Zee scripts revenue growth, retains market share

Zee Entertainment Enterprises Ltd (ZEEL), leading media and entertainment company, on Thursday reported a 3.1% increase in total revenues at Rs698.3 crore for the first quarter of the current fiscal as against Rs677 crore in the year-ago period.

Advertising revenues grew to Rs378.7 crore in April-June over Rs376.9 crore in the same period of the last fiscal.

Subscription revenues rose 16.7% while subscription revenues from domestic DTH rose 55.9% during this quarter to Rs110.7 crore.

Consolidated net profit declined 13% at Rs130 crore in the past quarter (Q1FY12) as compared with Rs150 crore in the same period last year.

Subhash Chandra, chairman, ZEE, said, “During the quarter, we saw some pullback in ad spends. It is encouraging to see that continued digitisation is reducing our reliance on advertising revenues as there is a robust build-up in subscription revenue stream.”

Company officials said total expenditure rose by 10.7% to Rs542.3 crore as against Rs490 crore a year ago. Programming and operating costs rose 12.2% to Rs342.3 crore in the quarter while employee costs increased 25.1% Rs74.7 crore.

Chandra said that while Indian economy continues to grow at a healthy pace, high inflation and the resultant tight money policy of RBI has led to some degree of slowdown.

“We expect some consolidation to take place in the television media space. Creation of MediaPro Enterprise is one step in that direction, which will help develop the pay revenue stream for the industry. New content formats, like HD and 3D, are being experimented with and will likely open up new revenue streams for the broadcasters,” he said.

Rahul Kundnani, analyst, SBICAP Securities, said, “Margins will see an improvement in the following quarters as there was one-time investment in branding exercise of Rs21 crore and investments were made in the new media business. Also, the advertising growth scenario is expected to improve towards the end of the second quarter with festive season; for the entire year, advertising growth rate is seen at 8%-10% lower than earlier estimates of 12%-14%. Our operating margin expectation for fiscal 2012 is at 26%.” In a competitive market scenario, the company has also managed to keep its market share intact across genres. “The GRPs of the overall GEC genre have firmed up post the World Cup season. Zee TV managed to stay on third position with an average market share of around 17%. The network’s Hindi movie channel Zee Cinema’s channel share stood at 25%,” said Kundnani.

Disclaimer: The Zee Group is a co-promoter of  Diligent Media Corporation that publishes the DNA