Mumbai: Zee Entertainment Enterprises Ltd on Wednesday posted a marginal fall in quarterly net profit as advertising revenue declined due to an economic slowdown, but higher subscription sales provided relief.
The television broadcaster’s consolidated net profit for January-March fell 7.3% to Rs968.1 million on a flat growth in total revenue of Rs5.14 billion.
The numbers include financials of Taj TV Ltd, ETC Networks and Zee Turner Ltd.
“The broad market trends weighed on our advertising revenues,” chief executive officer Punit Goenka said in a media release. “This was compensated to some extent with continued growth in our subscription revenues.”
Advertising revenues fell 7% during the quarter while revenues from subscription rose 13% compared with the same period last year, the firm said in a statement to the stock exchanges.
Its other sales and services - syndication sales, income from education business, film distribution, play out and production services, events and commission on advertisements - fell 30% to Rs508 million, it added.
“Increased competition has also impacted industry margins during the second half of fiscal 2009,” the release quoted chairman Subhash Chandra as saying.
Zee Entertainment runs and operates channels Zee TV, Zee Cafe and Zee Cinema among others. Zee TV is the No. 3 player after Colours, a joint venture between Viacom and TV18 group, and Star Plus.
The channel’s flagship brand Zee TV’s latest offerings - Dance India Dance, Chotti Bahu and Agle Janam Mohe Bitiya Hi Kijo, are among its top-rated programmes.
The company was concerned about the poor macro-economic scenario and said it would emphasise on “aggressively managing cost structure” and improving efficiencies across function and products.
“Given the current market situation, visibility remains low on the advertising revenues, though we are reasonably confident that things will be much better during the second half of fiscal 2010,” Goenka said.
Shares in the firm, which have lost more than a fifth of their value in the quarter, ended up 4.9% at Rs126.65 in a weak Mumbai market which ended down 0.7%.