Warner Music Group Corporation (WMG) has reported an 18.52 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $22 million in the quarter, compared with $27 million for the same period last year. On an adjusted basis, net profit for the quarter was stable at $28 million, when compared with the last year period. Revenue during the quarter grew 8.01 percent to $917 million from $849 million in the previous year period. Total expenses were 89.75 percent of quarterly revenues, down from 92.70 percent for the same period last year. This has led to an improvement of 295 basis points in operating margin to 10.25 percent.
Operating income for the quarter was $94 million, compared with $62 million in the previous year period.
However, the adjusted operating income for the quarter stood at $98 million compared to $62 million in the prior year period.
“Our strong momentum continues with excellent first-quarter results including 11% constant-currency revenue growth on top of 11% growth in the prior-year quarter,” said Steve Cooper, Warner Music Group’s chief executive officer. “While streaming continues to drive industry growth, we are outperforming the market thanks to extraordinary music from our artists coupled with first-class execution from our operators around the world.”
Operating cash flow improves significantly
Warner Music Group Corporation has generated cash of $156 million from operating activities during the quarter, up 155.74 percent or $95 million, when compared with the last year period. The company has spent $12 million cash to meet investing activities during the quarter as against cash outgo of $18 million in the last year period.
The company has spent $38 million cash to carry out financing activities during the quarter as against cash outgo of $6 million in the last year period.
Cash and cash equivalents stood at $455 million as on Dec. 31, 2016, up 63.67 percent or $177 million from $278 million on Dec. 31, 2015.
Working capital remains negative
Working capital of Warner Music Group Corporation was negative $883 million on Dec. 31, 2016 compared with negative $965 million on Dec. 31, 2015. Current ratio was at 0.55 as on Dec. 31, 2016, up from 0.49 on Dec. 31, 2015.
Days sales outstanding went down to 37 days for the quarter compared with 41 days for the same period last year.
Debt comes down
Warner Music Group Corporation has recorded a decline in total debt over the last one year. It stood at $2,755 million as on Dec. 31, 2016, down 7.74 percent or $231 million from $2,986 million on Dec. 31, 2015. Total debt was 51.59 percent of total assets as on Dec. 31, 2016, compared with 53.20 percent on Dec. 31, 2015. Debt to equity ratio was at 19.68 as on Dec. 31, 2016, up from 12.49 as on Dec. 31, 2015. Interest coverage ratio improved to 2.35 for the quarter from 1.38 for the same period last year.
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