Zee Entertainment Enterprises Q4 shows 11% growth

Televisionpoint.com Correspondent
Zee Entertainment Enterprises Limited (ZEEL) has reported fourth quarter consolidated revenues of Rs 3,844 million representing a 11% growth over the corresponding period in the previous fiscal, compared on pro forma numbers. The consolidated operating profit stood at Rs 951 million. These are higher by 112% as compared to the corresponding quarter last fiscal.

Profit before tax for the fourth quarter of the fiscal 2007 was Rs 1,064 million while Net Profit was Rs 699 million, recording a growth of 33% over the corresponding period last year. The Board of Directors in its meeting held today, has taken on record the unaudited consolidated financial results of ZEEL and its subsidiaries for the quarter ended March 31, 2007.

Subhash Chandra, Chairman, stated, "Zee Entertainment finished the fourth quarter of FY2007 with a strong operating profit growth of 112% to 951 million. The operating margins have improved to 25% in comparison to the 13% in the corresponding quarter of last fiscal. Despite the disruptions in this quarter, because of the Cricket World Cup and intense competitive activity, we have recorded a revenue growth of 11%, which shows the resilience of our brands."

"We are investing our time and efforts both in reaching out to new viewers as well as in capturing a larger mind share of our existing viewers. And we have succeeded in our effort consistently in the last several quarters. With rapid digitization of television homes in India through digital satellite (DTH) and digital cable services, we are confident of delivering superior returns". Chandra added.

Commenting on the restructuring Chandra continued, "With listing of Dish TV on April 18th, the restructuring exercise is now complete. We are pleased that Dish TV has ended FY2007 with a registered subscriber base of 1.9 million and is well poised to cross the 3.0 million mark in the coming year. Dish TV is the one of the fastest growing DTH services in the world and we are confident that it would build long term shareholder value".

Punit Goenka, Whole Time Director, commented "During the fourth quarter we faced intense competition for eyeballs from Cricket World Cup and their competition. Despite these events, Zee TV has been able to maintain its ratings across time bands and has averaged 211 gross rating points (GRP's) for the quarter, and an average channel share of 23% within the general entertainment category. Zee TV continues to be a strong leader in the time bands across 6 pm to 8.30 pm on weekdays. Our successful programmes including Saat Phere, Kasamh Se, Antakshari, Betiyaan and Dulhann continued to deliver strong numbers for the channel. Our recent initiatives Mayyka, launched at the 8:30 pm slot continues to make inroads into competition while our most recent initiative – Teen Bahuraniyaan has been well accepted by the audience. Saat Phere & Maayka feature in the top 20 shows across the category. Zee TV has on average approx 17-18 shows in the Top 50 & 29-30 shows in the Top 100 across the GEC".

"The fourth quarter saw Zee Cinema maintaining its ever consistent leadership position. Our youth specific branded block in the evenings "Klub" won the prestigious Indian Television's Best Packaging Award. For Zee Cafe and Zee Studio, we have got a strong increase in the market share & Zee Cafe has surpassed Star World for 10 of last 13 weeks. We will continue strengthening our vision to provide best content to our viewers and adding more value to the shareholders", Goenka added.

Elaborating on the performance, Rajdeep Guha, CEO said, "Our team has done well in delivering good results in a disrupted market scenario. First, we were up against an exceptionally good quarter last year for advertising revenues. Second, we had the Cricket World Cup which affects viewership and revenues, and third our big showcase event - the Zee Cine Awards, which is held in fourth quarter every year, got shifted to the next quarter. Against this backdrop, we are pleased with our performance. For the year FY2007, our advertising revenues have grown 32%, which is almost double the industry growth rate, in our estimate. Looking ahead, we are confident that continued execution of our content strategy would result in a revenue growth faster than the industry".

Zee's advertising revenues was Rs 1,849 million, an 8% growth as compared to the corresponding quarter last fiscal. The growth in advertising revenues was impacted by the Cricket World Cup, which took away viewership from our channels. Also, Zee Cine Awards, a showcase event of Zee has been pushed to the first quarter of FY2008, further impacting revenues of this quarter. Despite this, the performance of Zee Entertainment has been very robust.

Overall subscription revenues at Rs 1,849 million, registered an increase of 18% over the corresponding quarter last fiscal. The domestic subscription revenue stood at Rs 854 million and international was Rs 995 million. Other sales and services was Rs 146 million. Overall, the cost of goods and operations were stable at Rs 1,632 million compared to the Rs 1,640 million in the corresponding period last year. Personnel cost were 29% higher than corresponding period last year, whereas other costs were down by 16%. As a result, total expenses were lower by 4%. As a result, the operating profit grew 112% to Rs 951 million, compared to the corresponding quarter last year. This growth has been led by better cost control and steady improvement in advertising and subscription revenues

The sports business revenue during the fourth quarter was Rs 351 million, after consolidating the results of Taj TV Limited. Sports business during this quarter had a negative EBITDA of Rs 62 million. Zee Sports & Ten Sports continued their successful telecast of a right mix of sports properties. UEFA Euro 2008 Qualifiers, Serie A & Euro 2008 Qualifiers on Zee Sports and UEFA Championship League on Ten Sports gave a viewer the best quality international football. National Football League continued on Zee Sports and Indian Football received a boost with the recent visit of FIFA President Sepp Blatter and AFC President Mohammad Bin Hammam. Like every year the much hyped Standard Chartered Mumbai Marathon was telecast on Zee Sports. Other key properties on both channels were WTA, Davis Cup, Chennai Open for Tennis and Motor Sports: Super Bike and Moto GP on Zee and Ten Sports respectively.

As a result of the demerger of the Direct Consumer Undertaking of Zee Entertainment Enterprises Limited (Zee), shareholders of Zee have been allotted equity shares in Dish TV India Limited (Dish TV - previously known as ASC Enterprises Limited). Dish TV got listed on 18th April 2007 and is trading on the stock exchanges, both BSE and NSE.

For the record, Zee is one of India's largest media and entertainment companies, it is the largest producer and aggregator of Hindi programming in the world with an extensive library housing television content and movie titles. Zee's channels are widely distributed across many countries, especially for South Asian audiences. It is a significant player in the film production and education business. Zee's well known brands include Zee TV, Zee Cinema, Zee Sports, Zee Muzic, Zee Jagran, Zee Premiere, Zee Classic, Zee Action, Zee Cafe, Zee Studios and Zee Trendz.