ZEE SAYS MERGER IS OFF; REPORTS THIRD
QUARTER RESULTS
Zee TV chairman Subhash Chandra last week
said that he was no longer considering a merger with Star
TV's Indian operations. He admitted that talks were on with
Star TV since April 1998 but he couldn't wait forever for
them to fructify. The stumbling block he said was a true and
fair valuation of Zee Telefilms Ltd (ZTL), the group's production
and airtime marketing company. Chandra made this announcement
after the ZTL board met on 13 January to take on record the
unaudited third quarter financial results. The board decided
not to pursue with the negotiations until it got a better
valuation.
It gave the company the go-ahead to launch eight new channels
at an investment of Rs 1,100 million. Six of these will be
in regional Indian languages (Punjabi, Gujarati, Tamil, Marathi,
Telugu and Bengali). The channels will be digitally-encrypted
and uplinked from Indian soil.
On the financial front, the company recorded advertising bookings
totaling Rs 1,095 million in the third quarter (October-December
1998) as against Rs 1,012 million in the previous corresponding
quarter. That places growth at less than 10%. However, when
looked at over a nine-month basis (April 1998-December 1998),
growth in ad bookings is up 20% plus to Rs 2,630.2 million
as against Rs 2,169.4 million in the previous corresponding
period.
ZTL's income under the head sales and service is up to Rs
473.6 million (Rs 382.6 million - figures in brackets indicate
the previous year's corresponding period) in the third quarter
and up to Rs 1,283.5 million (Rs 941.50 million) in the nine
month period. Total income is at Rs 638.1 million (Rs 526.5
million) in the third quarter and Rs 1,685.90 million (Rs
1,304.2 million) in the nine-month period. It is on the profitability
front that the company has performed well with net profit
up to Rs 143.6 million (Rs 102.10 million) and Rs 437.9 million
(Rs 326.7 million) in the two respective financial periods.
The net profit yields an annualised earnings per share of
Rs 31.29 (Rs 23.43).
The stockmarket, however, didn't pay heed to ZTL's financial
showing and knocked down the ZTL share price, which had been
rising over the previous week in anticipation of a merger
announcement. The share closed the week in the Rs 630 range
after climbing up to around Rs 680.
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