MUMBAI: Zee News Ltd (ZNL) has posted a fiscal third-quarter consolidated net profit of Rs 99.7 million (after minority interest), even as its advertising revenue has degrown marginally compared to the year-ago period.

Advertising revenue dipped 4.2 per cent as the effect of festival season overlapped with previous quarter. Subscription income, however, grew 3.7 per cent growth.

ZNL said that the real growth in subscription revenues was higher as they were booked net of expenses.
“This change was necessitated due to the formation of Media Pro, a joint venture, which pays subscription revenues to Zee, net of expenses. Hence, the numbers are not comparable to those of corresponding period last year,” it said.

The company posted a revenue of Rs 782.74 million for the three-months ended 31 December, up 5.1 per cent.

ZNL’s Ebitda margin was at 24.6 per cent, compared to 18.1 per cent in the corresponding quarter of the previous fiscal. This includes the losses from the new business. The margins stand at 33.3 per cent for the existing businesses.

ZNL had posted a net profit of 618.4 million for the third-quarter of FY'11 on a revenue of Rs 744.44 million.

The company, which operates the news channels of the Zee brand, said that the corresponding quarter financials are not comparable as it discontinued the Tamil channel Zee Tamil on 31 March last year.

ZNL chairman Subhash Chandra said, “The Indian economy has been facing headwinds of increased inflation, interest rate hikes and bearish markets forcing the GDP growth forecast to pare down to 7 per cent or so. My faith in the Indian economy for the long term remains intact. While there are as many views of impending slowdown in the economy as there are of bounce back, I remain cautiously optimistic in the short run that the situation is likely to improve in the next few quarters. The Company continues with its focus on innovative growth and I have full confidence that we will be able to come out stronger than most in the current year, in line with the trend of our past performances.”

He added, “As has been pending for a few years, the media industry has begun to consolidate. This is obvious from the various deals being announced over the past few months. We see this consolidation as a confident step forward towards making this industry more profitable.”

ZNL MD Punit Goenka added, “While the investment related policy decisions have been under pressure due to current political environment, Parliament’s clearing of cable digitisation signals the establishment’s commitment to make the media industry more efficient. The ad industry, meanwhile, has been hit as the advertisers have increasingly become choosy about their spends. The euphoria of a sustained industry growth which was prevalent at the beginning of the year has been dampened considerably. However, ZNL has shown exceptional operational efficiencies and posted strong financial results for the quarter. Going forward, we hope to maintain the edge in our performance.”

Ebitda for the quarter under review stood at Rs 192.7 million and profit before tax at Rs 162.4 million. In the previous year quarter, Ebitda was Rs 134.5 million and PBT Rs 103.6 million.

ZNL's advertising revenue stood at Rs 518.8 mn for the quarter ended 31 December, as compared to Rs 541.7 million in the year ago period. Subscription revenue for the quarter was at Rs 192.7 million, which constituted 24.6 per cent of the total revenue.

The expenses of the company stood at Rs 590 million, slightly lower as compared to the year-ago period when the expenses were Rs 609.9 billion.

ZNL posted Ebitda profit of Rs 249.8 million (225.2 million in the year ago period) from its existing business (Zee News, Zee Business, Zee 24 Taas, Zee Punjabi and 24 Ghanta). The company’s Ebitda loss from new business has come down to Rs 57.1 million (from a loss of Rs 90.7 million in the year ago period) from its new business (Zee 24 Gantalu and Zee News UP).

ZNL CEO Barun Das said, “We had sensed the slowdown in the industry by the beginning of the last quarter and made adjustments in our operations accordingly. Our top lines and strict vigil on our costs has resulted in our margins being strong at 24.6% despite slowdown, which is likely to be an exception. With the Media Pro initiative settling down, our subscription revenue has shown growth towards the end of the quarter and it is a trend that is likely to continue. We remain confident regarding our ability to grow in the current financial year."