Q1-17: Zeel numbers up on higher ad, subscription revenue, PAT up 22 percent

BENGALURU: The Subhash Chandra led content and broadcast player Zee Entertainment Enterprises Limited (Zeel) reported a 19.2 per cent  hike in consolidated revenue for the quarter ended 30 June 2016 (Q1-17, current quarter) as compared to the corresponding quarter of the previous year. The growth was driven by a 19.2 percent growth in Zeel’s advertising (ad) revenue, supplemented by a 14.2 percent growth in subscription revenue. Zeel reported consolidated revenue (Total income from operations, TIO) of Rs 1,571.62 crore in Q1-17 as compared to Rs 1,326,68 crore in Q1-16.

Profit after tax (PAT) for the current quarter increased 21.8 percent to Rs 216.96 crore (13.8 percent margin) as compared to Rs 178.18 crore (13.4 percent margin) in Q1-16.

Ad revenue in the current quarter was Rs 911.98 crore (58 percent of TIO) as compared to Rs 765.33 crore (57.7 percent of TIO) in Q1-16. Subscription revenue in the current quarter was Rs 528.16 crore (33.6 percent of TIO) as compared to Rs 462.53 crore (34.9 percent of TIO) in Q1-16.

Zeel’s Operating profit (EBITDA) for Q1-17 stood at Rs 453.15 crore (28.8 percent EBITDA Margin) which was 44.1 percent higher than the Rs 314.57 crore (23.7 percent EBIDTA margin) in the corresponding year ago quarter.

Total Expenditure in Q1-17 increased 11.2 percent to Rs 1,143.58 crore (72.8 percent of TIO) from Rs 1,028.21 crore (77.5 percent of TIO) in Q1-16.

Finance costs in the current quarter declined 2.6 percent to Rs 7.5 crore (0.5 percent of TIO) from Rs 7.7 crore (0.6 percent of TIO) in the corresponding year ago quarter.

Employee benefit expense in Q1-17 increased 14.1 percent to Rs 149.93 crore (9.5 percent of TIO) from Rs 131.40 crore (9.9 percent of TIO) in Q1-16.

Advertising and Publicity expense in the current quarter increased 23.9 percent to Rs 119.71 crore (7.6 percent of TIO) from Rs 96.65 crore (7.3 percent of TIO) in Q1-16.

Company Speak

Chandra added, “The financial results once again highlight the strong underlying fundamentals of the company. The advertising and subscription revenues continue to drive the company’s growth. Taking a long term view of the business trends we are committed to become a global content company and will make suitable investments to achieve that objective.”

Zeel managing director and CEO Punit Goenka, Managing said, ““We have started the new fiscal on a positive note, delivering successful result in the first quarter. On the back of continued steady economic recovery, the company once again managed to outperform the market. The advertising growth is holding up and the subscription revenue is maintaining a steady growth. While the advertising could receive a fillip if the consumer spending improves, on the subscription front the industry awaits the regulatory guidelines which will shape the subscription revenue growth over the next few quarters.”

The preference of the consumers keeps on evolving with time and we have consistently stayed ahead of the curve, and in many cases helped shape it. As an entertainment company, it is imperative for us to experiment with new content and innovate new formats, and we will continue to do so. We are making investments in new growth verticals with an aim that they will start contributing to company’s success in the future. An effort in this direction was the relaunch of company’s paid OTT platform dittoTV with new subscription plans. Our movie production business has started delivering results which is evident with movies like Sairat which became the highest grossing Marathi movie of all time.”

Note: (1) The unit of currency in this report is the Indian rupee - Rs (also conventionally represented by INR). The Indian numbering system or the Vedic numbering system has been used to denote money values. The basic conversion to the international norm would be:

(a) 100,00,000 = 100 lakh = 10,000,000 = 10 million = 1 crore.

(b) 10,000 lakh = 100 crore = 1 arab = 1 billion.

(2) All numbers in this report are consolidated unless stated otherwise.


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