lesser paper, stores & spares consumed during the year as well as curtailed transmission & up-linking costs incurred during the year. By keeping a check on its cost, MDTL was able to record a gross profit of Rs.17.97 million in 2020 with a GP margin of 11.49 percent. Selling & administrative expenses plummeted by 44.51 percent in 2020 due to lesser payroll expenses, utility expenses as well as rent, rates, and taxes incurred during the year. The company squeezed its workforce to 87 employees in 2020. Other income strengthened by 77.34 percent in 2020 due to a greater amount of liabilities written back during the year. Other expenses thinned down by 96.43 percent in 2020 as no fixed assets, advances to staff, and fixed assets were written off during the year. MDTL made a 70.97 percent leaner operating loss to the tune of Rs.55.51 million in 2020. Finance cost ticked down by 0.67 percent in 2020. Net loss slumped by 55 percent in 2020 to clock in at Rs.110.019 million with a loss per share of Rs.0.62.

MDTL registered a 22.89 percent thinner topline in 2021. While revenue from print media advertisement improved during the year, no outsourcing & other services fees and lesser revenue from the sale of newspapers resulted in a weaker topline in 2021. The cost of production shrank by 18.19 percent in 2021 as the company kept a check on its salaries expense, consumed less paper, incurred fewer printing charges, and recorded smaller depreciation expenses during the year. This enabled the company to post a gross profit of Rs.7.36 million in 2021, down 59 percent year-on-year. GP margin also fell to 6.10 percent in 2021. Selling & administrative expenses dipped by a marginal 2.45 percent in 2021. The massive spike in ECL on financial assets at amortized cost was the main culprit which overshadowed the company’s efforts to keep its operating expense in check-in 2021. Other income picked up by 13.57 percent in 2021 due to greater liabilities written back during the year as well as bigger gains recorded on the disposal of fixed assets. Other expenses dropped by 66.39 percent in 2021 as no impairment on plant & machinery was recorded during the year. MDTL recorded an operating loss of Rs.60.2 million in 2021, up 8.44 percent year-on-year. Finance costs slid by 1.73 percent in 2021. Net loss increased by 4.05 percent in 2021 to clock in at Rs.114.476 million in 2021 with a loss per share of Rs.0.64.

2022 proved to be the year of revival for MDTL whereby the company recorded a decent 25 percent year-on-year rise in its topline. This was on account of an encouraging increase in print media advertisement revenue recognized during the year. Despite robust revenue, the company was able to cut down its cost of production by 4.31 percent in 2022. This was due to the lesser depreciation expense recorded on owned assets in 2022. As a consequence, gross profit enhanced by 476.36 percent in 2022 to clock in at Rs.42.39 million. This culminated in a GP margin of 28.11 percent in 2022 – the highest level achieved during the period under consideration. Selling & administrative expenses were squeezed by 17.75 percent in 2022 due to lesser ECL on financial assets at amortized cost. Other income strengthened by 372 percent in 2022 as the company recorded a massive gain of Rs.99.49 million on the disposal of licenses. MDTL recorded an operating profit of Rs.92.62 million in 2022 which culminated into an OP margin of 62.42 percent. Finance costs surged by 40.72 percent in 2022 due to higher discount rates and increases in long-term finance obtained during the year. 2022 was the only year during the period under consideration where the company posted net profit to the tune of Rs.17.07 million. EPS stood at Rs.0.10 in 2022.

In 2023, MDTL’s topline got back on its descending journey and posted a year-on-year decline of 26.41 percent. Both advertisement revenue and revenue from the sale of newspapers decreased during the year. This was on account of a widespread shift of customers from print to social media. Nonrelease of advertisement campaigns by the government also contributed to squeezing MDTL’s topline in 2023. The cost of production inched up by 0.87 percent despite curtailment in operating activities. This was the effect of mounting inflationary pressure. The company was able to post gross profit; however, it was down by 96.17 percent year-on-year. GP margin drastically dropped to 1.46 percent in 2023. Selling & administrative expenses contracted by 7.19 percent in 2023 due to considerably lower payroll expenses incurred during the year as the company right-sized its workforce from 76 employees in 2022 to 63 employees in 2023. The effect of lower payroll expense was greatly offset by considerably higher ECL on financial assets at amortized cost booked during the year. Other income plunged by 47.39 percent in 2023 due to the high-base effect as the company recorded a gain on the disposal of licenses in the previous year. MDTL recorded an operating loss of Rs.3.19 million in 2023. Finance costs grew by 47 percent in 2023 due to higher discount rates. As a consequence, the company recorded a net loss of Rs.110.54 million with a loss per share of Rs.0.62.

MDTL’s net sales further eroded by 39.4 percent in 2024 due to a persistent drop in advertisement revenue and revenue from the sale of newspapers. Inflationary pressure didn’t allow the cost of production to taper by a comparable margin resulting in a gross loss of Rs.19.63 million- the highest gross loss recorded during the period under consideration. The company tried to make up for the lost sales by keeping a check on its operating expenses which plummeted by 16.3 percent in 2024. This was done by booking lesser allowance for ECL on financial assets and by drastic downsizing which resulted in a petite workforce of just 39 employees in 2024. Other income also provided generous support to MDTL as it multiplied by 157.66 percent in 2024. This was the result of the waiver of loan mark-up by Faysal Bank. MDTL also wrote back liabilities which were no longer payable. This resulted in a buoyant operating profit of Rs.93.45 million recorded in 2024 with a magnificent OP margin of 138.97 percent. Finance costs shrank by 9.7 percent in 2024 as the company received a mark-up waiver. However, finance costs were still huge enough to drag the company’s bottom line into the negative zone. MDTL recorded a net loss of Rs.3.07 million in 2024 with a loss per share of Rs.0.02.

Future Outlook

With the widespread shift from print media to digital media, the company can no longer rely on the sale of its newspapers and print media advertisements. The company has already entered the electronic and social media space and is actively maintaining the social media handles of its newspapers, magazines, and TV channels. The company is also in the process of developing YouTube channels for Business Plus TV and Zaiqa TFC to gain greater audiences.

Currently, the company is facing an acute financial liquidity crunch. Its current liabilities exceed its current assets by Rs.781.40 million as of June 30, 2024. The company also has accumulated losses of Rs.2918.698 million as of June 30, 2024, which has exceeded the share capital and has resulted in negative equity. This cast significant doubt over the ability of the company to continue as a going concern.