Zee Entertainment tumbles after Q3 PAT slides 38%

Zee Entertainment Enterprises fell 3.54% to Rs 273.90 after consolidated net profit fell 37.87% to Rs 349.43 crore on 5.45% decline in net sales to Rs 2,048.65 crore in Q3 December 2019 over Q3 December 2018.

Jan 22, 2020 04:01 IST capital market

Profit before tax fell 37% to Rs 510.83 crore in Q3 December 2019 (Q3FY20) as compared to Rs 811.17 crore in Q3 December 2018 (Q3FY19).

Advertising revenue for the quarter was Rs 1230.80 crore, decline of 15.8% YoY. Domestic advertising revenue declined 15.7% Yo Y to Rs 1157 crore. International advertising revenue for the quarter was Rs 73.8 crore. Domestic advertising revenue was impacted by the continued slow-down in key consumer sectors.

Subscription revenue for the quarter was Rs 713.70 crore, growth of 15.4% YoY. Domestic subscription revenue grew 21.7% YoY to Rs 631.70 crore. International subscription revenue was Rs 82 crore. The domestic subscription revenue growth rate saw a sequential decline due to the impact of a higher base and reduction in a-la-carte prices of some of the channels during the festive period.

EBITDA (earnings before interest, tax, depreciation and amortization) for the quarter declined by 25% to Rs 565.80 crore and EBITDA margin stood at 27.6%.

Finance cost surged 263.04% to Rs 20.04 crore and total expense rose 11.57% to Rs 1,608.57 crore in Q3FY20 over Q3FY19.

Punit Goenka, managing director and CEO, ZEEL, commented, Third quarter is normally a strong growth period for us, however, the tough macro-economic environment led to a decline in our ad revenues. Most of our advertisers are going through a slow-growth period and that has led to a cut in advertising spends. I believe that the worst phase is behind us and we will start seeing an improvement from the next quarter. The proposed changes to the tariff order by TRAI are being challenged in the court and we are awaiting the final verdict. However, I am confident that our strong portfolio of channel across markets will enable us, to navigate any regulatory changes in the most efficient manner.

Despite the slowdown, we continue to make investments in businesses where we see potential for growth. Working with our strategy to entrench ourselves deeper into the regional markets, we have launched 3 regional channels that will make our content more accessible to audience across the country. Indias first Punjabi GEC will surely help further strengthen our viewership share and brand in the north Indian markets. With the addition of two new regional movie channels, we now have the biggest movie channel portfolio in the country. We are preparing for the launch of two more channels over the next few months. We also continue to invest in original content for ZEE5, to create a rich content library that will make it a really compelling offering for consumers. These investments will help us grow ahead of the industry once this transient slowdown phase has passed.

Zee Entertainment Enterprises is a media and entertainment company engaged in providing broadcasting services.

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