ZEE Q3 results reflect pressure on ad revenues

The company reported consolidated revenue of Rs 7,548 million and PBT of Rs 2,243 million. Ad revenues showed a de-growth of 10.1 per cent y-o-y

BestMediaInfo Bureau | Delhi | January 23, 2012

For the third quarter of fiscal 2012 (ended December 31, 2011), Zee Entertainment Enterprises Limited (ZEE) has reported consolidated revenue of Rs 7,548 million. The consolidated operating profit (EBITDA) for the quarter stood at Rs 2,160 million and PBT was Rs 2,243 million.

The EBITDA margin for the quarter stood at 28.6 per net and the PBT margin was 29.7 per cent.

Advertising revenue for the quarter stood at Rs 3,955 million, a de-growth of 10.1 per cent y-o-y. Advertising revenue has remained flat on q-o-q basis.

ZEE's sports business revenue during the quarter was Rs 901 million, while the operating losses were at Rs 100 million.

Addressing the board at Macau on Friday last, Subhash Chandra, Chairman, ZEE, said, “While the world economy goes through another round of upheaval, the Indian economy continues to grow, though at a slower pace. Advertising trend continues to be slower than expected. However, the television economy continues to grow on the back of higher subscriber growth and increasing digitisation.”

Chandra added, “So far in fiscal 2012, 8.5 million subscribers have adopted satellite based television services via DTH. With the implementation of Digital Addressable System, as per the announced timelines, there would be accelerated conversion from analog to digital subscribers. A good part of the subscriber base could also come from adoption of digital cable. With Digital Addressable System being implemented, the Cable and DTH industry has a great opportunity to consolidate the distribution business. I believe that over the next four to five years, the television distribution business can evolve to a more transparent, organised and service oriented industry, if the digitisation process is implemented well.”

Punit Goenka, Managing Director and CEO, ZEE, said, “Zee Entertainment's wide portfolio of television channels had some gains and some losses in market shares during the quarter. We are confident that we would regain the market share losses through our planned content lineup and continue to grow our business profitability in a sustained manner. During the quarter, we have been able to maintain healthy operating margins, partly due to lower sports losses and partly due to better cost efficiency measures. Advertising spends are flat sequentially, and the overall trends also remain subdued. Our strategy during the last few years has been to create a formidable entertainment enterprise and invest in the business in a focused disciplined way.”

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