ZMCL slips into loss in Q4 due to impairment of investment in Diligent Media

MUMBAI: TV news broadcaster Zee Media Corporation Ltd (ZMCL) has reported a consolidated net loss of Rs 86.6 crore for the quarter ended 31st March as against a net profit of Rs 11.52 crore in the corresponding quarter of the previous fiscal.

The loss is primarily due to impairment of Rs 103.35 crore in the value of the company’s investment in Diligent Media Corporation Ltd (DMCL), the published to English daily DNA.

In the footnote of the company’s financial statement, the company disclosed that its investment of Rs. 436.27 crore in 436,26,56,265 – 6% Non-Cumulative Non-Convertible Redeemable Preference Shares of Re. 1 each of DMCL redeemable at par on 1st November 2036, was tested for impairment as per IndAS 109 – “Financial Instruments” as at 31 March 2019.

The company added that an amount of Rs 103.35 crore has been provided towards impairment in the value of company’s investment in DMCL and recognised during the quarter/year ended 31st March 2019 and shown as exceptional items based on the valuation carried out by an independent valuer.

While the management expects timely redemption by DMCL, the said impairment has been made as per Ind-AS 109, ZMCL said in the Q4 financial statement.

The company further stated that the operating revenue during the quarter declined by 3.9% to Rs 169.35 crore from Rs 176.22 crore in the year-ago period due to hold back of spends by advertisers across the industry in the first half of the quarter in view of the TRAI’s New Tariff Order implementation.

However, the company stated that it has managed to cover up significantly during the rest of the quarter. The ad revenue grew by 0.3% at Rs 154.2 crore compared to Rs 153.6 crore. Subscription revenue declined 22% to Rs 10.16 crore from Rs 13.03 crore. Other sales and services declined 47.7% to Rs 4.98 crore compared to Rs 9.5 crore.

Operating expenditure in Q4 FY19 reduced by 7.7% to Rs 130.45 crore from Rs 141.27 crore in Q4 FY18 due to business optimisation. EBITDA for the quarter grew by 11.3% to Rs 38.89 crore from Rs 34.95 crore for the corresponding period last financial year. EBITDA Margin grew from 19.8% in Q4FY18 to 23% in Q4FY19.

For the full fiscal, the company’s net profit declined by 73.1% to Rs 13.1 crore as against Rs 49 crore in FY18. Operating EBITDA jumped 30.6% to Rs 173.6 crore from Rs 132.9 crore in the previous fiscal. Operating revenue increased 19.8% to Rs 686.9 crore as against Rs 573.4 crore. Total expenses jumped 16.5% to Rs 513.2 crore compared to Rs 440.53 crore.

Ad revenue for the fiscal was up by 20.7% to Rs 616 crore while subscription revenue remained flat at Rs 47.39 crore compared to Rs 47.49 crore a year ago.

ZMCL owns and operates 14 news channels comprising 1 Global, 3 National and 10 Regional channels together continued to be one of the largest TV news networks in the country and reached more than 345 million viewers.

During the quarter, Vishwapati Trivedi, Independent Director, resigned from the Board with effect from 27th January, and Surjit Banga, Independent Director, resigned from the Board with effect from 1st April. The Board of Directors approved the induction of two Additional Directors viz. Raj Kumar Gupta as Independent Director and Arun Kumar Kapoor as Non-Executive Non-Independent Director with effect from 14th May.

You may be interested