Zee Telefilms notches up better than expected FY 2000-2001 showing

Zee Telefilms never ceases to surprise you. And its latest financial results for the year 2000-2001 must be surely making many an industry watcher shake their heads in disbelief. But the results are there for all to see. Still, one will have to wait for the Annual Report to make more sense of the financials.

But for the nonce, one will have to complement the Subhash Chandra-led management for what can be called a better than expected performance at a time when everyone had been writing Zee TV's obit.


Total income for Zee Telefilms is up 68 per cent to Rs 4.35 billion (RS 2.97 billion) aided by a hefty increase in other income to RS 511.11 million (RS 100.8 million). Net profit is up 59 per cent to RS 1.38 billion (RS 822.5 million).

A point to note is that the company's investment in programming has risen this year by a healthy 30-odd per cent to RS 1.81 billion from RS 1.31 billion in the previous year. It shows that the company is going back to basics - focusing on content.

A dividend of 55 per cent has been recommended by the management, which should keep shareholders - who have been bruised by the downslide in the share price - in some cheer.


Zee Telefilms figures for Q4 2001 show that total income is up 57 per cent to RS 1,364.4 million (RS 780.9 million in Q4 2000) while programming costs have more than doubled to RS 647.6 million (RS 299.3 million). Net profit has more than doubled to RS 472.9 million (RS 203.9 million).


The Zee Network Financial Roundup


Looking at the Zee Network as a whole, total revenues have been far higher than predicted by market analysts with total income of RS 10.16 billion, an increase of 29.1 per cent over last year's figure of RS 7.87 billion. Q4 revenues have also shown a jump to RS 2.99 billion over last year's figure of RS 2.11 billion.


Breaking down the revenues, there have been significant increases in other sales (now what's that?) and interest earned. Looking at subscription and ad revenues separately, the increases have not been quite so significant. With Zee TV expected to go pay in the first half of June 2001, subscription revenues are expected to give a significant boost to the overall profitability of the company in the future.


However, it remains to be seen how ad sales will be impacted because going pay normally results in a loss of viewership as decoder boxes are rolled out nationally - with a concomitant loss in ad revenue. And considering the depressed market scenario there may even be a bigger fall in ad sales revenues than that.


Coming back to the figures. Ad revenues have gone up from RS 5.74 billion last year to RS 6.77 billion this year. Subscriptions have increased from Rs1.81 billion to RS 2.05 billion. Pretty healthy numbers for a channel that was supposedly in the dumps.


Figures for other sales show an increase from RS 203 million to RS 754.5 million. Other sales in Q4 went from RS 83.9 million to RS 345.2 million, an over 400 per cent increase. Interest income also saw a big jump. It went from RS 114 million to RS 585.8 million, a fivefold increase. Income increase in Q4 was even bigger - from RS 15.4 million to RS 206.1 million, that's 1,238 per cent more than last year.


As far as the results go, market analysts HSBC Securities & Capital Markets Ltd were the closest in their predictions of how the results would pan out (see earlier report).


All in all Zee seems to have done a neat number on all the naysayers who had written off its chances of making a comeback.


There was some activity on another front as well. Sandeep Goyal, the freshly inducted group broadcasting CEO, is now a whole time director of the company. And Rajeev Chandrashekhar, head honcho of consumer electronics major BPL LTD (with interests in a whole slew of other ventures) and Vipin Malik, a Delhi-based chartered accountant, have been inducted as additional independent directors. According to company officials, Malik was formerly on the board of the the Reserve Bank of India.

To read Zee Telefilms results fully as a pdf (Acrobat Reader) file click here. To download Acrobat Reader for Windows click here.

Chandra returns RS 500 million given to Essel Group investment firms


In another announcement, Zee Telefilms said that chairman Subhash Chandra said that he had returned RS 500 million of the RS 2500 million that had been transferred from ZTL to investment companies belonging to Chandra's Essel group for acquiring stakes in B4U and AB Corp. He is supposed to return the entire sum by 30 June 2001.

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