ZEEL Q4 FY18 revenues up at Rs 17,253 mn; ad revenues grow by 24%

Zee Entertainment Enterprises Limited (ZEEL) has reported consolidated operating revenues of Rs 17,253 million for the fourth quarter of FY18, recording a growth of 12.9 per cent on YoY basis. EBITDA for the quarter ended March 31, 2018 was Rs 5,062 million, translating into EBITDA margin of 29.3 per cent. Profit After Tax (PAT) for the quarter was Rs 2,310 million. 

During the quarter, ZEEL’s consolidated advertising revenue grew by 23.9 per cent YoY to Rs 10,496 million. On a comparable basis (excluding sports, RBNL and IWPL), the domestic advertising revenue growth was 21.5 per cent. The strong growth momentum in advertising spends witnessed in the last quarter continues. The recovery in rural demand is complementing the already strong urban demand which should continue to hold advertising in good stead. International advertising revenue for the quarter was Rs 662 million. 

Domestic and international subscription revenues for the quarter declined by 0.7 per cent YoY and 8.0 per cent YoY, respectively, primarily on account of sale of sports business. On a like to like basis, the domestic subscription revenue grew by 18.1 per cent. Domestic subscription revenue growth for the quarter was helped by the deals that were closed in the quarter and the catch-up revenues associated with the same. 

ZEEL’s total expenditure in Q4 FY18 stood at Rs 12,191 million, higher by 15.1 per cent YoY compared to Q4 FY17. 

Programming cost for the quarter at Rs 6,893 million increased by 6.7 per cent YoY. This increase is driven by higher original programming hours in regional channels, higher movie amortization costs and content cost for lEES. Advertising, publicity and other expenses for the quarter grew 44 per cent YoY to Rs 3,660 million on account of lEES launch expense and increased marketing activities for new properties. Additionally, the expense base for Q4FY17 was lower as some marketing and promotion events were held back due to demonetisation. 

For FY18, ZEEL reported consolidated revenue of Rs 66,857 million. Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) was Rs 20,761 million, with an EBITDA margin of 31.1 per cent. PAT for the year was Rs 14,791 million. 

Dr Subhash Chandra, Chairman, ZEEL, commented, “Looking at our performance, one might not realise that the first half of the year was not as smooth, which is a testimony to the strength of our team. Being the number one TV entertainment network is a result of our strategy and the consistent hard work we have put in over the years. With the launch of ZEE5, we have taken a major leap towards our preparation for the future and we are confident that like TV business we will be in the leadership position in the digital space as well.” 

Adding to this, Punit Goenka, Managing Director & Chief Executive Officer, ZEEL, said, "We launched our new digital platform, ZEE5, with over 100,000 hours of content across 11 languages. We are happy with the initial response and are confident that the sheer depth and breadth of our content offering will enable it to become the number one digital entertainment platform in India. We have also focused on the peculiarities of Indian market and designed technological features to improve the user experience. Unlike most of the existing apps which are either focused on the English-speaking segment or the youth audience, ZEE5’s vast content catalogue is designed with an objective to cater to all sections of video viewing audience.” 

Commenting on ZEEL’s operating and financial performance during the quarter, Goenka said, “Domestic ad revenue growth of 24 per cent is driven by broad based recovery in advertising spends. With high visibility of product campaigns, improving consumer demand and GST related benefits trickling down to ad spends, we are confident of continued traction in advertising spending. The full-year domestic subscription revenue growth of 12 per cent is a tad lower than our initial expectations due to some unforeseen events. However, there is no change in our medium-term outlook for the same.”

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