Zeel reports higher numbers on improved ad, subs revenues

Zeel reported a 15 per cent YOY growth in total revenue for the quarter ended 30 June 2018

BENGALURU: The Subhash Chandra-led Zee Entertainment Enterprises Ltd (Zeel) reported a 15 per cent year on year (y-o-y) growth in total revenue for the quarter ended 30 June 2018 (Q1 2019, period, or quarter under review) as compared to the corresponding year ago quarter (Q1 2018). The company’s advertisement revenue increased 18.6 per cent y-o-y in Q1 2019, while its subscription revenue increased 8.3 per cent y-o-y. Zeel’s total revenue in Q1 2019 was Rs 1,772 crore as compared to Rs 1,540.3 crore in the corresponding year ago quarter. Advertisement revenue during the quarter under review increased to Rs1,146 crore from Rs 966.5 crore in Q1 2018. Subscription revenue increased to Rs 518.6 crore in Q1 2019 from Rs 479.1 crore in Q1 2018. Other sales and services increased 13.4 per cent y-o-y in Q1 2019 to Rs 107.4 crore from Rs 94.7 crore in Q1 2018.

Operating profit (EBITDA) during the period increased 16.8 per cent y-o-y to Rs 565.7 crore from Rs 484.4 crore in Q1 2018. Profit after tax (PAT) increased 31.4 per cent to Rs 326.4 crore in Q1 2019 rom Rs 248.4 crore in Q1 2018.

International Business

Zeel reported international business revenue in Q1 2019 of Rs 195.1 crore. International advertisement revenue grew 2.1 per cent y-o-y to Rs 59 crore. International subscription revenue in Q1 2019 was 6.6 per cent lower at Rs 93.4 crore. The company reported other sales and services revenue of Rs 42.7 crore from its international business.

Company speak

Zeel chairman Chandra said, “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.”

Zeel managing director & CEO Punit Goenka said, “We are happy with the all-round performance of our portfolio during the first quarter of this fiscal. Our domestic advertising growth of 22 per cent 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," added Goenka.

“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 #1 entertainment destination for digital consumers,” revealed Goenka.

“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,” assured Goenka.

Let us look at the other numbers reported by Zeel

Total expenditure during the period under review increased 14.3 per cent to Rs 1,206.4 crore in Q1 2019 from Rs 1,206.4 crore from Rs 1,055.9 crore in Q1 2019. Employee benefit expense increased 2.7 per cent y-o-y in Q1 2019 to Rs 171.38 crore from Rs 166.89 crore in Q1 2018. Operational cost in the quarter under review increased 14 per cent y-o-y to Rs 668.32 crore from Rs 586.34 crore in Q1 2018.

Finance costs declined by 64 per cent y-o-y in Q1 2019 to Rs 5.29 crore from Rs 14.7 crore during the corresponding period of the previous year. Other expenses increased 26.9 per cent y-o-y in quarter under review to Rs 226.52 crore from Rs 178.57 crore in Q1 2018.

The company incurred 60 per cent lower fair value loss on financial instruments at fair value through profit and loss for Q1 2019 at Rs 21.29 crore as compared to Rs 53.21 crore in Q1 2018.

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