ZEEL declares its Q1 results for FY15

Zee Entertainment Enterprises Limited (ZEE) (BSE: 505537, NSE: ZEEL.EQ) reported its first quarter fiscal 2015 consolidated revenue of Rs 10,857 million. The consolidated operating profit (EBITDA) for the quarter stood at Rs 3,092 million, recording a growth of 6.1% over corresponding period of previous fiscal. PAT for the quarter was Rs 2,100 million. The EBITDA margin for the quarter stood at 28.5% and the PAT margin was 19.3%.

The Board of Directors in its meeting held, has taken on record the unaudited consolidated financial results of ZEE and its subsidiaries for the quarter ended June 30, 2014.
Q1 HIGHLIGHTS:

• Advertising revenues for the quarter were Rs 6,221 million, recording a growth of 17.4% over Q1 FY14.  Once again, ZEE has outperformed the industry growth rate which is in low double digits.
• Subscription revenues were Rs 4,428 million for the quarter ended June 30, 2014.
• During the quarter, domestic subscription revenues stood at Rs 3,238 million. Though the reported revenue reflects a growth of 2.2%, like-to-like growth is in high single digits (difference due to accounting changes necessitated by change in TRAI's content aggregator regulation). During the quarter, international subscription revenues were Rs 1,189 million, recording a growth of 10.8% over last fiscal.
• Consolidated operating revenues for the quarter stood at Rs 10,857 million, recording a growth of 11.6% as compared to the corresponding quarter last fiscal.
• Operating profit (EBITDA) for the quarter stood at Rs 3,092 million, recording a growth of 6.1% over Q1 FY14. EBITDA Margin stood at a healthy 28.5%.
• Profit after Tax (PAT) for the quarter ended June 30, 2014 was Rs 2,100 million. PAT Margin stood at 19.3%.

Subhash Chandra, Chairman, ZEE, stated, “The latest Economic Survey released by the government indicates a gradual recovery in the economy, with it likely to grow in the range of 5.4 to 5.9 percent in FY2015 overcoming the sub-5 percent GDP growth of past two years. However, the factors like poor monsoon and disturbed external environment may have an adverse impact on the growth recovery. During the quarter, the industry has seen a positive rub-off effect of Election spending on the TV ad spends. In this backdrop, we expect television media industry to continue on its double-digit growth path.”

Commenting on the results of the Company, Chandra added, “Our performance during the quarter reflects the investments that ZEE is making to grow its business and market share. This has been accompanied by a strong improvement in the operating performance of the existing businesses. In a highly competitive space, ZEE continues to build its media assets and in the process continues to create value for the shareholders. We have a strong balance sheet and I am confident that we would take advantage of the growth opportunities ahead of us.”

Punit Goenka, Managing Director and Chief Executive Officer, ZEE, commented, “The quarter gone by has been a satisfactory quarter for us. The network share is up as compared to the corresponding quarter last fiscal, which has translated into a strong performance on the advertising front, outpacing the industry growth rate yet again. On the subscription front, pursuant to the change in content aggregator regulation, we have discontinued the distribution of our channels through the joint venture MediaPro and now the channels are distributed by Taj Television India Pvt. Ltd., a wholly owned subsidiary of ZEE. The new channel launched during the quarter, Zindagi, has received encouraging response from audiences, advertisers as well as distribution partners. As a result of our consistent performance, we continue to maintain healthy EBITDA margins on our businesses. In fact, the EBITDA margins on our existing businesses have expanded, even as we continue to invest in new businesses.”

Speaking about the outlook for the business, Goenka continued, “The rollout of digitization, even though with some delays, is a positive development for the industry and will provide new growth opportunities throughout the television media value chain. Digitization will lead to fragmentation of audiences as consumers will have more options. At ZEE, we believe this presents a huge opportunity to create new products for specific segments. Advertising spends on television are expected to grow in healthy double digits over next many years. Rollout of BARC and change in advertising currency from CPRP to CPT is expected to give it a positive fillip. Development and effective monetization of newer avenues to reach the consumer is one of our focus areas. Creation and acquisition of excellent quality content remains core to our business and we continue to channelize investments to strengthen this core.”