GECs
Viacom reports record Q1 2003 results
NEW YORK: The news continues to be good for Viacom Inc. The media powerhouse, parent company of MTV and Nickelodeon, today reported record results for the first quarter ended 31 March, 2003 (January-December fiscal).
For the first quarter of 2003, Viacom revenues increased 7 per cent to a record $6.05 billion from $5.67 billion for the same quarter last year, led by 14 per cent growth in video and 13 per cent growth in cable networks segments. Operating income increased 14 per cent to a record $987 million from $866 million, led by double-digit growth in cable networks, television and video segments, a company release says.
First quarter 2003 net earnings before cumulative effect of change in accounting principle increased 26 per cent to $462 million, from $367 million in the same quarter last year. Viacom’s first quarter net earnings were $443 million versus a net loss of $1.11 billion for the same prior-year period.
The company’s EBITDA (operating income before depreciation and amortization of $241 million) in the first quarter of 2003 increased 12 per cent to a record $1.23 billion from $1.09 billion. Free cash flow for the first quarter of 2003 was $592 million versus $380 million for the same prior-year period. The increase in free cash flow was principally due to earnings growth and lower payments for interest, taxes and working capital versus the first quarter of 2002. Free cash flow reflects the Company’s net cash flow provided by operating activities of $699 million less capital expenditures of $108 million.
Sumner M. Redstone, chairman and CEO of Viacom was quoted as saying, “Viacom is off to a strong start in 2003, with high single-digit revenue increases, double-digit gains in operating income and a 26 per cent increase in net earnings in the first quarter. Additionally, we continue to generate strong levels of free cash flow, in line with our goal to convert a significant amount of our earnings into free cash flow. Our ability to deliver results to shareholders speaks to the quality and diversity of our business lines as well as the superior performance of our management team. These factors, supported by our strong balance sheet, will continue to drive our results for the rest of 2003 and beyond.”
Mel Karmazin, president and COO of Viacom was quoted in the same release as saying, “We began 2003 as we ended 2002, with record results and excellent prospects for continued growth. Once again, the strength of Viacom’s cable networks and television operations, which turned in operating income gains of 21 per cent and 13 per cent, respectively, paced the company’s growth. Our video operations also turned in an outstanding performance in the quarter with 25 per cent operating income growth. Cable networks and television drove a 6 per cent overall increase in Viacom’s first quarter advertising revenues, an outstanding accomplishment, particularly in light of the continuing economic challenges and the absence of significant contributions from our radio and outdoor businesses. As contributions from radio and outdoor grow, shareholders will benefit from the full strength of Viacom’s assets. This, along with the continued superior performance of our other segments and the prospect of a promising television upfront sales season, will keep us on track to deliver strong results for the full year.”
GECs
Sebi sends show-cause notice to Zee over fund diversion, company responds
Regulator questions 2018 letter of comfort and governance lapses; company vows robust legal response
MUMBAI: India’s markets watchdog has reignited its long-running scrutiny of Zee Entertainment Enterprises, issuing a sweeping show-cause notice that drags the broadcaster and 84 others into a widening governance storm.
The notice, dated February 12, has been served by the Securities and Exchange Board of India to Zee, chairman emeritus Subhash Chandra and managing director and chief executive Punit Goenka, among others. At its heart: allegations that company funds were indirectly routed to settle liabilities of entities linked to the Essel Group.
The regulator’s probe traces its roots to November 2019, when two independent directors resigned from Zee’s board, flagging concerns over the alleged appropriation of fixed deposits by Yes Bank. The deposits were reportedly adjusted against loans extended to Essel Group entities, triggering questions about related-party dealings and board oversight.
A key flashpoint is a letter of comfort dated September 4, 2018, issued by Subhash Chandra in his dual capacity as chairman of Zee and the Essel Group. The document, linked to credit facilities availed by certain group companies from Yes Bank, was allegedly known only to select members of management and not disclosed to the full board—an omission SEBI believes raises red flags over transparency and governance controls.
Zee has pushed back hard. In a statement, the company said it “strongly refutes” the allegations against it and its board members and will file a detailed response. It expressed confidence that SEBI would conduct a fair review and signalled readiness to pursue all legal remedies to protect shareholder interests.
The notice marks the latest twist in a saga that has shadowed the broadcaster since 2019. What began as boardroom unease has morphed into a full-blown regulatory confrontation. The final reckoning now rests with SEBI—but the reputational stakes for Zee, and the message for India Inc on governance discipline, could scarcely be higher.
