PACRA maintains Entity Ratings of HUM Network Limited

Pakistan’s media industry, particularly television and radio, has posted considerable growth in the last two decades as the broadcasting segment was opened for the private sector. Lately, the Pakistan Electronic Media Regulatory Authority (PEMRA) has issued licenses for FM Radio - 265, Cable TV - 4,152, and Satellite TV - 123. Moreover, PEMRA has issued 9 Satellite, 47 new Cable TV, and 3 licenses for Direct-to-Home (DTH) has been issued. Advertisement remains the main revenue generating segment for the media industry, posting growth of ~17%, during FY22. Going forward, media industry is becoming more digital and youth-oriented. This has led to a shift from traditional TV and print media to digital platforms. Moreover, the average daily viewership per person falls by ~14% due to consistent increase in the number of internet and social media users. The industry overall outlook is expected to remain stable.
HUM Network Limited ('HUM') is among the leading media and entertainment platforms in Pakistan, with a viewership that spans across the globe. Over time, HUM has strategically expanded from HUM TV to Hum Masala, Hum Sitaray, Hum News, Hum Mart and lately, Tower Sports – that holds transmission rights of Ten Sports in Pakistan. This diversification has enhanced the network's presence and its ability to cater to diverse audience preferences and uphold HUMs market position. This along with Sponsor acumen provides comfort to the ratings. HUM generates revenue from advertisements (~71%) mainly, followed by subscriptions (~ 25%) and production (~3%). Digital and distribution revenue share remains minimal. During FY23, revenues showed ~17% growth; While, margins and in turn profitability remains intact. On the financial risk front, HUM manages the working capital cycle through internal cash generation and holds considerable borrowing cushion on its balance sheet. Coverages remain stable. Going forward, HUM plans to acquire Sphere Ventures (Pvt.) Ltd. that broadcasts kid’s content. Previously, HUM entered into an agreement with GS Group Inc. through Hum Network FZ LLC, a wholly owned subsidiary of HUM, to launch a fund named "Pakistan Katalatic Funds (PKF)" with an expected size of USD~ 50mln. However. the launch of fund remains susceptible due to current economic situation.
The ratings are dependent on the management's ability to sustain the market position amidst considerable competition and changing business environment. Substantial support from the investment book (TFC's & Mutual Funds) may strengthen the bottom-line, going forward. Moreover, improvement in the financial risk profile remains vital. The management has represented that there is high level of diversity in its revenue base, emanating from segments independent of each other in terms of risk. This needs to be assessed in view of the future strategy and business plan of the company.

About the Entity
HUM Network Limited ("HUM" or “the Company") was incorporated as a Public Listed Company (listed on PSX) in 2004. The Company received a license to operate an International Satellite Television from the Pakistan Electronic Media Regulatory Authority (PEMRA) in October 2004. The majority shares (~51.85%) of the Company are held by sponsoring family comprising of Mr. Duraid Qureshi holding majority stake (~45.74%). Mr. Mazhar ul Haq Siddiqui is the Chairman of the Board. Mr. Duraid is the Chief Executive officer and Ms. Sultana Siddiqui is Executive Director of the Company. Mr. Duraid is assisted by an experienced management team with over decades of experience