Press Releases2014

Jan 23, 2014
Zee Entertainment Enterprises Ltd. declares its Q3 results for FY14

Mumbai, January 22, 2014: Zee Entertainment Enterprises Limited (ZEE) (BSE: 505537, NSE: ZEEL.EQ) today reported its third quarter fiscal 2014 consolidated revenue of Rs 11,884 million. The consolidated operating profit (EBITDA) for the quarter stood at Rs 2,907 million, recording a growth of 11.3% over corresponding period of previous fiscal. PAT for the quarter was Rs 2,136 million. The EBITDA margin for the quarter stood at 24.5% and the PAT margin was 18%.

The Board of Directors in its meeting held today, has taken on record the unaudited consolidated financial results of ZEE and its subsidiaries for the quarter ended December 31, 2013.

Q3 HIGHLIGHTS

  • Advertising revenues for the quarter were Rs 6,843 million, recording a growth of 34.3% over Q3 FY13. Ex-sports, advertising growth for the quarter is upwards of 20%, which is higher than the industry growth rate. Ex-sports growth is boosted by investments in new channels.
  •  Subscription revenues were Rs 4,565 million for the quarter ended December 31, 2013, recording a growth of 11.4% over corresponding period last fiscal. During the quarter, domestic subscription revenues stood at Rs 3,322 million, while international subscription revenues were Rs 1,243 million.
  • Consolidated operating revenues for the quarter stood at Rs 11,884 million, recording a growth of 26.6% as compared to the corresponding quarter last fiscal.
  • Operating profit (EBITDA) for the quarter stood at Rs 2,907 million, recording a growth of 11.3% over the corresponding quarter last fiscal. EBITDA Margin contracted from 27.8% in Q3 FY13 to 24.5% in this quarter, because of higher sports losses during the quarter.
  • Profit after Tax (PAT) for the quarter ended December 31, 2013 was Rs 2,136 million, recording a growth of 10.5% over corresponding period last fiscal.


Mr. Subhash Chandra, Chairman, ZEE, stated, “India's economic health continues to remain precarious. Inflation has been rising, fueled by a spike in food prices and the currency's fall earlier in the year. On the other hand, India's current account deficit has narrowed, which should mute the impact of Fed policy (QE tapering) on the rupee. Prospects for 2014 are cautiously optimistic and most of the experts predict a gradual improvement in India's economic growth. However, the optimistic outlook is clouded by political risks which continue to create uncertainties. Given the background, the growth of India's Media and Entertainment Industry has been heartening. The Industry has shown a robust growth in 2013 and is expected to grow at a double digit growth in 2014 as well.”
Commenting on the results of the Company, Mr. Chandra added, “While the overall economic environment stays challenging, ZEE continues to grow its business at a healthy pace. The network shares are on an uptrend, buoyed with the addition of new channels in the network. Our investments in the sports business continued during the quarter. We also look to expand our portfolio to take advantage of the growth opportunities ahead of us. These investments are in line with our philosophy of enhancing long term shareholder value.”

Mr. Punit Goenka, Managing Director and Chief Executive Officer, ZEE, commented, “ZEE has had a satisfactory quarter on the operational front. During the quarter, we have seen a robust growth in our network viewership share. The two new launches, &pictures and Zee Anmol, have made handsome gains and have added to the network strength. The Company has shown a healthy increase in advertisement revenues even though there has been a reduction in inventory across the board as per TRAI regulation. Once again we have outperformed the television industry advertising revenue growth and have delivered 34% yoy growth supported by good contribution from sports business. Operating margins were lower due to higher losses in sports business, due to a heavy event calendar. Rupee depreciation earlier this year has also had a negative impact on the sports business performance. We are hopeful of improved sports performance in the years ahead.”

Commenting on the advertising inventory regulation, Mr. Goenka added, “This quarter saw the implementation of advertising inventory cap as per TRAI regulations. From 1st October 2013, we have reduced ad inventory to 12 minutes per clock hour across our network. We are glad to report that the transition has been reasonably smooth. Ultimately, ad inventory reduction is better value to both consumers and advertisers. I believe that a cap on advertising, while being negative in the short term especially for smaller broadcasters, will in the long term prove beneficial for the industry by restricting inventory and eventually raising value.”

Speaking about the outlook for the business, Mr. Goenka continued, “The rollout of digitization, even though with some delays, is a very good development for the industry and will provide new growth opportunities. Digitization will lead to fragmentation of audiences. At ZEE, we believe this presents a huge opportunity to create new products for specific segments. Barring the short-term impact of reduction in inventory, advertising spends on television are expected to grow in healthy double digits over next many years. Rollout of BARC is expected to give it a positive fillip. We continue to make investments in creating excellent quality content for our existing channels. We also continue to explore growth opportunities in domestic markets, international markets and in new media space.”

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