Q4 Results: Zee Entertainment’s Profit Rises But Misses Estimates
Zee Entertainment Enterprises Ltd.’s quarterly profit rose but missed estimates as the Subhash Chandra-led media company incurred an exceptional loss.
Net profit rose 26.8 percent year-on-year to Rs 292 crore in the January-March period, according to its exchange filing. That compares with the Rs 337-crore consensus estimate of analysts tracked by Bloomberg. The company’s exceptional loss for the quarter stood at Rs 21.8 crore, the filing said.
Revenue rose 17 percent to Rs 2,019.3 crore—higher than the Rs 1,949-crore estimate. Operating profit fell 5.2 percent to Rs 577.7 crore, while its operating margin contracted 690 basis points to 28.6 percent. The company’s advertising revenue for the quarter stood at Rs 1,217.5 crore, a growth of 16 percent over the last year. Its subscription revenue rose 3.9 percent to Rs 565.3 crore.
“The subscription and advertising revenues in the fourth quarter were impacted by the tariff order,” Managing Director and Chief Executive Officer Punit Goenka said in a separate filing. “But our medium-term growth outlook for the business remains unchanged.”
The company also recommended a dividend of Rs 3.50 per equity share of Re 1 each subject to approval at the annual general meeting in July.
Zee Entertainment’s controlling stakeholder, Essel Group, is in the process of selling half its stake in the company to a strategic partner. On Jan. 25, Essel Group companies had come under massive selling pressure. Shares plummeted up to 33 percent and suffered a combined market cap erosion of Rs 13,352 crore. On Jan. 26, Essel Group Chairman Chandra said his company is in a financial mess and blamed the aggressive bets on infra, which has gone out of control since the IL&FS crisis, and the acquisition of Videocon’s D2H business.
Shares of Zee Entertainment have fallen over 22 percent in 2019 so far compared with a nearly 10 percent rise in the Nifty 50 Index during the period. The stock today ended about 4 percent lower before the earnings announcement.