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Zee Q3 results: Profit plunges 38% to Rs 349 crore, revenue down 5.5%

Zee's advertising revenue declined 16%. Domestic subscription revenue was up 21.7%.

, ET Bureau|
Last Updated: Jan 21, 2020, 08.51 PM IST
Zee Q3 net profit dips 38% to Rs 348.60 cr, revenue down 5.5%
Zee Q3 net profit dips 38% to Rs 348.60 cr, revenue down 5.5%
MUMBAI: India’s largest listed entertainment company Zee Entertainment Enterprises (ZEE) on Tuesday posted 37.9 per cent drop in profit for the quarter ended December 31, as advertising revenue dropped, while costs went up. The company posted a consolidated profit of Rs 349.4 crore against Rs 562.4 crore in Q3FY19.

Operating revenue stood at Rs 2,048.7 crore compared with Rs 2,166.8 crore in the year ago period, recording a decline of 5.5 per cent on a year-on-year basis.

Operating profit (Ebitda) for the quarter was at Rs 565.8 crore, down 37%, compared with Rs 754.3 crore in the previous year.

ZEE’s Ebitda margins also fell under 30 per cent to 27.6 per cent during the quarter.

“Third quarter is normally a strong growth period for us. However, tough macroeconomic environment led to a decline in ad revenues,” said Punit Goenka, MD and CEO.

During the quarter, ZEE’s advertising revenue declined 15.8 per cent to Rs 1,230.8 crore, while domestic ad revenue was down 15.7 per cent at Rs 1,157 crore.

The company said the domestic ad revenue was impacted by the continued slowdown in key consumer sectors and as the volume growth for most consumer companies did not see any uptick during the quarter, they cut advertising spends to protect their margins.

The festive month of October saw a pick-up in advertising spends, the growth slumped post that.

The growth was also impacted due to a higher base and the effect of conversion of two channels from FTA to pay in March.

“I believe that the worst phase is behind us and we will start seeing an improvement from the next quarter,” Goenka said.

ZEE’s subscription revenue grew 15.4 per cent to Rs 713.7 crore during the quarter. While domestic subscription revenue grew 21.7 per cent, international subscription revenue dropped 17.4 per cent.

“Despite slowdown, we continue to make investments in businesses where we see potential for growth. Working with our strategy to entrench ourselves deeper into the regional markets, we have launched three regional channels that will make our content more accessible to audience across the country,” Goenka added.

Its video streaming service, ZEE5, recorded peak daily active users (DAUs) of 11.4 million in December, the company said.

ZEE5 users watched an average of 140 minutes of content every month on the platform, while the service released 26 original shows and movies in six languages during the quarter.

Earlier in the day, ZEE stock closed at Rs 283.95 apiece on Tuesday, up 4.86 per cent on BSE.

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