ZEEL PAT up 28% in Q2FY17

From left: Punit Goenka MD and CEO ZEEL, Subhash Chandra, chairman (Essel), Rajiv Kheror, president strategy & planning, (International Business) (ZEEL), Piyush Sharma, CEO Zee Living - APAC, Amit Nairbusiness head Living Foodz (File Photo)
Punit Goenka led Zee Entertainment Enterprises Limited (ZEEL) saw consolidated revenue grow 23 per cent in Q2FY17 to Rs 1695.4 crore from Rs 1378.6 crore last year. The performance was driven by strong growth in all revenue streams. Advertising revenues for the quarter were up 15.7 per cent (Rs 959.2 crore) while subscription revenues grew by 21.7 per cent (583.3 crore). The revenue does not include proceeds from the sale of the sports channels under TEN Sports brand.

The strong growth in domestic subscription revenue is attributable to early closure of content deals this year as compared to the previous years. It also includes catch-up revenues for the previous quarter. Unlike earlier years the growth in domestic subscription revenues in FY17 will be skewed towards H1. Advertising revenue growth was ahead of industry, despite drop in ratings of the flagship general entertainment channel Zee TV and reduced spends by e-commerce companies.

Other sales and services which include revenue from movie production business, content syndication, music label and commission on sales grew 117 per cent from Rs 70.5 crore to Rs 159.5 crore due to higher revenues from the movie business on account of release of Hindi movie Rustom and syndication revenues from several cricket series played during the quarter.

EBITDA for the quarter was Rs 489.2 crore up 36.4 per cent from last year's Rs 358.6 crore while EBITDA margins stood at 28.9 per cent. ZEE recorded PAT of Rs 244 crore in the quarter ended September 30, up 28.3 per cent from Rs 190.2 in Q2FY16 and PAT margin for the quarter under consideration stood at 14.4 per cent.

Subhash Chandra, chairman, ZEEL said, "ZEE reported well-rounded strong growth in revenues during the first half of financial year 2017. While we continue to add new channels to our domestic and international broadcasting businesses our new initiatives in movies, music, events and digital are taking shape and have started contributing to growth."

Goenka, managing director and chief executive officer, ZEEL added, "Our advertising revenues continue to grow ahead of market on the back of improving viewership share and better monetization of our bouquet. Growth in domestic subscription revenue was aided by catch up revenue in Q2. The first half of fiscal 2017 has been strong for us. Growth in advertisement spends has held up so far. Moderation in FMCG and e-commerce spends might have some impact on industry growth in the coming quarters. On the positive side increasing competition in telecom business would help ad spend growth. GST roll-out in the coming year could boost advertising spends as a part of potential savings in tax outgo might be reinvested."

He added, "Telecom Regulatory Authority of India (TRAI) has released draft regulations for broadcasting services and interconnection arrangement to increase transparency in content pricing and payment of carriage and to allow consumers to choose channels. These draft regulations are steps in the right direction and propose a host of changes to the existing system. Although it still remains to be seen what form the final regulation will take, we hope that improved transparency will enable various stakeholders to get their rightful share in subscription revenues."

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