India's leading entertainment company Zee Entertainment Enterprises Ltd (Zee) reported an 18.6% year-on-year (YoY) increase in advertising revenues at Rs 1,146 crore for the quarter ended June 2018.
Consolidated operating revenue rose 15% on year at Rs 1,772 crore. While sales growth was in line with analyst estimates, the 31.4% increase in profit after tax at Rs 326.4 crore exceeded forecast.
Subhash Chandra, chairman, Zee, said 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," said Chandra.
Earnings before interest, tax, depreciation and amortisation (Ebitda) stood at Rs 565.7 crore and ebitda margin was 31.9%. Domestic advertising revenue increased 22.3% to Rs 1,087 crore and international advertising revenue stood at Rs 59 crore. Subscription revenue was Rs 518.6 crore, of which Rs 425.2 crore was domestic.
Punit Goenka, managing director and chief executive officer, Zee, said, "Our domestic advertising growth of 22% 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."
On the subscription front, the Telecom Regulatory Authority of India (Trai) has notified that the new tariff order will come into effect starting January 2019. However, the Zee management has already started discussions with its distribution partners for a seamless transition to the new regime.
"If implemented as envisaged, the regulation would be beneficial for all the stakeholders and could be a catalyst for growth in average revenue per user. Even under the new regime, we will be able to grow our subscription revenue at a healthy pace," said Goenka.
As far as its digital over-the-top (OTT) offering ZEE5 is concerned, it is already among the top-five digital entertainment platforms in India. "We are confident that the pace of subscriber addition will further accelerate with the rollout of original content and exclusive movie premieres. We are on track to be the largest producer of digital content in the country and are committed to make ZEE5 the number one entertainment destination for digital consumers," said Goenka.
Zee's domestic broadcast portfolio further increased market share while continuing to be the leading television entertainment network in the country. "The increase in viewership share is across the markets with strong traction, particularly in our regional channels. We believe that there is still room for monetising the increase in market share, which will allow us to grow ahead of the market," said Goenka.
BLOCKBUSTER SHOW
- Advertising revenues were at Rs 1,146 crore, an year-on-year rise of 18.6%
- Earnings before interest, tax, depreciation and amortisation (Ebitda) stood at Rs 565.7 crore and ebitda margin was 31.9%
- Subscription revenue was Rs 518.6 crore, of which Rs 425.2 crore was domestic
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Earnings before interest, tax, depreciation and amortisation (Ebitda) stood at Rs 565.7 crore and ebitda margin was 31.9%. Domestic advertising revenue increased 22.3% to Rs 1,087 crore and international advertising revenue stood at Rs 59 crore. Subscription revenue was Rs 518.6 crore, of which Rs 425.2 crore was domestic.
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