ZEE posts record growth of 25% in operating profit in Q1 FY14

EBITDA for the quarter stood at Rs 2,915 million. PAT for the quarter was Rs 2,239 million, a growth of 23 per cent

BestMediaInfo Bureau | Delhi | July 29, 2013

Zee Entertainment Enterprises Limited (ZEE) has reported consolidated revenue of Rs 9,733 million in Q1 (quarter ended June 30, 2013) of fiscal 2014. The consolidated operating profit (EBITDA) for the quarter stood at Rs 2,915 million, a growth of 25 per cent over the corresponding period previous fiscal. PAT for the quarter was Rs 2,239 million. The EBITDA margin for the quarter stood at 29.9 per cent and the PAT margin was 23 per cent.

Subhash Chandra, Chairman, ZEE, stated, “The economy during the quarter has continued to face challenges due to sharp depreciation in rupee against major currencies leading to elevated current account deficit, inflation and adverse fiscal deficit. Measures are being taken to curb excessive speculation, reduce volatility and stabilise the rupee. Growth remains weak during the quarter and only a marginal improvement in GDP growth is expected. In spite of this lackluster economic scenario, the television media industry has posted a comparatively robust growth on the back of sustained advertising spends by the consumer goods sector.”

Commenting on the new brand positioning of ZEE, Chandra said, “ZEE as a brand has global recognition today, and has grown exponentially over the years, establishing a strong connect in the minds and hearts of its audience globally. There was a definite need for a brand positioning statement which differentiates ZEE from the other global media brands, and establishes a strong emotional connect with its stakeholders. With this approach in mind, 'Vasudhaiva Kutumbakam' – The World is my Family – has been launched as the positioning for brand Zee, which conveys the message of creating a world without borders, castes, races and strangers, hence uniting everyone as a part of one family.”

Commenting on the Q1 results, Chandra said, “Our performance during the quarter reflects the investments that ZEE is making to grow its business and market share. This has been accompanied by a strong improvement in the operating performance of the company during the quarter. In a highly competitive space, ZEE continues to build its media assets and in the process continues to create value for the shareholders. We have a strong balance sheet and I am confident that we would take advantage of the growth opportunities ahead of us.”

Punit Goenka, Managing Director and CEO of ZEE, commented, “The first quarter of fiscal 2014 has been a good quarter both on operating as well as financial parameters. The subscription revenue during the quarter has shown robust increase with digitisation rollout, and will improve in the medium term. ZEE has maintained viewership share both in national and regional languages, which led to better advertising growth relative to the industry. During the quarter, we have been able to maintain healthy operating margins, driven by robust ad revenue growth and continuing monetization of subscription revenues. Sports performance for the quarter has been good but due to a heavy sports calendar and rupee depreciation, the business is expected to be in losses for some more time to come.”

Goenka added, “These are exciting times and we are witnessing a lot of changes in the industry landscape. The phased implementation of TRAI regulation with respect to advertising inventory on a clock-hour basis has started and is expected to be fully in place by the end of second quarter. DAS implementation in Phase I & II also moved a step further with MSOs making substantial progress in capturing consumer data and taking first steps toward implementing packaging.”

Speaking about the outlook for the business, Goenka said, “While the competitive intensity remains high in the Indian television industry, we continue to make efforts towards further enhancing our market share. At ZEE, we remain focused on delivering superior content to viewers and building a stronger relationship with our consumers. Also, our content-focused approach combined with better monetisation of subscription revenues will contribute to the company delivering steady returns in the years ahead.”

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