Zee Entertainment Enterprises : ZEEL becomes the No. 1 Entertainment Network in India

ZEEL becomes the No. 1 Entertainment Network in India

The Board of Directors in its meeting held today, has approved and taken on record the unaudited consolidated financial results of Zee Entertainment Enterprises Limited (ZEEL) (BSE: 505537, NSE: ZEEL.EQ) and its subsidiaries for the quarter ended September 30, 2017.

ZEEL reported consolidated revenue of Rs. 15,821 million for the second quarter of fiscal 2018. Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) was Rs. 4,912 million. PAT for the quarter was Rs. 5,912 million. EBITDA margin for the quarter was at 31.0%.

Q2FY18 HIGHLIGHTS

• ZEEL was the No. 1 non-sports entertainment television network during the quarter with a viewership share of 18.3%.
• The Company entered into a definite agreement to acquire 6 music channels from 9X Media and its subsidiaries. The channels include 3 Hindi music channels (9XM, 9X Jalwa, 9X Bajao) and one each in Punjabi (9x Tashan), Marathi (9x Jhakas) and English (9XO). The acquisition will significantly strengthen ZEEL's television music portfolio in Hindi and regional languages. It will also complement the Company's movie and music business.
• Advertising revenue for the quarter was Rs. 9,867 million recording a growth of 2.9%. Adjusted for sports, domestic advertising grew by 10.1% to Rs. 9,346 million. On a comparable basis (excluding sports, RBNL and IWPL), domestic advertising revenue grew by 5.8%. International advertising revenue for the quarter was Rs. 521 million.
• Subscription revenue for the quarter was Rs. 5,014 million. Adjusted for the sale of sports business, domestic subscription revenue grew by 7.2% to Rs. 4,043 million. International subscription revenue stood at Rs. 971 million.
• Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) for the quarter stood at Rs. 4,912 million and EBITDA margin stood at 31.0%.
• 2 HD channels - Zee Tamil HD and premium English movie channels &privé HD were launched taking the count of HD channels to 11.

Dr. Subhash Chandra, Chairman, ZEEL, commented, 'We are now a 25 years old organization and it is with great satisfaction and pride that I look back at this journey and the numerous milestones we have achieved. Starting as India's first private television channel, we have grown into a truly global entertainment content company with a worldwide footprint and a strong presence across all forms of entertainment. Indian M&E industry has grown by leaps and bounds but it is just the beginning. I am confident that we will continue to shape the entertainment industry, much like we have done over the last two and a half decades.'

Mr. Punit Goenka, Managing Director & Chief Executive Officer, ZEEL, commented, 'At ZEEL, it has been exciting 25 years during which we significantly increased our viewership and expanded our regional as well as global presence. This was achieved while delivering a strong financial performance. It has been possible because of our ability to evolve our content offerings in line with changing consumer preferences. Another step in this evolution would be the launch of our new digital product, 'Z5', in the second half of this financial year. It will offer an unrivalled content catalogue appealing to all demographics and bring unique viewing experience to the consumer.

We are satisfied with our performance against the backdrop of tough macro-economic environment during the quarter. Our advertisers were negatively impacted during transition to GST which led to a temporary pull-back on their ad spends. Post the decline in the first half of the quarter, the growth recovered strongly and is back on track. Despite the adversity, our domestic ad revenue grew at 5.8% on a comparable basis.
The domestic subscription growth for the quarter was at 7.2%. As against the early closure of deals last year, content deals with distributors are taking slightly longer due to litigations regarding the TRAI tariff regulation. However, our full year outlook for subscription growth remains unaltered. Despite the loss of advertising revenue and elevated expenses during the quarter, we have been able to deliver a healthy margin of 31%.

The acquisition of 9X Media follows our stated strategy of expanding into regional markets and niche genres. 9X Media's six music channels enjoy leading market shares in their respective segments and will further strengthen our entertainment offering to the consumer. The channels will benefit immensely from our network's strength to achieve higher growth potential and cost synergies.'