Zee Entertainment Q4 profit up 26.8% at Rs 292.5 crore


MUMBAI: Subhash Chandra-owned Zee Entertainment EnterprisesNSE 5.53 % (ZEE) has posted a net profit of Rs 292.5 crore for the final quarter of the financial year ended March 31, 2019, a jump of 26.8% over the corresponding quarter of the previous fiscal.

Beating market estimates, ZEE has clocked EBITDA, or operating profit, of Rs Rs 568.3 crore, up 12.3% from Rs 506.2 crore in Q4FY18.

Total revenue for the quarter was up 17% to Rs 2,019.3 crore, compared with Rs 1,725.3 crore in the year-ago period, on the back of strong performance of domestic broadcast, digital and movie businesses.

Despite the new tariff order, ZEE has managed to post a 16% YOY growth in advertising revenues to Rs 1,217.5 crore, while subscription revenues also grew at a modest 3.4% to Rs 565.3 crore during the quarter.

Total expenditure for the quarter stood at Rs 1,451 crore, registering a 19% increase, mainly because of a 28.1% increase in the programming cost (883.3 crore) and 23% increase in employee cost (Rs 201.5 crore).

Programming cost was driven primarily by the content cost for ZEE’s video streaming service ZEE5, launch expense of channel in Kerala and movie production and distribution business cost. Advertising and publicity cost for the quarter also grew 46% due to higher marketing costs for ZEE5, TRAI tariff order, and ‘Manikarnika’.

“We have delivered another quarter of strong operating performance which is commendable given the challenges the industry is facing in implementing the TRAI tariff order. As I had indicated earlier, the implementation of this new regulation has led to short-term disruptions, which is understandable given the size of our pay TV market. Based on the initial signs, I do believe that the changes that this regulation will bring in will be positive for us,” Punit Goenka, MD and CEO, ZEE, said.

“…our medium-term growth outlook for the business remains unchanged,” he said. “While advertisers have been circumspect to spend due to the uncertainty caused by the regulation and some moderation in the consumer demand, we believe that this is temporary. The tariff order should settle down on the ground soon and the new government’s primary objective will be to stimulate consumer demand, both of which will inspire confidence in the advertisers. The new subscription regime would be beneficial for all the stakeholders in the value chain.”

For the full fiscal, ZEE’s net profit grew 6% to Rs 1,567.1 crore from Rs 1479.1 crore in the previous fiscal, while EBITDA grew 23.5% to Rs 2,564 crore and EBITDA margin stood at 32.3%.

Total revenue for the year was at Rs 7,933.9 crore, up 18.7% YoY.