Atul Das, chief strategy officer, Zee Entertainment explains on CNBC-TV18, after the announcement of the company’s results, that the growth in advertising and subscription revenues have significantly contributed to the increase in overall revenues for the quarter.
There has also been strong growth in our regional arms – the Marathi and the Bangla channels
Atul Das, chief strategy officer, Zee Entertainment explains on CNBC-TV18, after the announcement of the company's quarterly results, that the growth in advertising and subscription revenues have significantly contributed to the increase in overall revenues for the quarter. He adds that that losses in the company's sports-business have been limited and will turn profitable in about 18 months.
Below is an edited transcript of the interview on CNBC-TV18
Q: Can you explain your results for Q3?
A: We are pleased to announce our third-quarter results which has been pretty strong. Total revenues have grown by 26.3 percent to Rs 938 crore driven by advertising and subscription revenues. Of the two, the contribution of advertising revenue has been significant and grew by 28.8 percent to Rs 509 crore. Subscription revenues grew by 25.6 percent to Rs 409 crore.
A significant contribution to the increase in subscription revenue has been domestic subscription revenue which has grown 33.2 percent to Rs 296 crore. So the company has posted a very satisfying performance in the third quarter compared to the third quarter of last fiscal.
The EBITDA is at Rs 261 crore this quarter, recording a growth of 27.6 percent over the third quarter of last year. Operating margins have been strong at 27.8 percent. As compared to second quarter margins of 22.8 percent, the third-quarter margins of last year were 27.5 percent. So, operating margins have grown both on a y-o-y and q-o-q basis. The profit-after-tax (PAT) posted a strong performance growing 40.5 percent y-o-y at Rs 190 crore.
Q: Do you think the levels of growth in revenue and profit are sustainable going ahead?
A: The company is doing well in terms of delivery of products and share of viewership. There has been a fairly strong growth in flagship channels Zee TV. It had a low market share in the third quarter of last fiscal. In the last three quarters, there has been very steady and strong performance reflected in better revenues overall this year.
There has also been strong growth in our regional arms the Marathi and the Bangla channels. Both have posted strong growth in the last four-to-five months. If this growth continues, we are confident the strength of the advertising revenue’s performance will be strengthened.
As far as subscription is concerned, it is a combination of trends in the industry, the impact of digitisation as well as the strength of our products.
Q: Your sports business has had a bit of an overhang on the results. How has the sports business performed and do you expect any improvement in trends, especially profitability?
A: There has been an improvement in the performance of our sports-business. Last year, the business recorded a loss of Rs 148 crore for the full year. In the three quarters of this fiscal, the losses have been limited quite substantially. In fact, in this quarter the losses were just Rs 8.6 crore.
So that’s a very major improvement as far as the reduction in losses in concerned. Yes, we are looking forward to post a turnaround, but it will take 15-18 months.
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