ZEEL net profit up 148% in Q2FY18

Zee Entertainment Enterprises Limited (ZEEL) reported consolidated revenue of Rs. 1,582 crore for the second quarter of fiscal 2018, down 6.7 per cent from Rs 1,695 crore in the corresponding quarter of last fiscal year. However, the company posted total revenue of Rs 1,785.18 crore in Q2FY18, up 2.68 per cent from Rs 1,738.67 crore in Q2FY17.

With an EBITDA margin of 31 per cent, the company reported consolidated net profit of Rs 590.80 crore for the second quarter ended September 30, up 148 per cent from Rs 238.40 crore in the corresponding quarter last year.

Advertising revenue for the quarter was Rs 986.7 crore recorded a growth of 2.9 per cent. Adjusted for sports, domestic advertising grew by 10.1 per cent to Rs 934.6 crore. On a comparable basis (excluding sports, RBNL and IWPL), domestic advertising revenue grew by 5.8 per cent. International advertising revenue for the quarter was Rs 52.1 crore.

Subscription revenue for the quarter was Rs 501.4 crore. Adjusted for the sale of sports business, domestic subscription revenue grew by 7.2 per cent to Rs 404.3 crore. International subscription revenue stood at Rs 97.1 crore.

Punit Goenka

Punit Goenka, Managing Director & Chief Executive Officer, ZEEL, said, “We are satisfied with our performance against the backdrop of tough macro-economic environment during the quarter. Our advertisers were negatively impacted during transition to GST which led to a temporary pull-back on their ad spends. Post the decline in the first half of the quarter, the growth recovered strongly and is back on track. Despite the adversity, our domestic ad revenue grew at 5.8 per cent on a comparable basis.”

“The domestic subscription growth for the quarter was at 7.2 per cent. As against the early closure of deals last year, content deals with distributors are taking slightly longer due to litigation regarding the TRAI tariff regulation. However, our full year outlook for subscription growth remains unaltered. Despite the loss of advertising revenue and elevated expenses during the quarter, we have been able to deliver a healthy margin of 31 per cent,” added Goenka.

During the quarter, the company entered into a definite agreement to acquire six music channels from 9X Media and its subsidiaries. The channels include three Hindi music channels (9XM, 9X Jalwa, 9X Bajao) and one each in Punjabi (9x Tashan), Marathi (9x Jhakas) and English (9XO). The acquisition will significantly strengthen ZEEL’s television music portfolio in Hindi and regional languages. It will also complement the company’s movie and music business.

Zeel also launched two HD channels – Zee Tamil HD and premium English movie channels &privé HD – taking the count of HD channels to 11.

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