MUMBAI: Zee News Ltd (ZNL) has ZNL's advertising revenue rose six per cent despite reducing ad inventory of its flagship Hindi news channel Zee TV by 30 per cent in a tough economic environment.

Subscription, however, fell and consolidated net profit dropped 21 per cent for the first quarter ended 30 June 2012 over the earlier year.

Net profit stood at Rs 40.1 million compared to Rs 50.8 million a year ago.

Operating revenue rose 8.2 per cent jump to Rs 688.8 million. Expenses, however, jumped 13.5 per cent to Rs 635.4 million.

Ad revenue grew to Rs 463.2 million for the fiscal first quarter, from Rs 436.4 million a year ago. Subscription revenue fell three per cent to Rs 176 million.

"We saw ad revenue growth of 6 per cent in this sluggish market while cutting inventory on Zee News. Some of the regional news channels saw growth while the business news segment is affected by the slowdown. The real growth in subscription revenues is higher as they are booked net of expenses. We see subscription revenues bouncing back this quarter," said Zee News Ltd CEO Barun Das.

Ebitda for the first quarter fell 30.3 per cent to Rs 53.4 million, down from Rs 76.6 million in the year-ago period.

ZNL posted Ebitda profit of Rs 113 million from its existing business (Zee News, Zee Business, Zee 24 Taas, Zee Punjabi and 24 Ghanta). However, in the earlier year, Ebitda was stronger at Rs 139.1 million.

The company also managed to narrow the Ebitda loss from its new businesses (Zee 24 Ghantalu, Zee News UP) to Rs 59.6 million compared to the Ebitda loss from the new business at Rs 62.5 million a year ago.

Among the expenses, the cost of goods and operations jumped 25 per cent, while other expenses jumped 12.1 per cent.

The delay in digitisation has impacted ZNL. Said ZNL MD Punit Goenka said, “This has been a speed bump in improving the business models of television news broadcasters. While the delay is certainly disappointing, our existing strength in subscription revenues should see us through this period of transition. Our new strategic Initiatives plan is in place to leverage increased viewer choice as well as improved business model post cable digitisation. Meanwhile, we continue to ensure that the brand salience of the individual channels in news network is maintained and strengthened through our various marketing activities.”