ZEEL logs 141% YoY growth in Q3 net profit to ₹59 Crore; revenue slips 3%

14 Feb 2024 , 10:16 AM

ZEEL, a leading media conglomerate, announced a 141% increase in consolidated net profit to ₹58.5 Crore for the quarter ending December 2023. In the previous year’s quarter, the figure was ₹24.3 Crore.

Revenue from operations in the third quarter declined 3% year on year (YoY) to ₹2,045 Crore.

Zee Entertainment recorded an EBITDA of ₹209 Crore in the reporting quarter, down 43% year on year from ₹366 Crore in the same quarter previous year.

Meanwhile, EBITDA margins fell to 10.2% during the reporting period, from 17.4% the previous year.

The decline in margins was caused by increased competition intensity, which resulted in a rise in content costs and higher rates for acquiring rights to third party material.

Furthermore, increasing investment intensity for developing new capabilities such as digital, as well as a lack of operating leverage as sales growth slowed, impacted profits.

Domestic advertising sales was ₹987 Crore, down 3% year on year and 5% quarter on quarter. The Cricket World Cup impacted ad revenues in the third quarter.

ZEEL stated that, while the third quarter experienced some seasonal joyous boost, the general rate of ad environment recovery remains weak.

Other sales and services revenue fell 36% YoY owing to fewer movie releases in the period.

Subscription revenue increased by 3% to ₹921 Crore in the quarter, owing to an increase in linear subscription income with the launch of NTO 3.0 and ZEE5. The recognition of ₹59 Crore from Siti Network helped the year-ago quarter’s subscription sales.

ZEE stated that it is optimistic in accelerating revenue growth as the advertising climate stabilises. The business now anticipates an 8-10% CAGR in sales in the future, with margins improving ‘meaningfully’ in FY25.

To target margins of 19-20%, the company is stated to have implemented certain interventions, including evaluating the total cost structure throughout the business to reset to a lower cost baseline as it approaches FY25 – technology, content, marketing, and people.

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