Zee Entertainment Enterprises’ missed analysts expectations as slow advertising sales and higher expenses dragged first quarter consolidated net profit down 13.3% from a year ago to Rs 130.16 crore.
The television broadcaster’s total revenue was up 3.1% year-on-year to Rs 698.3 crore as growth in subscription revenue offset some of the pressures from slow ad sales and a sharp drop in other sales and services.
Analysts on average had expected Zee Entertainment’s April-June net profit at Rs 143 crore on revenue of 752 crore.
While EBITDA fell 16.6% year-on-year to Rs 156 crore, operating profit margin in the quarter was at 22.3%.
Total expenditure in the first quarter was up 10.7% to Rs 542.3 crore.
"While Indian economy continues to grow at a healthy pace, high inflation and the resultant tight money policy of RBI has led to some degree of slowdown. Television industry continues to grow its subscriber base, though advertising spends have been impacted," said Chairman Subhash Chandra.
Zee Entertainment’s first quarter advertising revenue rose 0.5% year-on-year to Rs 378.74 crore. On a sequential basis, the advertising revenue was down 20%.
Punit Goenka, Zee Entertainment’s managing director said the environment for ad spends "has been weak" and the change of pace was "quite fast."
The company’s subscription revenue rose 16.7% year-on-year to Rs 305.1 crore, which included a 55.9% jump in revenue from domestic DTH (direct-to-home) operators. Subscription revenue from domestic cable operators rose 8.4%, while that from international operations were down 3.5%.
Revenue from other sales and services, which includes syndication sales, transmission services and commission on advertisement and subscription sales, slipped 62.5% from a year ago to Rs 14.5 crore.
Zee Entertainment shares were up 0.6% at Rs 125.30 in noon trade on NSE.
Source: www.moneycontrol.com
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