Zee Entertainment Enterprises : declares its Q3 results for FY17

Zee Entertainment Enterprises Ltd. declares its Q3 results for FY17

Mumbai, January 24, 2017: The Board of Directors in its meeting held today, has 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 December 31, 2016.

Q3 HIGHLIGHTS

• Advertising revenue for the quarter were Rs 9,554 million, recording a growth of 3.4% over Q3FY16. Domestic advertising revenue grew at 3.7% to Rs 8,737 million while international advertising revenue stood at Rs 817 million.

• Subscription revenue at Rs 5,935 million for the quarter ended December 31, 2016 grew by 13.7% over Q3FY16. Domestic subscription revenue stood at Rs 4,818 million while international subscription revenue stood at Rs 1,117 million.

• Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) for the quarter stood at Rs 5,158 million registering a growth of 20.1% over Q3FY16. EBITDA margin stood at 31.5%

• The Company launched HD feed of 3 regional channels taking the count of non-sports HD channels to 9.

• During the quarter, the Company got into an agreement with Reliance Broadcast Network Limited (RBNL) to acquire its television broadcasting operations. On conclusion of the transaction, RBNL's two channels - Big Magic (Hindi GEC) and Big Ganga (Bhojpuri GEC) will form a part of our portfolio along with 4 television broadcasting licenses.

ZEEL reported consolidated revenue of Rs 16,391 million for the third quarter of fiscal 2017. Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) was at Rs 5,158 million. PAT for the quarter was Rs 2,549 million. The EBITDA margin for the quarter stood at 31.5% and the PAT margin was 15.6%.

Dr. Subhash Chandra, Chairman, ZEEL, commented, 'Government's decision to demonetize high value currency had an impact on businesses across sectors. Notwithstanding the short term disruption caused by demonetization, we believe that it is a step in the right direction. Demonetization along with implementation of GST and push towards cashless economy would help country's long term growth.'

Commenting on the results of the Company, Dr. Chandra added, 'The result once again demonstrates our commitment towards profitable growth and enhancing shareholders' wealth. Despite the impact of demonetization, we have delivered growth in advertising revenues and growth in subscription revenues remained strong. We believe the adverse impact of demonetization is transient and with a strong portfolio of national and regional channels we are confident of delivering sustainable growth.'

Mr. Punit Goenka, Managing Director & Chief Executive Officer, ZEEL, commented, 'We are happy to deliver another quarter of strong profit growth in a challenging environment. Despite the impact of demonetization on our advertising revenues, we have improved our EBITDA margins. This highlights our ability to manage costs to drive profitable growth on a consistent basis.

Acquisition of broadcasting business of RBNL is in line with our strategy to expand our offering in key genres and focus on regional space. BIG Magic, a comedy channel, will complement our Hindi GEC portfolio. BIG Ganga, the leading Bhojpuri channel, will give us entry into the attractive Bhojpuri market. We are confident that these two channels will benefit immensely from the strength of our network.

The deceleration in our advertising revenue growth during the quarter is largely attributable to demonetization. Advertisers' willingness to invest in their brands remains intact. However, the timing of spends has been re-calibrated to an extent to suit the change in dynamics due to demonetization. As economic situation is normalizing, ad spends have already started moving up from December levels.'