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Interest cost, losses from DNA paint Zee Media’s FY15 in red

MUMBAI: Zee Media Corporation Ltd (ZMCL), the company that houses the TV and print news business of Subhash Chandra-promoted Essel Group, has seen a massive 62.4 per cent jump in its consolidated topline in the fiscal ended 31 March 2015 owing to a 78.6 per cent increase in its advertising revenue.

However, an equal increase in expenses, due to the operating loss from new channels (Zee MPCG, Zee Marudhara, Zee Kalinga, and Maurya TV) and print business (DNA), along with an interest cost of Rs 52.63 crore (Rs 526.3 million), severely dented the company’s bottomline.

For FY15,  ZMCL posted a consolidated net loss of Rs 46.65 crore (Rs 466.51 million), compared to a net profit of Rs 18.93 crore (Rs 189.3 million) in the previous fiscal.

However, pursuant to the merger of Essel Publishers Pvt Ltd (print business) with ZMCL w.e.f. 1 April 2014, the consolidated financial result is not comparable with the previous fiscal.

ZMCL’s advertising revenues for the fiscal stood at Rs 393.88 crore (Rs 3.94 billion), up 78.6 per cent from Rs 220.51 crore (Rs 2.20 billion) in the previous fiscal, while subscription revenue saw an increase of 13.7 per cent to Rs 113.54 crore (Rs 1.13 billion).

Among expenses, cost of raw materials of Rs 52.57 crore (Rs 525.7 million) was a new entry in the books in the fiscal, while operating and employee cost each witnessed over 50 per cent increase.

ZMCL FY15 YOY

The company, however, posted an operating profit (EBITDA) of Rs 40.39 crore (Rs 403.9 million) during the fiscal, compared to Rs 25.48 crore (Rs 254.8 million) in the year-ago period.

TV news business

Revenue from the TV news business stood at Rs 422.12 crore (Rs 4.22 billion) in the fiscal ended 31 March 2015 compared to Rs 323.83 crore (Rs 3.24 billion) a year ago, while expenses stood at Rs 362.55 crore (Rs 3.62 billion).

EBITDA from TV news business stood at Rs 59.57 crore (Rs 595.7 million).

Within the TV news, EBITDA from existing channels was at 96.55 crore (Rs 965.5 million), compared to Rs 45.8 crore (Rs 458 million) in the previous fiscal.

However, operating loss from new business (Zee MPCG, Zee Marudhara, Zee Kalinga, and Maurya TV) increased to Rs 36.98 crore (Rs 369.8 million), from Rs 20.32 crore (Rs 203.2 million) in FY14.

ZMCL FY15 TV

Print business

ZMCL’s print business (dna) registered a revenue of Rs 122.21 crore (Rs 1.22 billion) in the fiscal, while expenses were at Rs 141.39 crore (Rs 1.41 billion).

EBITDA loss from the print segment was at Rs 19.18 crore (Rs 191.8 million) during the fiscal.

The consolidated financial results comprised the results of Zee Akaash News Pvt Ltd (60 per cent), Mediavest India Pvt Ltd (100 per cent), Diligent Media Corporation Ltd (99.99 per cent), Pri-Media Services Pvt Ltd (100 per cent), and the company’s share in an associate entity, Maurya TV Pvt Ltd, where ZMCL held 37.87 per cent till 11 December 2014, and 100 per cent after 11 December, following further acquisitions.

ZMCL group CEO of news cluster Bhaskar Das said, “The continued growth in advertising revenue in FY15 gave us ample scope to experiment with path-breaking content like roping in cricket celebrities for our World Cup programming. From ‘update’ to ‘upgrade’, our content philosophy has evolved to cater to the ever-increasing demands of an engaged consumer. The initiation of BARC ratings in the new fiscal will bring about a paradigm shift in how the industry and advertisers track the viewership data.”

ZMCL CEO Ashish Kirpal Pandit added, “The company, in addition to upgrading its content and increasing its penetration among advertisers, is also focusing on improving its operational efficiency, which is evident from the improved margins. The company plans to make full use of the increase in digitisation and expected improvement in viewership measurements and move towards a more analytical approach to doing business.”

Quarterly performance

During the quarter ended 31 March 2015, the company posted a net loss of Rs 7.18 crore (Rs 71.8 million), as against a net profit of Rs 4.11 crore (Rs 41.1 million) in the corresponding quarter of the previous fiscal.

Total income from operations was up 69 per cent to Rs 139.9 crore (Rs 1.4 billion), from Rs 82.8 crore (Rs 828 million) in the year-ago period. The company’s expenses were up 47.7 per cent to Rs 137.5 crore (Rs 1.37 billion).

Operating profit for the quarter stood at Rs 15.4 crore (Rs 154 million), compared to an EBITDA loss of Rs 5.6 crore (Rs 56 million) in the year-ago period.

ZMCL FY15 QoQ

Advertising revenue witnessed a jump of 70.6 per cent to Rs 98.69 crore (Rs 986.9 million), while subscription revenue was up 21.6 per cent to Rs 30.21 crore (Rs 302.1 million) during the quarter under review.

TV business in Q4

EBITDA from television business in the fiscal fourth quarter stood at Rs 15.77 crore (Rs 157.7 million) on a total revenue of Rs 110.36 crore (Rs 1.10 billion).

Out of this, EBITDA from existing business stood at Rs 22.4 crore (Rs 224 million), while EBITDA loss from new business was at Rs 6.63 crore (Rs 66.3 million). In the earlier-year period, EBITDA from existing business and EBITDA loss from new business were at Rs 3.88 crore (Rs 38.8 million) and Rs 9.49 crore (Rs 94.9 million) respectively.

ZMCL FY15 TV QoQ

Print business

EBITDA loss from print business stood at Rs 38 lakh (Rs 3.8 million) on a total revenue of Rs 29.51 crore (Rs 2.95 million). Expenses stood at Rs 29.89 crore (Rs 298.9 million) during the quarter.

Business highlights

ZMCL continued to be one of India’s largest news networks, reaching 187.9 million viewers across the country, riding on its bouquet of two national and eight regional news channels and digital platforms, including news websites and social media channels. (Source: TAM, CS 4+, All India, ZMCL Channels, Q4 Monthly Avg Reach; Google Analytics, Facebook and Twitter).

Flagship channel Zee News provided extensive coverage of the Cricket World Cup through its ‘World War’ programme with expert panel comprising Navjot Singh Sidhu, Ajay Jadeja, Shoaib Malik, and Gaurav Kapur.

The network organised the second edition of Zeegnition Auto Awards to celebrate the engineering brilliance of India’s automobile sector by honouring companies and individuals working towards making the sector innovative.

Zee News reached over 77.6 million viewers across the country. The channel continued to provide extensive coverage on important events with national impact, such as the general and Railway budgets and the Delhi elections.

The channel used the cricket theme to promote peace between archrivals India and Pakistan through an innovative initiative called ‘The Misunderstood Scoreboard’. The campaign received two awards at Goafest ABBY Awards.

In the fourth quarter, Zeenews.com attracted over 34 million unique users, as against 26 million unique users during Q4 of previous year, registering an increase of 29 per cent. The website recorded 76 million visits as against 52 million, an increase of 46 per cent. Zeenews.com received 153 million page views vis-a-vis 118 million during the same quarter last year, recording an increase of 29 per cent. Visits via social referral increased by 192 per cent during the same period of comparison.

The regional websites also put up a robust show with visits to Hindi, Bengali, and Marathi websites growing by 324 per cent, 110 per cent, and 58 per cent respectively.