Zee’s strong Q1 growth buoyed by advertising & subscription revenues

Zee Entertainment Enterprises has reported its Q1 FY2017 consolidated revenue of Rs 15,716 million. The consolidated operating profit (EBITDA) for the quarter stood at Rs 4,532 million. Profit after tax (PAT) for the quarter was Rs 2,181 million. The EBITDA margin for the quarter stood at 28.8 per cent, while the PAT margin was 13.9 per cent.

Zee’s advertising revenues during the quarter were Rs 9,120 million, showing an increase of 19.2 per cent y-o-y. Total subscription revenues for the quarter were Rs 5,282 million. During the current quarter, domestic subscription revenues stood at Rs 4,179 million, registering a growth of 13.5 per cent over the corresponding period last fiscal, while international subscription revenues were Rs 1,103 million, up 16.7 per cent over last fiscal.

Other sales and services include syndication sales, film distribution, commission on sales, play out & transmission services, facility usage income among others. During the quarter, other sales and services stood at Rs 1,315 million. The company had recorded revenue of Rs 988 million under this head during the corresponding period last fiscal.

Consolidated operating revenues for the first quarter of FY2017 stood at Rs 15,716 million, recording a growth of 18.5 per cent on a y-o-y basis. Operating profit (EBITDA) for the quarter ended June 30, 2016 was Rs 4,532 million. EBITDA margin for the quarter stood at 28.8 per cent. Profit After Tax (PAT) for the quarter ended June 30, 2016 was Rs 2,181 million. PAT margin for the quarter stood at 13.9 per cent.

Operating cost in the quarter was Rs 6,575 million, compared to Rs 6,041 million in the corresponding period last fiscal, an increase of 8.8 per cent. Employee cost for the quarter stood at Rs 1,499 million, going up by 14.1 per cent over the corresponding period last fiscal. Selling & other expenses in the quarter were at Rs 3,110 million, compared to Rs 2,766 million in the corresponding period last fiscal, registering an increase of 12.4 per cent. Total costs incurred by the company in this quarter were Rs 11,185 million, an increase of 10.5 per cent over the corresponding period last fiscal.

During the quarter, the company acquired 49 per cent equity stake in Fly-by-Wire International; and 100 per cent equity stake in Zee Unimedia. Additionally, Asia TV, UK, a step-down wholly-owned overseas subsidiary of the company formed as wholly owned-subsidiary Asia TV GmbH in Germany.

Zee’s international business continued to perform strongly driven by global demand for its products. Zee intends to continue to grow this business and ensure timely and appropriate investments to capitalise on this opportunity. For the quarter ended June 30, 2016 the international business did:

• Advertisement revenue of Rs 705 million
• Subscription Revenue of Rs 1,103 million
• Other Sales and Services of Rs 598 million
• Total Revenue of Rs 2,406 million

Commenting on the results of the company, Dr Subhash Chandra, Chairman, Zee, said, “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.”

Punit Goenka, Managing Director & Chief Executive Officer, Zee, commented, “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.”

He further said, “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.”