ZEEL Q1FY19 ad revenue up 18.6%; subscription revenue reaches Rs 5,186 mn

Zee Entertainment Enterprises Limited (ZEEL) has reported consolidated operating revenue for the first quarter of FY19 at Rs 17,720 million, recording a growth of 15.0 per cent on YoY basis. EBITDA for the quarter ended June 30, 2018 was Rs 5,657 million, translating into EBITDA margin of 31.9 per cent. Profit After Tax (PAT) for the quarter was Rs 3,264 million. 

During the quarter, ZEEL’s consolidated advertising revenue grew by 18.6 per cent YoY to Rs 11,460 million. Domestic advertising revenue growth at 22.3 per cent to Rs 10,870 million continued to be strong, driven by demand across categories and partly aided by lower growth in the base quarter. While ad spends by consumer goods companies are increasing as their traction in rural markets improve, the growth in other categories also continues to be strong. The advertising revenue growth is underpinned by the continuous increase in our network market share over the last few quarters. International advertising revenue for the quarter was Rs 590 million. 

Subscription revenue for the quarter stood at Rs 5,186 million. Domestic subscription revenue for the quarter increased by 12.3 per cent YoY to Rs 4,252 million. However, international subscription revenue declined by 6.6 per cent YoY to Rs 934 million. As per the TRAI notification on July 3, the new tariff order will come into effect 180 days from the date of notification. ZEEL has already started discussions with its distribution partners for seamless transition to the new regime. The medium-term outlook of domestic subscription growth remains unchanged. 

ZEEL’s total expenditure in Q1 FY19 stood at Rs 12,064 million, higher by 14.3 per cent YoY, compared to Q1 FY18. 

Programming cost for the quarter at Rs 6,683 million increased by 14.0 per cent YoY. This increase is driven by higher original programming hours across the network, higher movie amortization costs and content cost for ZEE5. Advertising, publicity and other expenses for the quarter grew 21.2 per cent YoY to Rs 3,667 million. 

Subhash Chandra, Chairman, ZEEL, commented, “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.” 

Commenting on the Group’s performance in Q1 FY19, Punit Goenka, Managing Director & CEO, ZEEL, 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.” 

Upbeat about OTT platform ZEE5’s performance, Goenka believed that roll-out of original content and exclusive movie premieres would spur subscriber growth. He added, “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.”

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