MUMBAI: Zee Entertainment Enterprises Ltd?s (Zeel) financial performance has grown in strength in the five years since 2007-08, the year that saw the Subhash Chandra-promoted group?s flagship channel Zee TV swell its share in general entertainment by 56 per cent to 26 per cent amidst stiff competition.

Zeel, which pioneered private sector television entertainment 20 years ago, has seen its income in 2011-12 rise to Rs 30.405 billion, 65 per cent more than in 2007-08, while its net profit increased to Rs 5.891 billion, 53 per cent higher than five years ago. The income and profit figures increased as it kept a tight control on programming cost. Its programming cost to income from operations was 37.4 per cent compared with 28.2 per cent five years ago.

The last two years have also seen Zeel turning into a zero debt company with loans to effective networth dropping from 13.5 per cent in fiscal year 2008 to zero in fiscal year 2011.

Zeel?s share of advertisement income and subscription income has nearly been at the same level over the last five years, which suggests that the advertisement revenue has kept pace with the growing subscription revenue. The share of advertising revenue in fiscal year 2012 was 52.1 per cent compared with 50.7 per cent five years ago.

As the Subhash Chandra television entertainment group continued consolidating its financial performance, the company?s market capitalisation has swung back to the end-March 2008 level. The global financial crisis in the second half of 2008 had caused its market cap to sink to Rs 46.157 billion at the end of March 2009 from Rs 106.072 billion a year earlier. At the end of March 2012, Zeel?s market capitalisation was Rs 123.202 billion, 14 per cent higher than the pre-2008.

The operating profit margin in fiscal year 2008 was the highest in the last five years. The television entertainment group is yet to reach the operating profit margin of 30 per cent achieved during the year. Its operating profit margin in the fiscal year 2012 was 24 per cent, down from 27 per cent in fiscal year 2011 and 28 per cent fiscal year 2010.

"The sports business losses have somewhat dragged down the overall Ebitda level. But Ebitda from non-sports business is still significantly higher and ended at 34 per cent in the first quarter of this fiscal," said a media analyst.

Fiscal year 2009 saw improvements across key operating metrics of Zeel. Its net profit for the year at Rs 5.124 billion was 34 per cent higher than a year earlier, on an 18 per cent year-on-year increase in income from operations to Rs 21.773 billion. This was also despite a drop in operating profit margin.

The fiscal year 2010 was a year of creating operating efficiencies for Zeel, which helped it reduce expenses by 2.63 per cent year-on-year to Rs 15.863 billion. The income from operations during the year had remained flat at Rs 21.998 billion.

The performance in 2010 was a result of a conscious decision to focus on cash flows and improve earnings, which was well complemented by programming properties and distribution strengths from cable and reach of pay TV.

Zeel made the most of the digital drive led by the exponential growth of direct-to-home television, which had made it possible for cable and satellite television to reach 80 per cent of the TV households in the country. In the fiscal year 2011, Zeel?s income rose 36 per cent to Rs 30.088 billion from Rs 21.998 a year earlier.

In the fiscal year (2012) just before it entered 21st year of its operations, Zeel?s profitability was hit by curtailed advertisement spends caused by a slowing economy amid a global financial crisis for the second time in the last five years. Its income in the fiscal year 2012 was nearly flat at Rs 30.405 billion, while its net profit shrunk to Rs 5.891 billion from Rs 6.369 billion.

As Zeel managing director and CEO Punit Goenka puts it, the company?s financial performance has been stable in fiscal year 2012, having touched Rs 15.8 billion of advertising income and Rs 13.2 billion of subscription revenue.

MUMBAI: Beating the economic slowdown and market expectations, Subhash Chandra-promoted Zee Entertainment Enterprises Ltd (Zeel) has posted a 21 per cent jump in net profit for the fiscal-first quarter on the back of a strong ad growth and cut in sports losses.

Operating revenue also rose 21 per cent to Rs 8.43 billion for the quarter ended 30 June 2012. Advertising revenue surprised market forecasts, jumping 18 per cent to Rs 4.47 billion, as the company?s flagship channel, Zee TV, gained market share and viewership.

Zeel reported consolidated net profit of Rs 1.57 billion for the quarter, up from Rs 1.30 billion.

Zeel chairman Subhash Chandra said, ?It is encouraging to see that Zeel has recorded a strong improvement in the operating and the financial performance during the quarter. This has been on the back of increased investments that we are undertaking to grow the business and the market share."

Zeel operating revenue also jumped 21 per cent during the quarter to Rs 8.43 billion (from Rs 6.98 billion), while expenses grew by 12 per cent.

Consolidated operating profit (Ebitda) for the quarter zoomed 50 per cent to Rs 2.33 billion, from Rs 1.56 billion in the year-ago period. Ebitda margins for the quarter stood at Rs 27.7 per cent.

Said Zeel MD and CEO Punit Goenka, ?Zee has started the year on a good note with improvement in the operating performance in Q1 FY?13. During the quarter, we have been able to improve operating margins, partly due to higher viewership share and partly due to lower sports losses.?

Zeel? ad revenue growth came primarily due to increase in market share of many of its channels. The advertising climate, though, stays sluggish.

Subscription revenue rose 19 per cent to Rs 3.64 billion. However, on a QoQ basis, it fell 9.45 per cent (Rs 4.02 billion in Q4). Domestic subscription revenue for the fiscal-first quarter stood at Rs 2.50 billion showing 20.7 per cent growth, while international subscription revenue was at Rs 1.14 billion (up 16.5 per cent Y-o-Y).

On the expenses front, programming and operating cost for the quarter saw a 10 per cent rise to Rs 3.76 billion, from Rs 3.42 billion a year ago. Employee cost rose 19 per cent over the earlier year. Selling & other expenses for the quarter stood at Rs 1.45 billion, increasing by 16 per cent. Total costs incurred by the company rose 12 per cent to Rs 6.1 billion.

Sports business:

The sports business revenue stood at Rs 992 million in the quarter, while cost incurred was Rs 1.20 billion.

Zeel share price jumped 2.64 per cent to close Friday at Rs 149.85 on the BSE.

MUMBAI: Subhash Chandra-promoted Zee Entertainment Enterprises Ltd (Zeel) has reportd a consolidated net profit of Rs 1.63 billion for the fourth quarter ended 31 March, down 16 per cent from Rs 1.93 billion in the corresponding quarter of previous year.

Consolidated revenues in the fourth quarter were Rs 8.69 billion, up 9 per cent from Rs 7.95 billion from year ago.

A media analyst said revenues were higher than estimated because of the positive surprise on all fronts - ad revenues, domestic subscription revenues, and higher than expected syndication & other sales revenues.

The consolidated operating profit (EBITDA) for the quarter was down 28 per cent to Rs 1.60 billion, from Rs 2.22 billion a year ago as its expenses rose 24 per cent. Zeel?s expenses during the quarter rose to Rs 7.09 billion from Rs 5.73 billion a year ago.

During the quarter, Zeel?s advertising revenues stood at Rs 4.15 billion, showing a decline of 12 per cent. The company clarified that in the fourth quarter of previous year, it had more cricket properties in sports which had resulted in higher advertising revenues. Loss from sports business was Rs 588 mn in the fourth quarter and Rs 1.48 bn for the full year.

?Advertising revenues from non-sports businesses have increased, though marginally. This is reflective of the overall weakness in advertising spends,? Zeel said.

The total subscription revenues for the quarter stood at Rs 4.02 billion, registering an increase of 30 per cent over the corresponding quarter last fiscal. Domestic subscription revenues stood at Rs 2.97
billion, while international subscription revenues were Rs 1.05 billion.

Zeel said that domestic subscription revenues are not comparable with the previous year because the fourth quarter includes an amount of Rs 506 million representing 50 per cent share of net revenues of MediaPro, when consolidated under joint venture accounting. MediaPro is a joint venture between Zee Turner and Start Den.

This amount of Rs 506 million considered in this quarter pertains to nine month period from July 2011 to March 2012. Subscription revenues for the quarter from international operations are up by 1 per cent Q-o-Q from Rs 1.04 billion in Q3 FY12 to Rs 1.05 billion in Q4 FY12.

Zeel chairman Subhash Chandra said the slowdown in GDP growth has had a greater impact on advertising spends during the year, and advertising revenue growth has seen a much sharper slowdown.

Chandra said, ?FY2013 is expected to be a landmark year for the television media industry. The industry is gearing up for a big change with deadline for implementing Digital Addressable System (DAS) in the four metros approaching on 30 June, 2012. Digitisation will bring about improvements in addressability and capacity, thereby, improving the quality of service to consumers and creating a better financial model for all players in the value chain.?

Zeel board has recommended a dividend of Rs 1.50 per share.

Zeel MD and CEO Punit Goenka said, ?We are looking forward to the implementation of digitisation which will significantly improve transparency in the pay-TV ecosystem resulting in more choice to the consumers, better quality of viewing and better economies for all players. In fiscal 2012, 10.5 million subscribers have adopted satellite based television services via DTH, taking the gross DTH subscriber base to 44.6 million strong.?

?During the quarter, we have seen significant improvement in our operating performance across all genres. The flagship channel, Zee TV, has improved its market share noticeably. We are confident that we would further enhance our market share through our planned content lineup and continue to grow our business profitability in a sustained manner.?

?In line with our strategy of growth through focused disciplined investments, we launched India?s first and only OTT (over-the-top) distribution platform, Ditto TV, with an aim to offer Live TV Channels and On Demand Video Content to consumers on multiple platforms including mobile phones, tablets, laptops, desktops and connected TVs. We have also launched some of our content offerings in high definition format. Ten Golf is Zee?s latest premium offering targeted at urban up-market audiences?, he added.

Speaking about the outlook for the business, Goenka added, ?While the competitive intensity remains high in the Indian television industry, we continue to make efforts towards further enhancing our market share. Media Pro, our joint venture for subscription revenues, has started on a good note and we are very confident of a robust performance going forward. The impending digitization will further be able to create value for the business. Also, our content focused approach, combined with better monetization of subscription revenues, will contribute to Company delivering steady return in the year ahead.?

For the full year 2011-12, Zeel?s net profit stood at Rs 5.91 billion, down 6 per cent from Rs 6.25 billion in the previous fiscal. The revenue stayed flat (up 1 per cent) to Rs 30.41 billion, as against Rs 30.08 billion in the year-ago period. Total expenses, jumped 5 per cent to Rs 23.01 billion, from Rs 21.87 billion.

Shares of Zeel ended the day unchanged at Rs 123.20 on BSE.

MUMBAI: Zee Entertainment Enterprises Ltd?s sports losses will be around Rs 1.4 billion this fiscal due to new channel launches and a weakening rupee, upsetting its guidance of capping losses at Rs 1 billion.

Zeel?s target of break even in the next fiscal could also be derailed. Though it is too early to fix an amount to it, a source said losses could fall in the region of Rs 600-650 million.

Zeel?s sports losses for the earlier fiscal stood at Rs 2.08 billion on a revenue of Rs 4.4 billion.

"Zeel will post sports losses of Rs 400-500 million in the fourth quarter and Rs 1.3-1.4 billion this fiscal. This is due to the launch expenses of Ten HD and Ten Golf and payouts for broadcasting rights in dollars," the source said.

The key acquisitions included Cricket South Africa rights (2013-20) for $180 million, Zimbabwe Cricket rights for $20 million (2013-18) and Uefa Champions League rights (2012-15) for $10.5 million.

In an interview with Indiantelevision.com late last year, Zeel managing director and chief executive officer Punit Goenka had said that "given our growth trajectory and contracts, the sports business should break even in two years. In the worst case scenario, we should be able to turn it around by the middle of FY?14."

For the first nine months of FY?12, the sports losses stood at Rs 892 million.

"The sports losses will be higher than Rs 1 billion but I can?t say how much. The losses will substantially reduce in FY?13," said Zeel president corporate strategy and business development Atul Das.

Taj Television, the company owned by Zeel, runs Ten Cricket, Ten Action+ (with football as its focus), Ten Sports, Ten Golf and Ten HD.

"We make profit or break even from all other sports properties except cricket. The challenge is monetisation of cricket at a profit level. Affiliate revenues should grow. Digitisation is better for us in that sense," said Zee?s sports business CEO Atul Pande.

Zeel will increase the programming hours of its flagship channel, Zee TV, in the next fiscal, leading to a rise in content costs. This will put pressure on non-Sports margins. "The marketing expense on Ditto (Zeel?s OTT platform) will also be upped. The pressure on margins will last till the first half of next fiscal. It will pick up from the second half of FY?13," the source said.

Zeel launched this year the country?s first Over-The-Top TV distribution platform, Ditto TV, with an aim to offer TV channels and On-Demand video content to consumers on their mobile phones, tablets, laptops, desktops, entertainment boxes and connected TVs.

"We are planning a few channel launches in the next fiscal," said Atul Das, while declining to comment on the specifics or the financial terms.

MUMBAI: With competition among the Hindi movie channels heating up and Star Network acquiring majority of films, Zee Entertainment Enterprises Ltd (Zeel) has gone ahead and acquired some big labels after it went on an aggressive movie buying spree lately.

Zeel will be premiering the movies on its flagship Hindi movie channel, Zee Cinema. Some of the released and yet-to-be released movies that Zeel has acquired recently include Don 2, Agneepath, Agent Vinod, Barfee, Heroine, Players, Joker, Michael and My Friend Pinto.

Zeel MD and CEO Punit Goenka said, "We are happy to have augmented our vast library to bring these films to the Indian audiences. We will soon be bringing the biggest blockbusters to the small screen. These films will give us a golden opportunity to showcase some of the most awaited films on TV. We have already drawn a very positive advertiser response for the films."

Last year, Zeel had acquired films like Double Dhamaal, Tanu Weds Manu, Shaitan, Bbuddah Hoga Terra Baap, Chalo Dilli, Shagird and Pyaar ka Punchnama, among others.