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Zeel net profit up by 31.4% YoY for Q1FY19 at Rs 3,264 mn

The company recorded 22.3% growth in advertising revenue and 12.3% growth in subscription revenue

Zee Entertainment Enterprises Limited (Zeel) has reported 31.4% growth in its net profit on YoY on the back of healthy advertising revenue growth and stronger EBITDA margin for the quarter ended June 30, 2018. The net profit stood at Rs 3,264 mn in Q1FY19 as compared to Rs 2,484 mn in the corresponding quarter of the previous year.

Advertising revenue for the quarter was Rs. 11,460 million, recording a growth of 18.6% YoY. Domestic advertising revenue grew by 22.3% YoY to 10,870 million. International advertising revenue for the quarter was Rs 590 million.

Subscription revenue for the quarter was Rs 5,186 million. Domestic subscription revenue grew by 12.3% YoY to Rs 4,252 million. International subscription revenue was Rs. 934 million.

EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) for the quarter stood at Rs 5,657 million and EBITDA margin stood at 31.9%.

For the first quarter of fiscal 2019, Zeel reported consolidated revenue of Rs 17,720 million.

Subhash Chandra

Subhash Chandra, Chairman, Zeel, commented, “The year has commenced on a positive note, for both the company as well as the economy. Government initiatives to aid the farming sector, coupled with the normal monsoon for the third successive year is encouraging for the rural economic growth. The growth in consumption, now being driven by rural as well, bodes well for advertising spends. In addition, increasing availability and adoption of digital medium, across different sectors, will have a positive effect on the country’s growth trajectory.”

Punit Goenka

Punit Goenka, Managing Director & CEO, Zeel, commented, “We are happy with the all-round performance of our portfolio during the first quarter of this fiscal. Our domestic advertising growth of 22% was driven by higher ad spends across categories and increase in our network viewership share. Based on our discussions with the advertisers and the visibility on ad campaigns, we believe that the ad growth for the industry could be higher than the initial estimates for this financial year.

On the subscription front, TRAI has notified that the new tariff order will come into effect starting January 2019. We have started discussions with our distribution partners for seamless transition to the new regime. If implemented as envisaged, the regulation would be beneficial for all the stakeholders and could be a catalyst for ARPU growth. Even under the new regime we will be able to grow our subscription revenue at a healthy pace.

ZEE5, our digital OTT offering, is already amongst the top-5 digital entertainment platforms in India. We are confident that the pace of subscriber addition will further accelerate with the roll-out of original content and exclusive movie premieres. We are on track to be the largest producer of digital content in the country and are committed to make ZEE5 the No. 1 entertainment destination for digital consumers.

Our domestic broadcast portfolio further increased its market share and continues to be the leading television entertainment network in the country. The increase in viewership share is across the markets with strong traction particularly in our regional channels. We believe that there is still room for monetising the increase in market share, which will allow us to grow ahead of the market.”

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