Zee Entertainment Enterprises Q2 revenues at Rs 571 crore

Televisionpoint.com Correspondent | Mumbai
Zee Entertainment Enterprises Ltd (ZEEL) has reported its second quarter fiscal 2009 consolidated revenue of Rs 571.7 crore, representing a 43 per cent growth over the corresponding period in the previous fiscal. The numbers as published are after consolidating the financials of Taj TV, ETC Networks and Zee Turner.

The consolidated operating profit stood at Rs 142.3 crore, higher by 12 per cent as compared to the operating profit of Rs 126.6 crore in the corresponding period of the previous fiscal. Profit after tax for the second quarter was Rs 178.15 crore, recording a growth of 84 per cent over the corresponding period in the previous fiscal.

Subhash Chandra, chairman, ZEEL, stated, "I am pleased that we have been able to deliver consistent growth across our businesses, especially in the existing macro economic environment. ZEEL is well poised to deliver its business outlook committed for the year and this is credited to the breadth of our portfolio, a clear strategic vision for maximizing returns across our various businesses and a strong focus on risk return parameters."

Punit Goenka, CEO, ZEEL, says, "This quarter has seen considerable progress in the content business across channels of the network. For the flagship channel Zee TV, our focus on the weekday and weekend prime time as also the afternoon offerings has yielded satisfactory results. Even in the wake of heightened competition, the channel has retained its viewership base and reach. Our endeavor to attain leadership in the Hindi General Entertainment genre is being supported through the launches of new shows across time bands even as we continue to focus on revenue leadership across the network."

Zee TV averaged 219 weekly GRPs during this quarter and attained a channel share of 20 per cent in the Hindi general entertainment channel (GEC) genre. The channel continues to dominate its genre in the Top 50 chart with a weekly average of 19 out of the top 50 programmes. New programmes such as Sa Re Ga Ma Challenge 2009, Ranbir Rano, Ek Se Badkar Ek Chota Packet, Waaris have been well received.

Zee Cinema continues to lead the Hindi cinema genre with 33 per cent channel share, achieved through key properties such as Shanivaar Ki Raat Sitaron Ke Saath, Bhakti Ki Shakti etc. The channel had undertaken various marketing activities this quarter including tie-ups with new films, which have helped strengthen the channel's brand connect with audiences across markets.

In the English GEC space, Zee Café garnered 23 per cent channel share and ranked second in the genre on viewership. Shows such as Everybody Hates Chris, Crosswords and new seasons of I Wanna Be a Soapstar, America's Next Top Model, Unhitched, Army Wives, Survivor (Fiji) etc. have been highly appreciated by the channel's relevant target group.

Zee Next, a newly launched channel, has capped losses at Rs 8.2 crore for the quarter. Whilst a revised strategy is being formulated for the channel, it has been currently brought under maintenance mode and spends similar to those incurred in second quarter of FY 09 are expected across the remainder of this financial year.

Programming and operating cost has increased by 57 per cent. This includes startup cost of Zee Next and Zee Entertainment Studio, as well as cost incurred on incremental hours of original content programming on Zee TV, higher cost of movie rights, and cost of the cricket series rights on Ten Sports, all of which have amounted to Rs 115.4 crore. Excluding the impact of these initiatives on the cost, on a like-to-like basis, the average inflationary increase in operating cost has been about 7.5 per cent.

ZEEL has entered into a full fledged film production and distribution business through two different brands - Zee Motion Pictures and Zee Limelight with plans to produce and distribute films in six languages - Hindi, Marathi, Bengali, Telugu, Tamil and Kannada. During the current quarter, five films were released and upside from two films released in quarter one was also realized in this quarter.

ZES, as a division of ZEEL, has recorded revenue of Rs 11.7 crore and an operating profit of Rs 3.1 crore for the current quarter.

The sports business revenue during the second quarter was Rs 129.5 crore, recording a growth of 212 per cent over the corresponding quarter last fiscal. However, the EBITA for the second quarter of FY08 stood at negative Rs 8.5 crore in comparison to negative Rs 1.2 crore during the corresponding quarter last year.

ZEEL's advertising revenue was Rs 285.1 crore, a 30 per cent growth as compared to the corresponding quarter last fiscal. Overall subscription revenue was at Rs 224.4 crore registering an increase of 38 per cent, over the corresponding quarter last fiscal.

During the current quarter, the domestic subscription revenue stood at Rs 111.1 crore, while international subscription revenue was Rs 113.3 crore. Revenue from DTH operators, already included in domestic subscription revenue, was Rs 27.1 crore.

Other sales and services, which include syndication sales, income from education business, income from film distribution, play out and production services, events and commission on advertisements and subscription sales, stood at Rs 62.1 crore.

During the quarter, the company's operating profit was Rs 142.3 crore. Operating margin stood at 25 per cent. The operating margins were largely impacted due to the sports business, which had a negative operating profit during the current quarter due to high cost of the India Srilanka cricket series rights.