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ZEEL Profit Up 13.8% In Q2 FY 2011

Ad revenue up 66% YoY; operating revenue up 32%; operating EBITDA up 25%.

BestMediaInfo Bureau | Delhi | October 29, 2010

Zee Entertainment Enterprises Limited (ZEEL) has reported its second quarter fiscal 2011 consolidated revenue of Rs 716.6 crore representing a 32% growth over the corresponding period in the previous fiscal. The consolidated operating profit (EBITDA) for the quarter stood at Rs 188.5 crore and profit after tax at Rs 126.3 crore. The EBITDA margin for the quarter stood at 26.5%.

The numbers as published are after consolidating the financials of Taj TV Limited (Taj). The Board of Directors in its meeting held on 28th October, 2010, has taken on record the unaudited consolidated financial results of ZEEL and its subsidiaries for the quarter ended September 30, 2010. The numbers of the second quarter fiscal 2011 include financial results of Regional General Entertainment Channel business (R-GEC) acquired from Zee News Limited (ZNL). The R-GEC business was acquired w.e.f. January 1, 2010. 9X business undertaking of 9X Media Pvt Ltd and ETC Network Ltd were also merged with the Company w.e.f. March 31, 2010. Hence, the numbers for this quarter are not comparable with those of the corresponding quarter last fiscal.

Subhash Chandra, Chairman, stated, “The Indian media industry continues to witness buoyant growth across platforms. A good consumption story in India is driving robust growth in media businesses. While advertising spends continue to rise in India fuelling healthy growth for all media platforms - including television, the bigger driver of positive change is the wholehearted adoption of digital distribution technology, largely DTH, by consumers across the country. This is the big game changer for television business in India and would create a more sustainable business model for the industry. During the six months ended September 2010, India added 5.3 million digital homes on DTH alone and the DTH subscriber base has gone up to 26 million.”

Commenting on the second quarter results of the Company, Chandra added “We had a commendable second quarter performance and Zee has delivered good operating results across genres and across languages. I am confident that Zee is well placed to take advantage of the growth opportunities that this sector provides. We have a strong balance sheet to grow our business both organically and inorganically.”

Punit Goenka, Managing Director and Chief Executive Officer, ZEEL, commented, “The performance of Zee Network has been very satisfactory on all parameters, including advertising & subscription. We have delivered strong improvement in operating margin on our business excluding sports. During the quarter, our advertising revenues have grown robustly by 66%, and we have seen healthy growth in cable revenues as well as continued strong performance from the DTH segment.”

Elaborating on the sports business, Goenka said, “We are making renewed investments in our sports business. During the quarter we have launched Ten Cricket, a cricket focused sports channel, and also Ten Action+, which is focused on soccer. Because of the initial launch expenses and an effort to aggressively expand our portfolio, our sports business margins have been lower. Partly, this has been due to delay in launching Ten Cricket. We continue to make efforts to increase opportunities of monetizing sports better, and are hopeful of improved performance in the future. Competition continues to be intense in the industry, but we are confident of our team’s ability to deliver quality content and enhance our market share.”

“I am happy to inform you that during the quarter, Zee Entertainment has been selected Business Superbrands 2010-11” Goenka added.

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