ZEE reports higher PAT, ad revenues in Q3 FY14

The network's consolidated revenue was at Rs 11, 884 million; network viewership has grown, ZEE Anmol adds to network strength



BestMediaInfo Bureau | Mumbai | January 23, 2014

Zee Entertainment Enterprises (ZEE) announced its third quarter results yesterday. For the quarter ended December 2013 of FY14, the company's consolidated revenue stood at Rs 11,884 million, growing by 26.6 per cent compared to the corresponding previous quarter. Operating profit (EBITDA) for the quarter stood at Rs 2,907 million, up by 11.3 per cent over Q3FY13.

ZEE's profit after tax (PAT) was at Rs 2,136 million, a jump of 10.5 per cent over the Rs 1,933 million reported in Q3FY13. Net profit for the period stood at Rs 1,583 million, significantly down from Rs 1,914 million reported in the corresponding period a year ago.

Advertising revenues for the quarter were Rs 6,843 million, recording a growth of 34.3 per cent over Q3FY13.

Subhash Chandra, Chairman, ZEE, stated, “India's economic health continues to remain precarious. Given this background, the growth of India's Media & Entertainment industry has been heartening. The industry has shown a robust growth in 2013 and is expected to record double-digit growth in 2014 as well. While the overall economic environment stays challenging, ZEE continues to grow its business at a healthy pace. The network shares are on an uptrend, buoyed with the addition of new channels in the network. Our investments in the sports business continued during the quarter. We also look to expand our portfolio to take advantage of the growth opportunities ahead of us. These investments are in line with our philosophy of enhancing long term shareholder value.”

Punit Goenka, MD and CEO, ZEE, commented, “ZEE has had a satisfactory quarter on the operational front. During the quarter, we have seen robust growth in our network's viewership share. The two new launches – &pictures and Zee Anmol – have made handsome gains and have added to the network strength. The company has shown a healthy increase in advertisement revenues even though there has been a reduction in inventory across the board as per TRAI regulation. Once again we have outperformed the television industry advertising revenue growth and have delivered 34 per cent yoy growth supported by good contribution from the sports business. Operating margins were lower due to higher losses in sports business because of a heavy event calendar. Rupee depreciation earlier this year has also had a negative impact on the sports business performance. We are hopeful of improved sports performance in the years ahead.”

Commenting on the advertising inventory regulation, Goenka said, “This quarter saw the implementation of advertising inventory cap as per TRAI regulations. From October 1, 2013, we have reduced ad inventory to 12 minutes per clock hour across our network. We are glad to report that the transition has been reasonably smooth. Ultimately, ad inventory reduction is better value to both consumers and advertisers. I believe that a cap on advertising, while being negative in the short-term especially for smaller broadcasters, will in the long term prove beneficial for the industry by restricting inventory and eventually raising value.”

Speaking about the outlook for the business, Goenka continued, “The rollout of digitisation, even though with some delays, is a very good development for the industry and will provide new growth opportunities. Digitisation will lead to fragmentation of audiences. At ZEE, we believe this presents a huge opportunity to create new products for specific segments. Barring the short-term impact of reduction in inventory, advertising spends on television are expected to grow in healthy double digits over next many years. Rollout of BARC ratings system is expected to give it a positive fillip.”

Info@BestMediaInfo.com

Info@BestMediaInfo.com