KARACHI: Hum Network Ltd’s unconsolidated post-tax profit declined by 54.70 per cent to Rs166.3 million (earnings per share Rs0.18) for the half year ended Dec 31, 2015 from Rs367.1m (eps Rs0.39) earned in the same period last year.

The board skipped an interim dividend.

Revenue decreased by 2.23pc to Rs1.84bn from Rs1.80bn in 1HFY15, while cost of production mounted to Rs1.20bn from Rs0.90bn, resulting in lower gross profit at Rs596m.

Other income also slipped to Rs37m from Rs60m, while finance costs jumped to Rs18m from Rs7m year-on-year.

In October-December, HUMN announced earnings of Rs27m (eps Rs0.03), down 83.23pc as compared to Rs161m (eps Rs0.17) in the same quarter last year.

The results were in line with market expectations.

Analyst Muhammad Tahir Saeed at Topline Securities stated that the revenue grew 14pc year-on-year to Rs1.1bn in October-December 2015-16, but cost of sales surged by 65pc year-on-year to Rs817m.

“We attribute this increase in cost of sales to ongoing expenses on new channels ‘Hum Sitarey’ and ‘Hum Films’,” analyst said.

Gross profit declined by 44.63pc to Rs237m from Rs428m in 2QFY15. Gross margins of the company shrank by 23.9 percentage points to 22.5pc.

“Effective tax rate of the company declined by 467 basis points to 19pc in 2QFY16,” commented the analyst.

Published in Dawn, March 1st, 2016

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