Zee Entertainment Enterprises Ltd’s advertising revenues grow

Zee Entertainment Enterprises Ltd (ZEEL) on Tuesday reported a robust 74.4% year-on-year growth in its consolidated net profit at Rs 146 crore for the third quarter ended December 31, 2009.

The company’s revenue for the reporting quarter stood at Rs 531 crore.

Zee said its board has approved acquisition of additional 45% in Taj TV Ltd Mauritius that owns channel Ten Sports, and the balance 50% in Taj Television (India) Pvt Ltd, the distribution arm of Ten Sports in India.

Zee will acquire the stakes in an all-cash deal for a sum $44.15 million. It will fund the acquisition via free cash and internal accruals.

Post acquisitions, Zee intends to amalgamate its entire sports business into a single entity, which will enable significant cost rationalisation.

Zee’s advertising revenue grew 1% on year to Rs 271 crore, while quarter on quarter it recorded 9.3% growth on the back of an economic revival.

The ad revenue growth is on account of the improving macro environment, higher channel shares across network channels and the festive period in India during the quarter.

Punit Goenka, managing director and chief executive officer, ZEEL, said, “I am happy that after three quarters, we have reached a positive year-on-year growth in advertising revenues. This is reflective of our product strength as well as the fact that market sentiments on ad spends have improved considerably compared with a few quarters ago.”

Subscription revenue grew 8.5% on year to Rs 247 crore. Of this, domestic subscription revenue stood at Rs 145 crore, while international subscription revenue was Rs 101 crore.
Domestic subscription revenue was led by growth in direct-to-home revenue at Rs 63.2 crore.

Goenka said, “During this fiscal we have taken important steps to consolidate our holding across genres, as we continue to ready ourselves for a digital environment that would operate with very different dynamics as compared with today. I am confident that these initiatives will play an important role in further strengthening Zee’s position as the leading media conglomerate of the region and will help deliver higher returns in the future.”

Editor’s note: The Zee Group is a co-promoter of Diligent Media Corporation, which publishes the DNA.