MUMBAI: Zee News Ltd (ZNL) has posted a fiscal third-quarter consolidated net profit of Rs 61.84 million (after minority interest), gaining from the festive season and a better all-round performance coming from its old and new channels.
Advertising revenue has seen a healthy growth while subscription has seen a slower pace in the quarter as it has moved into a fixed fee regime with DTH operator Tata Sky. The company posted a revenue of Rs 744.44 million for the three-months ended December.
On a more positive note, ZNL has a 18 per cent margin, including the losses from the newly launched channels. The margins stand at 33 per cent for the existing businesses.
ZNL had posted a net profit of 191.48 million for the third-quarter of FY‘10 on a revenue of Rs 1.71 billion.
However, the company, which operates the news channels of the Zee brand, said that the corresponding quarter financials are not comparable as there were six regional general entertainment channels at that time under ZNL, which were demerged from the company with effect from 1 January 2010.
ZNL has posted a strong sequential growth. For the fiscal second-quarter, the company reported a net profit of Rs 2.24 million on a revenue of Rs 615.87 million.
ZNL chairman Subhash Chandra said, “The news genre on television is marked by intense competition in India, unlike any other country in the world. Most news channels in India are incurring losses. Our objective is to create a focused news organization which can create value for the shareholders in the long term. I am happy that Zee News Limited, not only differentiates itself by delivering unbiased, serious and credible news to its viewers, but does it profitably.”
He added, “Our company continues to outperform competition due to its quality of manpower, which is kept motivated with several training schemes to build leadership in the organisation. We aim to create a news powerhouse which is close to the action and can reach out to every viewer in his/her preferred language and I am happy to say that we are progressing very well toward the goal.”
ZNL MD Punit Goenka added, “Zee News Limited has shown significant growth in profitability in this quarter. Evidently, the editorial and business decisions taken by the company in the recent past are reaping rich dividends. The consistent emphasis on serious news has made Zee News Limited not just the largest, but also the No. 1 news network of India. The leadership position of the network has in turn helped augment the company’s financial position thus creating a win-win situation. Business performance during the slowdown and beyond shows great potential of growth from here. I am hopeful of continued improvement in business performance as we start are planning for the next fiscal.”
Ebitda for the quarter under review stood at Rs 134.5 million and profit before tax at Rs 103.6 million In the previous quarter, Ebitda was Rs 70.2 million and PBT Rs 32.1 million.
ZNL‘s advertising revenue grew stood at Rs 541.7 million, as compared to Rs 407.2 million in in trailing quarter (for year ago period figures see table). Subscription revenue for the quarter was Rs 185.9 million, which constituted 25 per cent of the total revenue.
Though, the company has seen a surge in ad revenue (sequentially), the subscription revenue has fallen as compared to Rs 194.1 million in previous quarter (31.5 per cent of the total revenue).
The expenses of the company stood at Rs 609.9 million, slightly higher on a sequential basis (Rs 545.7 million). In the year ago period, the expenses were Rs 1.34 billion.
ZNL posted Ebitda profit of Rs 225.2 million (186.8 million in previous quarter) from its existing business (Zee News, Zee Business, Zee 24 Taas, Zee Punjabi and 24 Ghanta). The company, however, suffered Ebitda loss of Rs 90.7 million (from loss of Rs 116.5 million) from its new business (Zee Tamizh, Zee 24 Ghantalu and Zee News UP).
ZNL CEO Barun Das said, “ZNL has shown that pragmatic and creative approach works best in the news market – national and vernacular. EBITDA margin of 18 per cent is quite healthy considering that there are three new channels which are still on way to break even; whereas the EBITDA of Rs 225.2 million and margin of 32.6 per cent for the group of existing channels demonstrates the quality of operational efficiency. In the context, the all-round performance of our bouquet of channels would continue to be our critical success factor. Our focus on “news that matters” has established our credentials as a network.”
