Zee Entertainment Q1 profit rises 16% to Rs251.6 crore
New Delhi: Zee Entertainment Enterprises Ltd, which operates entertainment channels such as Zee TV and Zee Cinema, on Monday reported a 16% increase in net profit for the quarter ended June as it benefited from an increase in advertising revenue.
Net profit rose to Rs251.6 crore from Rs217 crore in the year-ago period. The broadcast network posted a 2% decline in revenue to Rs1,540 crore from Rs1,571 crore a year ago.
Advertisement revenue rose 6% to Rs966.5 crore, while that from subscriptions declined 9.3% to Rs479.1 crore on account of sale of its sports business.
In September, Zee Entertainment Enterprises Ltd (ZEEL) announced the sale of its sports network TEN Sports to Sony Pictures Network (SPN) in an all-cash deal worth $385 million.
“Implementation of goods and services tax (GST) is a big step towards formalization of the Indian economy. This will help plug leakages in the system and the long-term benefits from this initiative will further drive the growth rate of the Indian economy. Strong economic growth and increasing share of formal sector bodes well for ad spends growth,” chairman Subhash Chandra said.
Managing director and chief executive officer Punit Goenka said it was yet another satisfying quarter with a strong financial and operating performance. “During the quarter, we recovered from the impact of demonetization and the growth in the first two months was strong. However, the momentum was disrupted in June in the run-up to GST implementation. The advertisers reduced ad spends on existing brands and launched fewer products as distribution chain was not fully prepared for seamless transition to the new regime. Despite the challenge, our domestic ad revenue grew by 7%. Notwithstanding the short-term impact, we believe that GST will aid the advertising spends in the long-run,” said Goenka.
“Our domestic subscription revenue, adjusted for the sale of sports business, grew by 14.5%. While there is still uncertainty regarding the implementation of the new tariff regulation due to pending litigations, we are confident of driving the subscription business on the back of the strong competitive positions of our channels in the key genres,” added Goenka.
The acquisition of Reliance Broadcast Network Ltd (RBNL) which includes two channels – BIG Magic and BIG Ganga, has been completed, the company said in a statement.
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