Zee Entertainment Enterprises Ltd’s revenue grew by 12.9% yoy to Rs1,725cr, however declined by 6.1% qoq. Revenue growth was on account of strong growth of advertisement revenue owing to broad based recovery in advertising spends. EBITDA came in at Rs506cr, up 8% yoy and down 14.8% qoq. EBITDA margin contracted by 134bps yoy and 300bps qoq to 29.34%. Company’s adjusted Net profit stood at Rs230.64cr down 20.6% yoy and 38.3% qoq owing to higher tax expenses. Revenue and EBITDA came above estimates of Rs1,696cr and Rs472cr respectively. However, PAT came below estimate of Rs257cr due to higher tax expenses.
• ZEE5 (Digital platform) launched with the biggest Indian content catalogue, 100,000+ hours of content.
• Domestic ad revenue growth (adjusted for sports) of 24.9% in Q4FY18, 18.7% in FY18.
• Domestic subscription growth (adjusted for sports) of 18.1% in Q4FY18, 11.8% in FY18.
• For FY18, company was the No.1 non-sports entertainment television network with an all-India viewership share of 18%.
• Zee Studios released 10 movies in FY18 and Zee Music Company emerged as a leading music label within 4 years of launch.
• Advertisement revenue for Q4FY18 grew by 23.9%yoy to Rs1049.6cr, while subscription revenue declined by 2% yoy.
• Regional entertainment channel, Zee Marathi continued to be the leader in all prime-time slots and maintained its No.1 position.
• Tax expenses increased by 91.2% yoy and 61.2% qoq to Rs280.5cr.
Con Call Highlights
• Company expects industry ad revenue to grow at 12% and company is aiming to grow faster.
• Dispute with a DTH player impacted subscription revenue growth in FY18.
• Lack of sports content is not impacting its bargaining power.
• It will strengthen its exclusive digital content (70 shows) in the near future.
• Company has maintained more than 30% margin guidance going forward after factoring higher amortisation due to aggressive movie acquisition.
• Zee studio released 10 movies in FY18. Company intends to release 10-12 movies in FY19E.
Zee Entertainment Enterprises Ltd ended at Rs. 589, down by 2.35 points or 0.4% from its previous closing of Rs. 591.35 on the BSE.
The scrip opened at Rs. 594.90 and touched a high and low of Rs. 604.60 and Rs. 581.10 respectively. A total of 31,96,452 (NSE+BSE) shares were traded on the counter. The stock traded below its 100 DMA.
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