Broadcast income buoys Zee's revenues by 18%; digital footprint grows

Zee Entertainment Enterprises has reported an 18 per cent growth in its consolidated total revenues from Rs 51,115 million in FY2015 to Rs 60,531 million in FY2016 on account of higher broadcasting income.

Revenue from operations increased by Rs 9,678 million or 20 per cent – from Rs 48,837 million in FY2015 to Rs 58,515 million in FY2016. Overall growth was witnessed in advertisement revenues of Rs 7,694 million, registering a 29 per cent increase to Rs 34,297 million in FY2016, as against Rs 26,603 million in FY2015. Subscription revenue increased by Rs 2,644 million to Rs 20,579 million in FY2016 from Rs 17,935 million in FY2015.

Sales – media content includes syndication sale of sports rights, programmes and film rights, which has reduced by Rs 1,010 million to Rs 2,739 million in FY2016 from Rs 3,749 million in FY2015.

Other income decreased by Rs 262 million or 12 per cent – from Rs 2,278 million in FY2015 to Rs 2,016 million in FY2016. Decrease in other income is mainly on account of higher liabilities written back in previous year, aggregating to Rs 188 million and reduced profit on sale of investment by Rs 171 million.

Meanwhile, total operational expenditure increased by Rs 7,121 million or 20 per cent – from Rs 36,299 million to Rs 43,420 million. This increase in cost is attributable to higher content costs as well as the increase in administrative and marketing spends.

Profit before tax increased by Rs 1,777 million or 13 per cent, from Rs 14,040 million in FY2015 to Rs 15,817 million in FY2016.

Net profit after tax for the year increased by 5 per cent to Rs 10,267 million from Rs 9,775 million. The net profit margin is at 18 per cent in FY2016.

Commenting on the results, Dr Subhash Chandra, Chairman, Zee Entertainment Enterprises, said, “The financial year 2015-16 saw Zee take definite steps towards emerging as a global content company, with a strongly growing digital footprint.” He further said, “The global media and entertainment industry is expected to grow at a CAGR of 4 per cent during 2015-18 to reach around
US$ 2.3 trillion. This may seem modest in relative terms, but its absolute impact is significant. Not just that, the share of various media is constantly getting recalibrated with digital growing at the fastest rate.”

The introduction of BARC signalled a virtual reset for the television broadcasting viewership measurement, with rural audiences entering the consideration set for the first time. Zee quickly adapted to this change by moulding its content strategy to claim a higher viewership share. Zee has reported a network share of 17.9 per cent, with total viewership exceeding 1 billion.

The advent of digital has also meant a strategic shift from a broadcasting focus to a cross-platform strategy, with tailor-made content to specific audiences, operating in an ‘on-demand’ scenario.

Punit Goenka, MD & CEO, Zee Entertainment Enterprises, remarked, “Our growth has been ahead of the market growth trajectory, duly reflected in the growing viewership share of our network (17.9 per cent). We continue to see strong growth in both existing and new products. We reported consolidated revenues at Rs 58,515 million, representing a growth of 19.8 per cent over the previous year. Our consolidated operating profit (EBITDA) for the year stood at Rs 15,095 million, registering a 20.4 per cent growth and resulting in a margin of 25.8 per cent. The net profit for the year stood at Rs 10,267 million representing a margin of 17.5 per cent. Our performance was led by a robust growth in advertising revenues (28.9 per cent) and subscription revenues across domestic and international markets (14.7 per cent).”