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ZEEL Q1 net zooms 15.4% due to strong ad sales growth
MUMBAI: Subhash Chandra-promoted Zee Entertainment Enterprises Ltd (ZEEL) has posted a strong show in the first quarter of FY 2015–16.
Buoyed by a 25.4 per cent jump in advertising revenue, ZEEL’s consolidated net profit for the quarter ended 30 June 2015 stood at Rs 242.3 crore (Rs 2.42 billion), registering a 15.4 per cent jump over the year-ago period.
ZEEL’s operating revenue grew 27 per cent to Rs 1,339.9 crore (Rs 13.4 billion), compared to Rs 1,055.1 crore (Rs 10.55 billion) recorded in the corresponding quarter of the previous fiscal.
However, a 37.9 per cent jump in expenses, mainly due to the launch of a new channel (&TV), affected operating profit (EBITDA), which saw a muted growth of 0.7 per cent. EBITDA for the quarter stood at Rs 311.2 crore (Rs 3.11 billion) compared to Rs 309.1 crore (Rs 3.09 billion) a year ago.
The EBITDA margin for the quarter stood at a healthy 23.2 per cent.
ZEEL’s advertising revenue during the quarter stood at Rs 779.9 crore (Rs 7,799 million), showing an increase of 25.4 per cent year-on-year. The company said that excluding sports business, which is event led, advertising revenue growth was in mid to high twenties.
Total subscription revenue for the quarter was at Rs 462.5 crore (Rs 4.62 billion), down from Rs 510.8 crore (Rs 5.11 billion) in the exit quarter of the last fiscal.
During the current quarter, domestic subscription revenue stood at Rs 368 crore (Rs 3.68 billion), while international subscription revenue was at Rs 94.5 crore (Rs 945 million).
Other sales and services include syndication sales, film distribution, commission on sales, play-out and transmission services, facility usage income, etc. During the quarter, other sales and services stood at Rs 97.4 crore (Rs 974 million).
Total expenses jumped 37.9 per cent to Rs 1,028.7 crore (Rs 10.29 billion), compared to Rs 746 crore (Rs 7.46 billion) in the year-ago period.
ZEEL’s sports business made a small operating profit of Rs 1.5 crore (Rs 15 million) for the quarter under review.
Revenue stood at Rs 151.9 crore (Rs 1.52 billion), while cost incurred during the quarter was at Rs 150.4 crore (Rs 1.50 billion).
ZEEL expects losses from its sports business for the fiscal to be under Rs 100 crore (Rs 1 billion) in FY16.
The company’s sports broadcast business includes subsidiary Taj Television, which owns and operates Ten Sports, Ten Cricket, Ten Action, Ten Golf and Ten HD.
During the quarter, the sporting properties on the channels included Pakistan vs Zimbabwe cricket series, West Indies vs England cricket series, Sri Lanka vs Pakistan cricket series, UEFA Champions League Finals, WWE Specials, and MotoGP, among other properties.
In the second quarter, it will telecast Tour de France, UEFA Champions League, US Open Tennis, UEFA Europa League, Copa del Ray and PGA Tour.
ZEEL chairman Subhash Chandra said, “The Indian media and entertainment industry is making strides in the economy, backed by rising advertising revenues and consumer payments. 61 per cent of all households in India are now equipped with a television, making us the second-largest TV viewership market after China. With digitisation, subscription revenues in urban and rural areas are growing, resulting in a healthy impact on the industry.”
Commenting on the results of the company, Chandra added, “ZEE has recorded a satisfactory performance during the first quarter. Our investments have resulted in organic growth, which is in line with our expectations. We will continue to build ZEE’s presence in this highly competitive space by creating compelling content across genres and by pursuing new opportunities that will yield long-term growth.”
ZEEL MD and CEO Punit Goenka added, “ZEE has started the year on a good note, witnessing good returns on the operational front. This clearly highlights the popularity of our programmes that continue to attract loyal audiences. We continue to experience growth in both advertising and subscription revenues through the launch of new and innovative programming.”
Speaking about the outlook of the business, Goenka added, “While competition remains high in the Indian television industry, we remain true to our values by bringing innovative and high-quality entertainment to our audiences. Our efforts are to continue in this journey and entertain audiences all over the world. We believe that by delivering excellent content, we can benefit from monetising revenues from an advertising and subscription standpoint.”
ZEEL shares closed at Rs 375.75 apiece on the BSE on Wednesday, up 0.29 per cent, after touching an intraday high of Rs 385.70. The trading volume of the shares spurted 3.83 times on 15 July.