Zee News Q1 PAT seen up 13% to Rs 10.5 cr

Zee News is to announce its first quarter results. According to CNBC-TV18 estimates, revenues are seen up 24.5% to Rs 140.3 crore versus Rs 112.7 crore.

Its OPM at 16.7% versus 15.3%.

The company’s PAT is seen up 13% to Rs 10.5 crore versus Rs 9.31 crore.

Q1FY10 QoQ

Its revenue are seen up 1.4% to Rs 140.3 crore versus Rs 138.4 crore.

Its is seen OPM at 16.7% versus 14.9%.

The company’s PAT seen up at Rs 10.5 crore versus Rs 8.76 crore.

Factors to Watch For:

Revenue growth due to regional ad spend from elections and momentum in subscription revenues

Focus on cost management therefore Margins could surprise on lower programming costs

Negligible PAT growth due to interest costs and new business losses (Q4 Interest costs at Rs 8.92 cr)

((Q4FY09 Advertising revenues grew by 40% at Rs41 cr, subscription revenues grew by 45% at Rs96.8 cr))

New Businesses:

in Q4 New business revenues  increased by 170%yoy to Rs32.2 cr and losses at Rs 16.9 cr

Zee 24 Ghanta and Zee 24 Ghantalu launched in April 09 and  Zee Tamil in October 08 ((all incurring operating losses))

Zee Tamil's performance has not picked up as per expectations due to dominance by Sun TV

Zee Bengali and Kannada have had a tepid performance in Q1FY10 due to distribution issues

Zee Kannada business breakeven was revised to Q1FY10E which could be delayed

Positive is Zee Telegu which broke-even in Q2FY09 and is the second channel in Rs 500 cr Telegu market

Interest Costs a Concern

Higher interest at Rs8.9 cr with Gross debt stands at Rs 200 cr

Interest cost increased sharply on account of incremental debt of Rs100 cr

Increased its debt in Q4 to fund its new property investments and movie acquisition