Zee Entertainment Q2 net up 27% YoY; ad sales decline

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Zee Entertainment Q2 net up 27% YoY; ad sales decline

Zee Entertainment Enterprises second quarter consolidated net profit rose 27% year-on-year at Rs 160 crore. However, a fall in advertising revenue hurt sales growth. Zee Entertainment’s consolidated revenue growth in July-September was up just about 1% at Rs 718.4 crore.

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Zee Entertainment Enterprises second quarter consolidated net profit rose 27% year-on-year at Rs 160 crore. However, a fall in advertising revenue hurt sales growth. Zee Entertainment's consolidated revenue growth in July-September was up just about 1% at Rs 718.4 crore.

Analysts on average had expected Zee Entertainment to report a second quarter net profit of Rs 141 crore on revenue of Rs 735 crore, according to a CNBC-TV18 poll.

Advertising revenue in the second quarter fell 4.2% year-on-year to Rs 394.93 crore, while subscription revenue was up 6.3% at Rs 291.04 crore.

While lack of big sporting events on Zee's Sports channels in the quarter bought in less advertisements there, week sentiments due to macro-economic concerns led to a cautious spending on overall TV advertisements by corporates. Zee has warned of modest advertising revenue growth for the rest of the year due to the cautious market sentiments.

"While the economic situation in India is far better than most other countries, market sentiment continues to be cautious. This caution has affected advertising spends on television, which has witnessed some deceleration," said Zee Chairman Subhash Chandra.

"Though advertising spends are better sequentially, overall trends remain subdued and fiscal 2012 does look to be a year of tepid growth in advertising spends on television," added Zee's MD and CEO Punit Goenka.

During the quarter Zee's total expenses fell 2% from a year ago to Rs 518.7 crore. Programming and operating costs in July-September were down 7% at Rs 322.38 crore. 

Zee Entertainment has said that operating revenue and expenses were not comparable to year ago figures due to a change in accounting standards of subscription revenue. Media Pro Enterprise, a distribution joint venture between Star Den Media and Zee Turner, formed in May, now pays subscription revenue to Zee net of expenses it said.

Zee Entertainment shares were trading up 1% at Rs 113.20 on NSE in late afternoon trade on Monday.

Nachiket Kelkar
nachiket.kelkar@network18online.com