ZEE’s consolidated revenues grew by 23% in Q2FY17
The Board of Directors in their meeting held today,have taken on record the unaudited consolidated financial results of Zee Entertainment Enterprises Limited (ZEE) and its subsidiaries for the quarter ended September 30, 2016.
ZEE’s consolidated revenues grew by 23.0% in Q2FY17 to Rs 16,954 million driven by strong growth in all revenue streams. Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) for the quarter was Rs 4,892 million and EBITDA margins stood at 28.9%, respectively. ZEE recorded PAT of Rs 2,440 million in Q2FY17 and PAT margin stood at 14.4%.
Dr. Subhash Chandra, Chairman, ZEEL, stated, “Initial signs of uptick in Indian economy are already visible and we should see improvement in economic growth in quarters ahead. Normal monsoon in 2016 after a gap of two years should spur the rural growth. The passage of GST bill is a positive step and would help Indian economy.
Commenting on the results of the Company, Dr. Chandra added, “ZEE reported well-rounded strong growth in revenues during the first half of fiscal 2017. While we continue to add new channels to our domestic and international broadcasting businesses our new initiatives in movies, music, events and digital are taking shape and have started contributing to growth.”
Mr. Punit Goenka, Managing Director & Chief Executive Officer, ZEEL, commented, “At ZEE we are pleased to deliver yet another quarter of satisfying business and financial performance. Our advertising revenues continue to grow ahead of market on the back of improving viewership share and better monetization of our bouquet. Growth in domestic subscription revenue was aided by catch up revenue in Q2.”
Telecom Regulatory Authority of India (TRAI) has released draft regulations for broadcasting services and interconnection arrangement to increase transparency in content pricing and payment of carriage and to allow consumers to choose channels. These draft regulations are steps in the right direction and propose a host of changes to the existing system. Although it still remains to be seen what form the final regulation will take, we hope that improved transparency will enable various stakeholders to get their rightful share in subscription revenues.
The first half of fiscal 2017 has been strong for us. Growth in advertisement spends has held up so far. Moderation in FMCG and e-commerce spends might have some impact on industry growth in the coming quarters. On the positive side increasing competition in telecom business would help ad spend growth. GST roll-out in the coming year could boost advertising spends as a part of potential savings in tax outgo might be reinvested.”
Broadcasting Business
During Q2FY17 ZEE network’s viewership share, excluding sports, increased by 0.9% as compared to Q1FY17. The company launched three new channels in domestic market – Zee Anmol Cinema, a Hindi movie channel for FTA audience; Zee Yuva, a youth focused Marathi GEC which would help us consolidate our dominant position in the Marathi market; and Zee Cinemalu, a movie channel in Telugu language, which will help us to increase our reach and expand viewer base in the market. In the month of October we refreshed content of Zindagi, our premium Hindi GEC. With increasing uptake of HD we are in process of launching HD version of our regional channels.
The quarter saw an improvement in our ranking and viewership share in Hindi GEC genre. The two national GECs, Zee TV and &tv, had a combined share of 24% in the genre. Our flagship channel, Zee TV, was the second ranked Hindi GEC for the quarter.
In Hindi movie genre we continued to retain our leadership position through our seven channels.
We retained our strong position in the regional entertainment space. Zee Marathi continues to dominate the Marathi market with 55% viewership share. Zee Bangla increased its viewership share to 40% in Bangla genre. In Telugu market, Zee Telugu was ranked third most viewed channel. Zee Kannada retained its number two position in Karnataka market. Zee Tamil made rapid strides in Tamil market and was the second ranked channel in the months of August and September. Sarthak TV continued to be the market leader in Oriya market.
Our English cluster continues to perform well bringing the best entertainment content and movies from around the world.
The key properties on our Sports channels in Q2 included telecast of West Indies vs India, Sri Lanka vs Australia, New Zealand vs Zimbabwe, New Zealand vs South Africa and Pakistan vs West Indies cricket series. The sports business reported revenues of Rs 2,125 million and costs of Rs 2,293 million in the second quarter.
International Business
ZEE’s International business continues its strong performance driven by global demand for our content. We launched two new channels – Zee One and Zee Mundo in international markets. This takes our total number of international channels to 40 and channels dedicated to native audience to 12. Zee Mundo is targeted at Spanish speaking Hispanic population in USA and Zee One is a Bollywood movie channel in Germany which airs movies dubbed in German.
For the quarter ended September 30, 2016 the international business did
Advertisement Revenue of Rs 792 Mn
Subscription Revenue of Rs 1,158 Mn
Other Sales and Services of Rs. 672 Mn
Total Revenue of Rs 2,622 Mn
Other Businesses
Zee Studios, our movie production arm, released Akshay Kumar starrer “Rustom”, a crime thriller. The movie has become one of the highest grossing Hindi movie for the year.
Zee Music Company, our music label, has built significant market share, especially in acquisition of music rights of new Hindi movies. In Q2 our music network registered more than a billion views on Youtube, a significant milestone for our 2 year old music publishing business.
The Live Events business rolled out its first property, ‘Wicked Weekends’ which is a series of 40 events across 6 cities. The business will launch plays produced by the theatre division across country in the coming months.
During the quarter Ditto TV, our pay OTT platform, reduced its subscription price. The platform clocked ~200 million video views in Q2.
Q2 Highlights
Advertising revenues grew by 15.7% over Q2FY16 to Rs 9,592 million. Domestic advertising revenues were Rs 8,800 million while International advertising revenues stood at Rs 792 million for the quarter.
Subscription revenues were Rs 5,833 million for the quarter ended September 30, 2016 recording a growth of 21.7% over Q2FY16. During the quarter, domestic subscription revenues stood at Rs 4,675 million while international subscription revenues stood at Rs 1,158 million.
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) for the quarter stood at Rs 4,892 million and EBITDA margin stood at 28.9%.
The Company launched 5 new channels during the quarter – 3 in Domestic market and 2 in International market.
Zee Studios, the movie production arm, released Akshay Kumar starrer ‘Rustom’, which became one of the highest grossing Hindi movie of the year. Our Live Events business rolled out its first event, ‘Wicked Weekends’ across the country.