MUMBAI: Beating the economic slowdown and market expectations, Subhash Chandra-promoted Zee Entertainment Enterprises Ltd (Zeel) has posted a 21 per cent jump in net profit for the fiscal-first quarter on the back of a strong ad growth and cut in sports losses.

Operating revenue also rose 21 per cent to Rs 8.43 billion for the quarter ended 30 June 2012. Advertising revenue surprised market forecasts, jumping 18 per cent to Rs 4.47 billion, as the company?s flagship channel, Zee TV, gained market share and viewership.

Zeel reported consolidated net profit of Rs 1.57 billion for the quarter, up from Rs 1.30 billion.

Zeel chairman Subhash Chandra said, ?It is encouraging to see that Zeel has recorded a strong improvement in the operating and the financial performance during the quarter. This has been on the back of increased investments that we are undertaking to grow the business and the market share."

Zeel operating revenue also jumped 21 per cent during the quarter to Rs 8.43 billion (from Rs 6.98 billion), while expenses grew by 12 per cent.

Consolidated operating profit (Ebitda) for the quarter zoomed 50 per cent to Rs 2.33 billion, from Rs 1.56 billion in the year-ago period. Ebitda margins for the quarter stood at Rs 27.7 per cent.

Said Zeel MD and CEO Punit Goenka, ?Zee has started the year on a good note with improvement in the operating performance in Q1 FY?13. During the quarter, we have been able to improve operating margins, partly due to higher viewership share and partly due to lower sports losses.?

Zeel? ad revenue growth came primarily due to increase in market share of many of its channels. The advertising climate, though, stays sluggish.

Subscription revenue rose 19 per cent to Rs 3.64 billion. However, on a QoQ basis, it fell 9.45 per cent (Rs 4.02 billion in Q4). Domestic subscription revenue for the fiscal-first quarter stood at Rs 2.50 billion showing 20.7 per cent growth, while international subscription revenue was at Rs 1.14 billion (up 16.5 per cent Y-o-Y).

On the expenses front, programming and operating cost for the quarter saw a 10 per cent rise to Rs 3.76 billion, from Rs 3.42 billion a year ago. Employee cost rose 19 per cent over the earlier year. Selling & other expenses for the quarter stood at Rs 1.45 billion, increasing by 16 per cent. Total costs incurred by the company rose 12 per cent to Rs 6.1 billion.

Sports business:

The sports business revenue stood at Rs 992 million in the quarter, while cost incurred was Rs 1.20 billion.

Zeel share price jumped 2.64 per cent to close Friday at Rs 149.85 on the BSE.

MUMBAI: Subhash Chandra-promoted Zee Entertainment Enterprises Ltd (Zeel) has reportd a consolidated net profit of Rs 1.63 billion for the fourth quarter ended 31 March, down 16 per cent from Rs 1.93 billion in the corresponding quarter of previous year.

Consolidated revenues in the fourth quarter were Rs 8.69 billion, up 9 per cent from Rs 7.95 billion from year ago.

A media analyst said revenues were higher than estimated because of the positive surprise on all fronts - ad revenues, domestic subscription revenues, and higher than expected syndication & other sales revenues.

The consolidated operating profit (EBITDA) for the quarter was down 28 per cent to Rs 1.60 billion, from Rs 2.22 billion a year ago as its expenses rose 24 per cent. Zeel?s expenses during the quarter rose to Rs 7.09 billion from Rs 5.73 billion a year ago.

During the quarter, Zeel?s advertising revenues stood at Rs 4.15 billion, showing a decline of 12 per cent. The company clarified that in the fourth quarter of previous year, it had more cricket properties in sports which had resulted in higher advertising revenues. Loss from sports business was Rs 588 mn in the fourth quarter and Rs 1.48 bn for the full year.

?Advertising revenues from non-sports businesses have increased, though marginally. This is reflective of the overall weakness in advertising spends,? Zeel said.

The total subscription revenues for the quarter stood at Rs 4.02 billion, registering an increase of 30 per cent over the corresponding quarter last fiscal. Domestic subscription revenues stood at Rs 2.97
billion, while international subscription revenues were Rs 1.05 billion.

Zeel said that domestic subscription revenues are not comparable with the previous year because the fourth quarter includes an amount of Rs 506 million representing 50 per cent share of net revenues of MediaPro, when consolidated under joint venture accounting. MediaPro is a joint venture between Zee Turner and Start Den.

This amount of Rs 506 million considered in this quarter pertains to nine month period from July 2011 to March 2012. Subscription revenues for the quarter from international operations are up by 1 per cent Q-o-Q from Rs 1.04 billion in Q3 FY12 to Rs 1.05 billion in Q4 FY12.

Zeel chairman Subhash Chandra said the slowdown in GDP growth has had a greater impact on advertising spends during the year, and advertising revenue growth has seen a much sharper slowdown.

Chandra said, ?FY2013 is expected to be a landmark year for the television media industry. The industry is gearing up for a big change with deadline for implementing Digital Addressable System (DAS) in the four metros approaching on 30 June, 2012. Digitisation will bring about improvements in addressability and capacity, thereby, improving the quality of service to consumers and creating a better financial model for all players in the value chain.?

Zeel board has recommended a dividend of Rs 1.50 per share.

Zeel MD and CEO Punit Goenka said, ?We are looking forward to the implementation of digitisation which will significantly improve transparency in the pay-TV ecosystem resulting in more choice to the consumers, better quality of viewing and better economies for all players. In fiscal 2012, 10.5 million subscribers have adopted satellite based television services via DTH, taking the gross DTH subscriber base to 44.6 million strong.?

?During the quarter, we have seen significant improvement in our operating performance across all genres. The flagship channel, Zee TV, has improved its market share noticeably. We are confident that we would further enhance our market share through our planned content lineup and continue to grow our business profitability in a sustained manner.?

?In line with our strategy of growth through focused disciplined investments, we launched India?s first and only OTT (over-the-top) distribution platform, Ditto TV, with an aim to offer Live TV Channels and On Demand Video Content to consumers on multiple platforms including mobile phones, tablets, laptops, desktops and connected TVs. We have also launched some of our content offerings in high definition format. Ten Golf is Zee?s latest premium offering targeted at urban up-market audiences?, he added.

Speaking about the outlook for the business, Goenka added, ?While the competitive intensity remains high in the Indian television industry, we continue to make efforts towards further enhancing our market share. Media Pro, our joint venture for subscription revenues, has started on a good note and we are very confident of a robust performance going forward. The impending digitization will further be able to create value for the business. Also, our content focused approach, combined with better monetization of subscription revenues, will contribute to Company delivering steady return in the year ahead.?

For the full year 2011-12, Zeel?s net profit stood at Rs 5.91 billion, down 6 per cent from Rs 6.25 billion in the previous fiscal. The revenue stayed flat (up 1 per cent) to Rs 30.41 billion, as against Rs 30.08 billion in the year-ago period. Total expenses, jumped 5 per cent to Rs 23.01 billion, from Rs 21.87 billion.

Shares of Zeel ended the day unchanged at Rs 123.20 on BSE.

MUMBAI: Zee Entertainment Enterprises Ltd?s sports losses will be around Rs 1.4 billion this fiscal due to new channel launches and a weakening rupee, upsetting its guidance of capping losses at Rs 1 billion.

Zeel?s target of break even in the next fiscal could also be derailed. Though it is too early to fix an amount to it, a source said losses could fall in the region of Rs 600-650 million.

Zeel?s sports losses for the earlier fiscal stood at Rs 2.08 billion on a revenue of Rs 4.4 billion.

"Zeel will post sports losses of Rs 400-500 million in the fourth quarter and Rs 1.3-1.4 billion this fiscal. This is due to the launch expenses of Ten HD and Ten Golf and payouts for broadcasting rights in dollars," the source said.

The key acquisitions included Cricket South Africa rights (2013-20) for $180 million, Zimbabwe Cricket rights for $20 million (2013-18) and Uefa Champions League rights (2012-15) for $10.5 million.

In an interview with Indiantelevision.com late last year, Zeel managing director and chief executive officer Punit Goenka had said that "given our growth trajectory and contracts, the sports business should break even in two years. In the worst case scenario, we should be able to turn it around by the middle of FY?14."

For the first nine months of FY?12, the sports losses stood at Rs 892 million.

"The sports losses will be higher than Rs 1 billion but I can?t say how much. The losses will substantially reduce in FY?13," said Zeel president corporate strategy and business development Atul Das.

Taj Television, the company owned by Zeel, runs Ten Cricket, Ten Action+ (with football as its focus), Ten Sports, Ten Golf and Ten HD.

"We make profit or break even from all other sports properties except cricket. The challenge is monetisation of cricket at a profit level. Affiliate revenues should grow. Digitisation is better for us in that sense," said Zee?s sports business CEO Atul Pande.

Zeel will increase the programming hours of its flagship channel, Zee TV, in the next fiscal, leading to a rise in content costs. This will put pressure on non-Sports margins. "The marketing expense on Ditto (Zeel?s OTT platform) will also be upped. The pressure on margins will last till the first half of next fiscal. It will pick up from the second half of FY?13," the source said.

Zeel launched this year the country?s first Over-The-Top TV distribution platform, Ditto TV, with an aim to offer TV channels and On-Demand video content to consumers on their mobile phones, tablets, laptops, desktops, entertainment boxes and connected TVs.

"We are planning a few channel launches in the next fiscal," said Atul Das, while declining to comment on the specifics or the financial terms.

MUMBAI: With competition among the Hindi movie channels heating up and Star Network acquiring majority of films, Zee Entertainment Enterprises Ltd (Zeel) has gone ahead and acquired some big labels after it went on an aggressive movie buying spree lately.

Zeel will be premiering the movies on its flagship Hindi movie channel, Zee Cinema. Some of the released and yet-to-be released movies that Zeel has acquired recently include Don 2, Agneepath, Agent Vinod, Barfee, Heroine, Players, Joker, Michael and My Friend Pinto.

Zeel MD and CEO Punit Goenka said, "We are happy to have augmented our vast library to bring these films to the Indian audiences. We will soon be bringing the biggest blockbusters to the small screen. These films will give us a golden opportunity to showcase some of the most awaited films on TV. We have already drawn a very positive advertiser response for the films."

Last year, Zeel had acquired films like Double Dhamaal, Tanu Weds Manu, Shaitan, Bbuddah Hoga Terra Baap, Chalo Dilli, Shagird and Pyaar ka Punchnama, among others.

MUMBAI: Zee Entertainment Enterprises Limited (Zeel) has posted a third-quarter consolidated net profit of Rs 1.38 billion, down 11.5 per cent over the year-ago period, as advertising revenue slipped and could not quite make up for the gains in subscription.

Ad revenue slid 10.1 per cent, impacted by a softening in spends and a loss in market share. "Overall, advertising revenues on non-sports business have declined, though marginally. This is reflective of the overall weakness in advertising spends combined with some market share loss," the company said.

Zeel posted a consolidated operating income of Rs 7.55 billion, down 8.5 per cent from the earlier year. The company said that as the revenue in the Q3 FY?11 included Rs 700 million as one time fees for pre-mature termination of rights for All India Football Federation (AIFF), the results were not comparable.

For the three-month period ended 31 December, Zeel?s operating profit (Ebitda) was at Rs 2.16 billion, down marginally (3.6 per cent), over the year-ago period.

Ebitda margin for the quarter was 28.6 per cent, which has gone up from 27.2 per cent in the corresponding quarter last fiscal. Zeel said that excluding sports business, the Ebitda margin stood at a healthy 34 per cent.

Zeel chairman Subhash Chandra said, "While the world economy goes through another round of upheaval, the Indian economy continues to grow, even though at a lower pace. The slowdown brings its own set of challenges in all spheres of business activity. Advertising trend continues to be slower than expected. However, the television economy continues to grow on the back of higher subscriber growth and increasing digitisation."

Zeel?s advertising revenues for the quarter stood at Rs 3.95 billion, showing a decline of 10.1 per cent over the earlier year. Zee said that it had more cricket properties in sports which resulted in better advertising revenues.

Zeel MD and CEO Punit Goenka said, "Zee Entertainment?s wide portfolio of television channels had some gains and some losses in market shares during the quarter. We are confident that we would regain the market share losses through our planned content lineup and continue to grow our business profitability in a sustained manner. During the quarter, we have been able to maintain healthy operating margins, partly due to lower sports losses and partly due to better cost efficiency measures.

Advertising spends are flat sequentially, and the overall trends also remain subdued.

Zeel made substantial gains in subscription income. The total subscription revenue for the quarter stood at Rs 3.26 billion, registering an increase of 15.7 per cent over the corresponding quarter last fiscal. "While subscription revenues have recorded a bigger increase, the reported subscription revenues reflect a growth of only 15.7 per cent y-o-y, because of the change in accounting treatment of domestic subscription revenues, which are now being reported net of expenses," Zeel explained.

During the current quarter, domestic subscription revenue stood at Rs 2.22 billion, up 13.85 per cent over the preceding quarter.

International subscription income was at Rs 1.04 billion, up 2.7 per cent compared to the earlier year and 8.24 per cent over the trailing quarter. It obviously gained from the rupee depreciation.

Meanwhile, other sales and services include syndication sales, play out & transmission services, facility usage income among others.During the third quarter, other sales and services stood at Rs 332 million. The company had recorded revenue of Rs 1.03 billion under this head during the corresponding period last fiscal, including a non-recurring one time fees of Rs 700 million.

Overall, programming and operating cost in the quarter was Rs 3.4 billion as compared to Rs 4.15 billion in the corresponding period last fiscal, a reduction of 17.6 per cent. The major reason for the reduction is that the corresponding quarter last fiscal had more sports properties as compared to this quarter.

Employee cost increased by 6.5 per cent over the corresponding period last fiscal. Selling & other expenses in the quarter were at Rs 1.24 billion, as compared to Rs 1.17 billion in the corresponding period last fiscal. Total cost incurred by the company in third-quarter was Rs 5.39 billion, showing a reduction of 10.3 per cent over the corresponding period last fiscal.