ZEE reports higher revenue and profit in Q2 FY13

PAT for the quarter ended September 30, 2012 was Rs 1,875 million, a growth of 17.2 per cent over the previous quarter. Ad revenues were also up 33 per cent

BestMediaInfo Bureau | Delhi | October 23, 2012

Zee Entertainment Enterprises Ltd has reported second quarter fiscal 2013 (ended September 30, 2012) consolidated revenue of Rs 9,535 million. The consolidated operating profit (EBITDA) for the quarter stood at Rs 2,176 million and PAT was Rs 1,875 million. The EBITDA margin for the quarter stood at 22.8 per cent and the PAT margin was 19.7 per cent.

Advertising revenues for the quarter were Rs 5,281 million, a growth of 33.7 per cent over Q2 FY12. The sports business has been a significant contributor to this growth.

Subscription revenues were Rs 3,950 million for the quarter. Domestic subscription revenues stood at Rs 2,808 million, while international subscription revenues were Rs 1,141 million.

Subhash Chandra, Chairman, ZEE, said, "General  business sentiments  are expected to turn positive  following    a slew of reforms  announced  by the government  including  fuel price   reforms,   relaxing   FDI   norms   in   retail,  aviation   and   broadcasting,  revival   of disinvestment  process  and  ease  of  fund  raising.  The  move  to  increase  foreign  direct investment  limits in the television distribution space  will allow  increased  access  to capital for rollout of digitisation.  By November 1, four metro cities in Phase I of digitisation are expected to switch over from analog to digital. We are very confident that with successful implementation of digitization, the television ecosystem will benefit immensely."

Commenting on the second quarter results of the company, Chandra added, "This quarter the company has continued to build on the momentum set in the first quarter. This has been on the back of several initiatives taken across businesses which have been well received by consumers. As I look back at our journey in the last 20 years since  the launch of Zee TV, I am happy  that we have not only been able to build Zee as a leading brand  in the  minds  of  consumers, but  also  create  a  company   which  is  focused  on  delivering superior  returns to  its shareholders.  We look forward to continuing our investment in the television media space and take advantage of the growth opportunities ahead of us."

Punit Goenka, MD and CEO, ZEE, commented, "ZEE has had a commendable quarter on the operational front. ZEE's flagship channel Zee TV improved its average weekly GRPs in 2QFY13 as well, marking a third consecutive quarter of improvement. Our portfolio has seen improvement in revenues both in terms of advertising and subscription. We have also continued our investment in content, both in increasing the hours of original programming as well as launching new products. This has consequently impacted operating margins in the short term.  The overall response to the new shows launched during the quarter has been very encouraging and we look forward to further engaging the viewers with new and fresh programming ideas."

"In line with our strategy of further strengthening our position in the regional markets, we launched Zee Bangia Cinema, a 24-hour Bengali movie channel, in this quarter. With over 400 exclusive titles under its belt, Zee Bangla Cinema offers a mixed bag of commercial blockbuster and alternative cinema. This quarter also saw the launch of Zee Alwan, an Arabic GEC channel, as part of our international growth strategy. Zee Alwan is a unique channel aimed at Arab family audiences, showcasing a diverse choice of Arabic serials and popular Indian TV serials dubbed in Arabic," Goenka said.

Commenting on the business outlook, he added, "The rollout of digitisation is a very good development for the industry and will provide new growth opportunities. While this year, the  industry advertising spends seem to be impacted due to macroeconomic factors, we are confident of continued double-digit growth of television advertising spends over the next few years. At ZEE, we have created a good portfolio of assets and will continue to make prudent investments with a clear focus on returns over the long term."

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