Zee Entertainment Enterprises has announced its fourth quarter results. The company's consolidated Q4 net profit stood at Rs 104.42 crore (Rs 1.04 billion) versus Rs 113.47 crore (Rs 1.13 billion) and net sales at Rs 525.95 crore versus Rs 518.20 crore (QoQ).

Standalone net sales increased at Rs 301.71 crore as against Rs 286.82 crore net profit at Rs 79.46 crore versus Rs 81.68 crore (QoQ).

Puneet Goenka of Zee Entertainment said that despite the Indian subscription revenue growing 15%, they lost a lot of leverage on the international revenue. He also said that the subscription revenues would definitely grow faster than the advertising revenues in the coming year and the following years after that as well. He added that they are looking at a topline growth of about 30% and an EBITDA of about 30% in FY09.

Excerpts from CNBC-TV18’s exclusive interview with Puneet Goenka:

Q: Would you explain the subdued performance of the slippage in profits for the fourth quarter as the seasonality of the business the fourth quarter traditionally does not add too much to the overall performance or was there an aberration this time around?

A: No, it is due to the seasonality on the advertising revenue that the third quarter definitely sees much higher numbers than the fourth quarter normally. There is no abnormality in that, we have seen that year on year. On the subscription side though our international revenues have suffered due to the dollar devaluation over this period. Despite Indian subscription revenue growing 15% we have lost a lot of leverage on the international revenue.       

Q: How much was the loss that you took on a forex fluctuation point?

A: I do not have the exact number but it would be to the tune of about 8%.

Q: What is the outlook going forward, because at this point in time clearly the market is watching out for the guidance that you give for subscription revenues in particular, given that they are going to be more platforms to distribute channels in FY09 what is the kind of traction you can see on the advertising side as well as subscription?

A: The subscription revenues will definitely grow faster than the advertising revenues in the coming year and the following years after that as well. For the same reason as you have just mentioned, that there are so many new platforms coming on and advertising revenue growth has been slower in the past few years as well growing barely at about 15%-16%.

Q: What has been the contribution from the Sports channel especially since ICL has done relatively better in the second innings?

A: ICL is not part of Zee Entertainment. Our understanding with ICL is purely as broadcast partners with no effect on our books for the same, which means whatever revenue we generate on ICL is passed back to them after deducting cost. So it is a no profit no loss situation for Zee.

 Q: Could you explain the other income component of the business which has come in higher at about Rs 43 crore?

A: That is to do with syndication revenues especially on the sports side. Ten Sports had India Cricket, which they syndicate through Essel World, which is reflected in that.

Q: If you could tell us the kind of losses you would have taken on Zee Next, would they be counted for this quarter if not how would the losses be counted for over the next couple of quarters, the investments that you have made in that channel?

A: We have already taken into account the losses on this quarter on Zee Next, which is part of this release and it will continue to be reported accordingly, in this going forward as well.

Q: Any ad rate hikes that you would be contemplating at the start of the first quarter of FY09?

A: Any deals that come up for renewal are being negotiated at higher rates and that would be about 15% or more, but it is a deal to deal basis.

Q: For an FY09 point of view, give us final word on sales and profits. What is the kind of target you are laying for yourself?

A: On the topline definitely, we are looking at a growth of about 30% and we should be looking at an EBITDA of about 30% as well.