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Zee Media swings into net profit in Q4 amid drop in expenses

MUMBAI: Zee Media Corporation Ltd (ZMCL), which houses the TV news and print business of Subhash Chandra-promoted Essel Group, has turned profitable at the net level in the fiscal fourth quarter amid a drop in operating expenditure and revenue.

ZMCL, however, has to wait longer to be net positive for the full fiscal. The company narrowed its net loss to Rs 6.92 crore (Rs 69.2 million) in FY16 and will be in investment mode as it prepares to launch an English news channel named WION (World-Is-One-News) in August.

Q4 performance

The news broadcaster, which also runs English daily dna, reported a consolidated net profit of Rs 18.27 crore (Rs 182.7 million) in the fiscal fourth quarter compared to a net loss of Rs 7.18 crore (Rs 71.8 million) a year ago.

Total income from operations in the quarter ended 31 March 2016 dropped 2.7% to Rs 136.15 crore (Rs 1.36 billion) from Rs 139.88 crore a year ago. The company’s dependence on ad revenue increased during the quarter even as subscription revenue fell.

Ad revenue grew 11.7% to Rs 110.25 crore (Rs 1.1 billion) from Rs 98.69 crore (Rs 986.9 million).

Subscription revenue plunged 47.6% to Rs 15.84 crore (Rs 158.4 million) from Rs 30.21 crore (Rs 302.1 million).

Consolidated Financials (Break up of Revenues)

Advertising revenue was 81% of the total revenue, while subscription revenue comprised 11.6% of the total revenue. The ratio of advertising to subscription revenue stood at 71:22 in Q4 of FY15.

Expenditure declined 20.4% to Rs 100.8 crore (Rs 1 billion). All the three major cost heads—cost of goods, employee cost and other expenses—saw a double-digital decline.

Consolidated Financials (Break up of Expenditures)

EBITDA for Q4 of FY16 increased by 168.3% to Rs 35.33 crore (Rs 353.3 million from Rs 13.17 crore (Rs 131.7 million) a year ago.

Full fiscal performance

For the full fiscal, ZMCL narrowed its consolidated net loss to Rs 6.92 crore from Rs 46.65 crore (Rs 466.5 million) in FY15.

EBITDA grew by 103.8% to Rs 77.79 crore (Rs 777.9 million) in FY16 from Rs 38.16 crore (Rs 381.6 million) a year ago.

Total income from operations remained flat at Rs 542.92 crore (Rs 5.43 billion) compared to Rs 544.33 crore (Rs 5.44 billion) in the year-ago period.

Advertising revenue grew 1.9% to Rs 401.1 crore (Rs 4.01 billion) from Rs 393.8 crore (Rs 3.94 billion) in the earlier year.

Subscription revenue was down 9.8% to Rs 102.39 crore (Rs 1.02 billion) from Rs 113.54 crore (Rs 1.14 billion).

Consolidated Financials (Break up of Revenues)1

Total expenditure fell 7.8% to Rs 513.46 crore (Rs 5.13 billion) from 556.65 crore (Rs 5.57 billion). Marketing, distribution and business promotion expenses fell to Rs 79.1 crore (Rs 791 million) from Rs 80.75 crore (Rs 807.5 million).

TV segment

ZMCL, which runs 10 news channels, expanded its operating profit from the television segment on account of reduction in operating expenditure.

The television segment EBITDA for Q4 increased 88.2% to Rs 29.68 crore (Rs 296.8 million) from Rs 15.77 crore (Rs 157.7 million) in the prior-year quarter.

Revenue remained flat at Rs 109.2 crore (Rs 1.09 billion) compared to Rs 110.37 crore (Rs 1.1 billion) in the corresponding quarter of the previous fiscal.

Television Business - Existing Vs New Channels - For Q4

Expenses decreased 16% to Rs 79.56 crore (Rs 795.6 million) from Rs 94.6 crore (Rs 946 million).

For the full fiscal, profit before tax and interest from the TV segment stood at Rs 44.97 crore (Rs 449.7 million), up  72.8% from Rs 26.02 crore (Rs 260.2 million) in FY15.

Revenue increased 3% to Rs 434.59 crore (Rs 4.35 billion) compared to Rs 422.12 crore (Rs 4.22 billion).

Television Business - Existing Vs New Channels - Upto Q44

Print segment

ZMCL’s print business, comprising dna newspaper, has turned around in the fiscal fourth quarter while continuing to report operating loss on a full-year basis.

The print segment posted EBITDA of Rs 5.65 crore (Rs 56.5 million) in the quarter ended 31 March 2016 compared to an EBITDA loss of Rs 2.61 crore (Rs 26.1 million) in the same quarter of the previous fiscal.

Revenue dropped 8.8% to Rs 26.91 crore (Rs 269.1 million) from Rs 29.51 crore (Rs 295.1 million).

Expenses declined 34% to Rs 21.26 crore (Rs 212.6 million) from Rs 32.12 crore (Rs 321.2 million) in Q4 of FY15.

Segment Results - For Q4

On a full-year basis, the company’s profit before tax and interest from the print segment narrowed sharply. It stood at Rs 4.91 crore (Rs 49.1 million) in FY16 compared to Rs 31.88 crore (Rs 318.8 million) in the year-ago period.

Segment Results - Upto Q4

Revenue fell to Rs 120.98 crore (Rs 1.21 billion) in FY16 from Rs 123.13 crore (Rs 1.23 billion) a year ago.

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