ZEEL reports steady Q1 FY2018 results

MUMBAI: It’s been a hectic first quarter of FY 2018 for homegrown media power house -- the Essel Group promoted Zee Entertainment Enterprises Ltd (Zeel). The company has gone ahead for some corporate restructuring and has also declared its Q1FY2018  financials which, if not impressive, at least deserve a pat on the back, at a time when industry is coping with the GST transformation that the government has imposed on the industry.

First, on to the financials. Q1 2018.

On a consolidated basis, Zeel has notched up total revenues of Rs 1540.3 crore (Rs 15.4 billion),  an EBITDA of Rs 484.4 crore (31.4 per cent margin) and profit after tax (PAT) of Rs 251.6 crore (16.3 per cent margin).

Advertising revenues for Q1 FY2018 are at Rs 966.5 crore (Rs 9.67 billion), which after adjustment for the acquisition of Reliance Broadcast Network Ltd (RBNL) and the sale of its sports business to Sony Pictures Networks India, was at Rs 868.8 crore.

Its international advertising revenue was at Rs 57.8 crore for the quarter.

Subscription revenues for Q1 2018 were at  a healthy Rs 479.1 crore. Domestic revenue from subscription grew a healthy 14.5 per cent to Rs 378.88 crore – showing that the network is starting to bear the fruits of the government-backed Indian television industry’s digitization drive. International subscription revenues were at Rs 100 crore (Rs 1 billion).  Overall, its international revenues (excluding sports business) were at Rs 194.7 crore, including other sales and services of Rs 36.9 crore.  The adverse impact of currency appreciation and region-specific issues have contributed to the decline in revenues, says a Zeel press release.

Qualifying Zeel’s performance managing director & CEO Punit Goenka said: “It was yet another satisfying quarter with a strong financial and operating performance. During the quarter, we recovered from the impact of demonetization and the growth in the first two months was strong. However, the momentum was disrupted in June in the run-up to GST implementation. The advertisers reduced ad spends on existing brands and launched fewer products as distribution chain was not fully prepared for seamless transition to the new regime. Despite the challenge, our domestic ad revenue grew by 7%. Notwithstanding the short-term impact, we believe that GST will aid the advertising spends in the long-run.”

Zeel completed the acquisition of the remainder 49 per cent equity stake in Indiaweb Portal which runs a clutch of online sites, apart from Fly By Wire International Pvt Ltd post 30 June 2017. Both have become wholly owned subsidiaries.

Goenka says the acquisition of India Webportal “which is the third ranked online content publisher in the country, gives us an opportunity to reach and understand digital consumers through its various offerings. The acquisition is part of our strategy to strengthen the digital presence. It operates a suite of websites focusing on different genres including news, sports and entertainment."


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