Zee Entertainment Q3 Results: Profit Misses Estimates As Advertising Revenue Falls
Zee Entertainment’s net profit fell 38 percent year-on-year to Rs 349 crore in the quarter ended December.
Zee Entertainment Enterprises Ltd.’s quarterly profit missed estimates as its revenue from advertisements dropped.
Net profit fell 38 percent year-on-year to Rs 349 crore in the quarter ended December, according to its exchange filing. That compares with the Rs 428-crore consensus estimate of analysts tracked by Bloomberg.
The Mumbai-based broadcaster’s revenue declined 5.5 percent over last year to Rs 2,049 crore, compared with the Rs 2,116-crore estimated.
Its advertising revenue for the three-month period fell 15.8 percent year-on-year to Rs 1,230.80 crore. The subscription revenue, however, rose 15.4 percent to Rs 713.4 crore.
Advertising revenue growth of broadcasters is likely to be under severe pressure due to an economic slowdown and high base, Edelweiss Securities had said in a report prior to the earnings. The telecom regulator’s new tariff order and viewership gains in portfolio channels, however, will aid the subscription revenue growth, it had said.
Third quarter is normally a strong growth period for us. However, the tough macro-economic environment led to a decline in our ad revenues. Most of our advertisers are going through a slow-growth period and that has led to a cut in advertising spends.Punit Goenka, Managing Director, Zee Entertainment
Zee Entertainment’s operating profit, or earnings before interest, tax, depreciation and amortisation, fell 34 percent on a yearly basis to Rs 526 crore, while its operating margin contracted more than 1,000 basis points to 25.5 percent.
During the quarter, Subhash Chandra also stepped down as chairman after the debt-ridden promoters’ holding in the broadcaster fell to 5 percent. Chandra-led Essel Group, the promoter of Zee Entertainment, sold 16.5 percent shareholding in the media conglomerate to financial investors in a second effort to raise funds to pay off debt. Besides, three directors resigned after that, with two citing related-party loans and film advances, among other issues, as the reasons.
Shares of Zee Entertainment rose 5.9 percent ahead of the earnings announcement, compared with a 0.45 percent fall in the benchmark Nifty 50 Index.
