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Zee Entertainment’s September quarter results were in line with what the markets expected, with the company reporting a robust growth in revenues, though net profits came in lower due to higher tax outflow and no exceptional items this time around vis-à-vis last year.
Both advertising and subscription revenues expanded at a healthy pace, suggesting that the company has been able to capitalise its leading position in many genres and tap into the consumption theme.
Zee’s app, Zee5, seems to have taken off at a scorching pace, with the company now reporting as many as 41.3 million users, a jump of nearly 190 per cent over the figures of April this year.
The company’s revenues grew 25 per cent y-o-y in the second quarter to ₹1,976 crore. Operating profits (EBITDA) increased by 37.6 per cent, while net profit fell by over 38 per cent to ₹387 crore, as tax expenses increased by over 76 per cent against the same period in the previous year and a ₹134.6 crore exceptional item pertaining to the sale of its sports channels last year.
Domestic advertisement revenue grew 23 per cent y-o-y to ₹1,153 crore in the September 2018 quarter. Apart from its core Zee TV (Hindi) offering, robust viewership across regional channels such as Zee Bangla and Zee Marathi, along with other GEC (general entertainment channels) has helped ensure this growth. The launch of a new channel, Zee Bollywood, and new shows has further strengthened its position in regional languages. Zee5’s (mobile platform) contribution to ad revenue has also helped.
Zee Entertainment derives nearly 61 per cent of its overall revenues from advertisement.
Domestic subscription
On the domestic subscription front, revenues grew 26 per cent y-o-y to ₹509 crore, mainly attributable to the early closure of deals with cable/DTH operators and increase in viewership of regional channels. In addition, the company is already in discussions with distribution partners for a seamless transition to comply with telecom regulator TRAI’s new tariff order, as and when it is implemented. This will help in subscription growth, given the increase in original content provided by the company.
Other segments of Zee – Movie and Music – have witnessed consistent improvement. Its movie production division, Zee Studio, has released two movies in the September quarter.
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