Zeel Q3'17 profit up 10% YoY

The company records an EBITDA margin of 31.5 per cent while its profit after tax stands at Rs 2,549mn with a PAT margin of 15.6 per cent

BestMediaInfo Bureau | Delhi | January 25, 2017

The Board of Directors in its meeting held on Tuesday took on record the unaudited consolidated financial results of Zee Entertainment Enterprises Limited (ZEEL) (BSE: 505537, NSE: ZEEL.EQ) and its subsidiaries for the quarter that ended on December 31, 2016.

ZEEL reported consolidated revenue of Rs 16,391 million for the third quarter of fiscal 2017. Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) was at Rs 5,158 million. Profit after tax (PAT) for the quarter was Rs 2,549 million. The EBITDA margin for the quarter stood at 31.5 per cent and the PAT margin was 15.6 per cent.

According to the Q3 results, advertising revenue for the quarter was Rs 9,554 million, recording a growth of 3.4% over the same period last year. Domestic advertising revenue grew at 3.7 per cent to Rs 8,737 million while international advertising revenue stood at Rs 817 million.

Subscription revenue at Rs 5,935 million for the quarter ended on December 31, 2016 that grew by 13.7 per cent over Q3FY16. Domestic subscription revenue stood at Rs 4,818 million while international subscription revenue stood at Rs 1,117 million.

EBITDA for the quarter stood at Rs 5,158 million registering a growth of 20.1 per cent over Q3FY16. EBITDA margin stood at 31.5 per cent

In terms of new initiatives, the company launched HD feed of three regional channels, taking the count of non-sports HD channels to nine. During the quarter, the company got into an agreement with Reliance Broadcast Network Limited (RBNL) to acquire its television broadcasting operations. On conclusion of the transaction, RBNL's two channels – Big Magic (Hindi GEC) and Big Ganga (Bhojpuri GEC) -- will form a part of its portfolio along with four television broadcasting licenses.

Subhash Chandra

Subhash Chandra, Chairman, ZEEL, said, “The government's decision to demonetise high value currency had an impact on businesses across sectors. Notwithstanding the short-term disruption caused by demonetisation, we believe that it is a step in the right direction. Demonetisation along with implementation of GST and push towards cashless economy would help country's long-term growth.”

Commenting on the results of the company, Chandra added, “The result once again demonstrates our commitment towards profitable growth and enhancing shareholders' wealth. Despite the impact of demonetisation, we have delivered growth in advertising revenues and growth in subscription revenues remained strong. We believe the adverse impact of demonetisation is transient and with a strong portfolio of national and regional channels, we are confident of delivering sustainable growth.”

Punit Goenka

Punit Goenka, Managing Director & Chief Executive Officer, ZEEL, commented, “We are happy to deliver another quarter of strong profit growth in a challenging environment. Despite the impact of demonetisation on our advertising revenues, we have improved our EBITDA margins. This highlights our ability to manage costs to drive profitable growth on a consistent basis.”

“Acquisition of broadcasting business of RBNL is in line with our strategy to expand our offering in key genres and focus on regional space. Big Magic, a comedy channel, will complement our Hindi GEC portfolio. Big Ganga, the leading Bhojpuri channel, will give us entry into the attractive Bhojpuri market. We are confident that these two channels will benefit immensely from the strength of our network,” Goenka said.

“The deceleration in our advertising revenue growth during the quarter is largely attributable to demonetisation. Advertisers' willingness to invest in their brands remains intact. However, the timing of spends has been re-calibrated to an extent to suit the change in dynamics due to demonetisation. As economic situation is normalising, ad spends have already started moving up from December levels,” Goenka said.

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