MUMBAI: Subhash Chandra’s Zee Entertainment Enterprises Limited’s (ZEEL) reported consolidated net profit of Rs 1.04 billion for the fourth quarter, which is up 49 per cent over the corresponding year.
ZEEL’s fourth quarter consolidated revenues stood at Rs 5.26 billion representing a 37 per cent growth over the corresponding period in the previous fiscal. The consolidated operating profit stood at Rs 1.30 billion, which was up by 37 per cent as compared to the corresponding quarter last fiscal. Profit before tax for the fourth quarter of fiscal 2008 was Rs 1.47 billion.
The numbers have been published after consolidating the financials of Taj TV Limited and ETC Networks Limited.
Chandra said, “ZEEL has remained focused on its core strength of content offerings, which is aligned to its viewers’ preference and as a result viewership share for all its channels in respective genre have improved. Operating performance of the company is improved with a good finish to this fiscal year and now management team is confident of achieving higher growth in new fiscal 2009.”
“The television broadcasting industry in India is going through a very interesting and exciting phase. Market will expand with lot many new channels in each genre launched or being launched. Overall time spent in television is going to increase in coming years. ZEEL, with its diversified genre of content offering, is in a better position to offer its viewers, a choice of quality content, better service and a platform where one would get more interactivity,” he added.
ZEEL whole time director Punit Goenka added, “Zee TV has emerged as a firm challenger to number one position in viewership share across all competing channels in GEC genre with its programs in each slot has started to record higher GRP. As on March 08, Zee TV had 25 programs in ‘Top 50 Program’ from just two in 2005. Recently concluded Sa Re Ga Ma Pa L’lle Champs 2008, a talent hunt reality show was a great success. Newly launched Rock N Roll Family got launched with whopping 4.2 TVR. Going forward, we are confident of improving our viewership share further with higher investment in programming content particularly in Afternoon Band and Weekend Programs.”
“Zee Next, a new channel, which was a soft-launched in third quarter end, is now planning to rollout fully with aggressive programming and marketing strategy for this new fiscal year 2009,” Goenka added.
ZEEL CEO Pradeep Guha said, “Our team has done well in delivering good results in a competitive market, which saw launch of quite a few new channels. For the year FY2008, our advertising revenues grew 33 per cent, which is almost double the industry growth rate, in our estimate. This is the second consecutive year, where our advertising revenues have grown at twice the industry growth rate and this has been largely been possible because of the robust all round performance of the company.”
Revenue Streams
Zee’s revenues are generated primarily from advertising sales and subscription revenues. Other sales and services include revenues from syndication and education sales. The following table sets forth the percentage of revenues that each type contributes to consolidated revenues for the fourth quarter of FY2008 and FY2007.
Zee’s advertising revenues was Rs 2.47 billion, a 33.4 per cent growth as compared to the corresponding quarter last fiscal. Overall subscription revenues at Rs 2.07 billion, recording a growth of 12 per cent over the corresponding quarter last fiscal. Other sales and services was Rs 723 million, a substantial increase by 394.5 per cent over the corresponding quarter last fiscal, due to higher syndication sales of Ten Sports and revenue from Education Business. The domestic subscription revenues stood at Rs 986.7 million, a 15 per cent growth over previous quarter of the current fiscal while international revenues are Rs 1,084 million.
The revenues from DTH increased to Rs 187.5 million for the fourth quarter, from Rs 175.5 million in the third quarter of the current fiscal.
Expenditure
Zee’s main expenses include cost of goods and operations, employee cost and administrative and selling expenses. The following table sets forth the percentage of costs that each type contributes to consolidated expenses for the third quarter of FY2008 and FY2007.
Overall, the programming and operating cost increased to Rs 2.19 billion compared to the Rs 1.63 billion corresponding period last year. Personnel costs are 39.1 per cent higher than corresponding period last year and selling and other costs are up by 41.7 per cent. As a result, total expenses increased by 37 per cent.
The operating profit was Rs 1.30 billion, a growth of 37 per cent compared to corresponding quarter of last fiscal. The operating profit growth has been impacted due to higher programming and marketing costs of newly launched Zee Next. Finance expenses are Rs 184 million in the fourth quarter included losses Rs.115.6 million on account of Forex derivative transaction as against Rs.59.4 million of losses during corresponding period last fiscal.
As a result profit before tax (PBT) increased by 22 per cent to Rs 1,474.5 million, while profit after tax (PAT) went up 31 per cent to Rs 1,044.2 million for the fourth quarter in fiscal 2008.
Sports business
The sports business revenues during the fourth quarter of FY2008 was Rs 526.4 million recording a growth of 10.5 per cent over corresponding quarter last fiscal and the EBITDA for the fourth quarter of FY2008 stood at Rs 13 million in comparison to a loss of Rs (331.6) million during the corresponding quarter last fiscal year. The revenues for the full year was Rs 2,218.6 million recording a growth of 11.15 per cent over previous fiscal 2007, whereas losses for the full year reduced to Rs 249 million as against losses of Rs.835.8 million in previous fiscal 2007.
