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.

MUMBAI: Zee Entertainment Enterprises Ltd (Zeel) has posted a healthy 26.7 per cent jump in its second-quarter net profit as revenue stayed flat in a weak advertising environment.

A 4.2 per cent drop in ad revenue has been cushioned by a 2.3 per cent cut in costs, helping the company to beat the profitability forecast made by market analysts.

Zeel?s consolidated net profit for the three-month period ended 30 September stood at Rs 1.6 billion compared to Rs 1.26 billion a year ago. Analysts had forecast the company to earn a net profit of Rs 1.40 billion.

Operating revenue stood at Rs 7.18 billion, marginally up from Rs 7.12 billion. However, the company clarified that the operating revenues and expenditure for Q2 are not comparable to the earlier year because of the "change in accounting treatment of domestic subscription revenues, which are now being reported net of expenses."

Zeel chairman Subhash Chandra said, "The Indian economy continues to grow at a good pace but high inflation and the resultant tight money policy of RBI is taking its toll. While the economic situation in India is far better than most other countries, market sentiment continues to be cautious. This caution has affected advertising spends on television, which has witnessed some deceleration. The good part is that the television economy continues to grow robustly on the back of subscriber growth and digitisation." 

The consolidated operating profit (Ebitda) for the quarter was up 10.1 per cent to Rs 2.07 billion, from Rs 1.88 billion in the year-ago period. Operating profit margin stood at 28.9 per cent.

Finance expenses during the quarter were Rs 56 million, up 1085 per cent year-on-year.

During the quarter, Zeel?s advertising revenue saw a decline of 4.2 per cent to Rs 3.95 billion compared to the earlier year. Zeel clarified that the decline is due to the fact that the corresponding quarter last fiscal had some India-centric cricket properties. Excluding sports, advertising revenues have shown an increase.

The company, however, feels that the ad environment will stay weak this fiscal.

Subscription revenue for the quarter stood at Rs 2.91 billion, registering an increase of 6.3 per cent over the corresponding quarter of the previous fiscal. During the current quarter, domestic subscription revenue stood at Rs 1.95 billion, while international subscription income was at Rs 959 million, down 3 per cent. Domestic cable accounted for 12.8 per cent of the revenue, while domestic DTH accounted for 14.3 per cent.

Overall, programming and operating cost in the quarter was Rs 3.22 billion as against Rs 3.46 billion in the corresponding period of the previous fiscal, a reduction of 6.8 per cent.

Employee cost increased by 7 per cent; selling and other expenses in the quarter were at Rs 1.2 billion, as against Rs 1.13 billion in the earlier year. Total costs incurred by the company in this quarter stood at Rs 5.11 billion, showing a reduction of 2.3 per cent.

The numbers as published are after consolidating the financials of Taj TV Limited (Taj). It also includes financial results of regional general entertainment channel business (R-GEC) acquired from Zee News Limited (ZNL) and 9X business undertaking of 9X Media.

Zeel?s sports business posted a revenue of Rs 881 million, while costs incurred in this quarter was Rs 1.11 billion.

Zeel MD and CEO Punit Goenka said, "Zee Entertainment has a wide portfolio of television channels and we have seen some gains and some losses in our market shares during the quarter. We are confident that we would continue to grow our business profitability in a sustained manner. During the quarter, we have seen a healthy increase in our operating margins, partly due to lower sports losses and partly due to better cost efficiency measures. Though advertising spends are better sequentially, overall trends remain subdued and FY?2012 does look to be a year of tepid growth in advertising spends on television. Our strategy during the last few years has been to create a formidable entertainment enterprise and invest in the business in a focused disciplined way."

The flagship channel, Zee TV, and Zee Marathi have lost market shares to competition.

"We are working towards correcting the loss in market shares in some of our businesses," said Goenka.

Shares of Zeel rose 1.1 per cent to close Monday at Rs 113.3 on the BSE.

NEW DELHI: Star India chief executive officer Uday Shankar has been re-elected president of the Indian Broadcasting Foundation (IBF) for the second term.

Zee Entertainment Enterprises Ltd MD and CEO Punit Goenka was elected treasurer. Times Television Network MD and CEO Sunil Lulla, who had been treasurer until now, was elected as the vice-president in the 12th Annual General Meeting.

The only change in the Board is that Madhavan of Asianet has been co-opted in place of G Krishnan, who had quit TV Today recently.

Earlier in the day, during the 12th Annual General Meeting, the following were elected as members of the Board of Directors for 2011-12:

1. Uday Shankar
2. Sunil Lulla

3. Punit Goenka
4. Network 18 Group CEO Haresh Chawla
5. Eenadu TV director I Venkat
6. Dish TV MD Jawahar Goel
7. MM TV director Jayant M. Mathew
8. NDTV executive vice chairman KVL Narayan Rao
9. Multi Screen Media CEO Man Jit Singh

10. Star CJ Network CEO Paritosh Joshi
11. India TV chairman Rajat Sharma
12. Siddharth Jain, Vice President & General Manager (Distribution & Business Operations), Turner International India & South Asia

In the subsequent Board meeting, the Board co-opted the following Directors to the IBF Board:

1. Asianet Communications MD K Madhavan
2. Sri Adhikari Bros. vice chairman & MD Markand Adhikari
3. Colors CEO Raj Nayak

It was decided that the following members would be special invitees in the IBF Board of Directors meetings:

1. Turner General Entertainment Network VP and GM Monica Tata

2. ESPN Star Sports MD Manu Sawhney

MUMBAI: Zee Entertainment Enterprises Ltd (Zeel) has reported first-quarter operating loss of Rs 566 million from its sports business.

The company, however, has maintained its guidance of limiting its fiscal loss to a maximum of Rs 1 billion.

Revenue stood at Rs 873 million for the three-month period ended June 2011. A major portion of this would have come from the India-West Indies series that Ten Cricket telecast on HD mode. 

The sports business incurred a cost of Rs 1.44 billion during the quarter.

"The India - West Indies cricket series has resulted in good viewership for Ten Cricket, but has also resulted in operating losses, as was expected. A significant part of the sports losses for this year has taken place in the first quarter itself. We continue to reiterate our commitment to develop the sports genre which will see a far improved performance compared to fiscal 2011," Zeel MD and CEO Punit Goenka said.

Zeel‘s sports losses for FY‘11 stood at Rs 2.08 billion on a revenue of Rs 4.4 billion (excluding a one-time revenue gain of Rs 700 million as one-time fee for the pre-mature termination of rights for AIFF).

The company runs Ten Cricket, Ten Action+ (with football as its focus) and Ten Sports, a varied sports channel.

The key properties showcased on Ten Sports during the quarter were WWE Wrestlemania, Extreme Rules and Over the Limit. Ten Action+ aired UEFA Champions League matches, whereas Ten Cricket aired West Indies vs India series in HD mode through DTH service providers. Ten Cricket, in partnership with YouTube, also made the entire series available on the Internet - both in live and on demand formats.

MUMBAI: Zee Entertainment Enterprises Ltd (Zeel) has posted a first-quarter performance that smells of a slowdown in advertising revenues for the media sector as one of India‘s largest television broadcasting companies has guided to a below double-digit growth this fiscal.

Zeel has disappointed market estimates as it reported a 13.3 per cent slide in consolidated net profit, impacted by a slowing ad revenue growth while expenses jumped with the company anticipating buoyancy in the economy.

Advertising revenue for the three-month period ended June 2011 grew just 0.5 per cent to Rs 3.79 billion. The flagship Hindi general entertainment channel, Zee TV, came under pressure even as it held on to its third position way behind rivals Star Plus and Colors.

Zeel MD and CEO Punit Goenka feels there is a softening in the advertising economy. "While our business fundamentals remain strong, the environment for ad spends has been weak, in our view, and to an extent the change of pace was quite fast. We are hopeful that with the onset of festive season, we should see some normalcy in advertising spends," he said. 

Subscription revenue stayed strong but the 16.7 per cent growth couldn‘t quite make up the growth pace that Zeel was anticipating. Operating revenue rose 3.1 per cent to Rs 6.98 billion from Rs 6.77 billion a year ago.

Net profit fell to Rs 1.30 billion (from Rs 1.50 billion) while expenses grew by 10.7 per cent.

Meanwhile, the consolidated operating profit (Ebitda) for the quarter skid 16.6 per cent to Rs 1.56 billion, from Rs 1.87 billion in the year-ago period. 

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Subscription revenue managed a strong double-digit growth. Domestic subscription revenue stood at Rs 2.07 billion, while international subscription revenue stayed at Rs 976 million.

Revenue from domestic DTH operators, part of domestic subscription revenue, was at Rs 1.11 billion, up 55.9 per cent. Subscription revenue from international operations dropped 3.5 per cent, while subscription revenue from domestic cable increased by 8.4 per cent.

Zeel chairman Subhash Chandra said, "The widespread adoption of satellite based television services via DTH is proving to be a big game changer for television business in India and creating a more sustainable business model for the industry. 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."
 

Programming and operating cost for the quarter saw a 27.5 per cent rise to Rs 3.05 billion, from Rs 2.39 billion a year ago. Employee cost rose 53.2 per cent over the earlier year. Selling & other expenses for the quarter stood at Rs 1.25 billion, increasing by 55.1 per cent over the corresponding period of the previous fiscal. Total costs incurred by the company rose 36.5 per cent to Rs 4.90 billion.

Overall, programming and operating cost in the quarter rose 12.2 per cent to Rs 3.42 billion compared to Rs 3.05 billion a year ago. Employee cost increased by 25.1 per cent over the year-ago period. Selling & other expenses in the quarter were flat at Rs 1.25 billion, as compared to the corresponding period of the previous fiscal. 

This includes additional one-time expense on marketing and rebranding exercise undertaken during this quarter. Total costs incurred by the company in this quarter stood at Rs 5.42 billion, showing an increase of 10.7 per cent over the corresponding period last fiscal.