MUMBAI: Zee Telefilms reported third quarter consolidated revenues of Rs 3,075 million (up 10.2 per cent) and the consolidated operating profit has grown 13.7 per cent to Rs 1,077 million. The board of directors declared the unaudited consolidated financial results of Zee Telefilms and its subsidiaries at a meeting held today.
Zee group has posted a net profit of Rs 708.8 million (consolidated) for the quarter ended 31 December 2002, (up 36 per cent) compared to a net profit of Rs 521.1million in the quarter ended 31 December 2001. Total income of the group has also increased from Rs 2,957.6 million in the December quarter of 2001 to Rs 3,250.2 million in the quarter ended 31 December 2002.
However, Zee Telefilms has posted a net profit of Rs 221.90 million for Q3, (down seven per cent) compared to a net profit of Rs 239.10 million in the previous corresponding quarter, the Bombay Stock Exchange (BSE) website.
Total income of the media major has, however, increased from Rs 1,018.3 million in the December quarter of 2001 to Rs 1,411.3 million in the quarter ended 31 December 2002.
Zee’s CMD Subhash Chandra was quoted as saying in an official release: “At the end of September, we announced that our priority objective was to streamline the organisational resources and to improve the programming content across businesses I am happy to state that we have a very focused team in place and our new programming initiatives have been well received across the businesses, whether it was Zee TV, Zee News, Zee Cinema or the Alphas.”
“Clearly, the strength of our assets combined with the talent and commitment of our team has resulted in good performance. Despite a very tough advertising market due to the continued slowness of the consumer economy, we have been able to broadly maintain advertising revenues. Zee’s subscription has made significant strides, as affirmed by us in the past also, both from the domestic and international markets, with a strong increase of 43.2 per cent over the corresponding period last year,” Chandra says.
“At Zee, we remain positive of our ability to convert the emerging opportunities into operating profits, especially with conditional access system (CAS) now becoming a reality. This is poised to power subscription revenues, till now suffering from channel infirmities. The company is pursuing with determination its target of creating value for all its shareholders,” Chandra adds.
On the BSE, the Zee Telefilms scrip opened at Rs 82.90 and closed the day at Rs 86.85 (up 4.76 per cent). The trading witnessed a volume of 2,223,366 shares. On the National Stock Exchange (NSE), the scrip opened at Rs 82.80 and closed the day at Rs 87 (up 5.07 per cent). The total volumes traded were in excess of 8,699,439. Market sources add that a single bulk deal of 5 million shares. The EPS (earning per share) was placed at Rs 0.54 which gives a PE ratio of 160.83. 
Highlights of the results:
* Advertising revenue was Rs 1,710 million for the third quarter, a marginal decline of 2.4 per cent as compared to the corresponding period last fiscal.
* Subscription revenue was Rs 1,242 million, an increase of 42.7 per cent as compared to the corresponding period last fiscal.
* Domestic subscription revenue was Rs 378 million, an increase of 43.2 per cent as compared to the corresponding period last fiscal and 2.5 per cent as compared to the 2nd quarter ended 30 September 2002.
* Internal subscription revenue has grown by 34.7 per cent over the corresponding period 
* Operating profits increased by 13.7 per cent in the third quarter
Rs million
Third quarter
Third quarter
Per cent of total revenues
Per cent of total revenues
FY2003
FY2002
FY 2003
FY2002
Ad revenues
1,710
1,753
55.6
62.8
Subs revenues
1,242
870
40.4
31.2
Other sales and services
123
167
4
6
Total revenues
3,075
2,791
100
100
Zee’s advertising revenues (excluding ETC) have declined by 8.9 per cent as compared to the corresponding quarter last fiscal. The paid connectivity of Zee bouquet is 4.5 million homes. Zee Turner increased the price of the pay bouquet to Rs 50 wef January 2003 and the impact will result in a stronger growth in domestic pay-revenues during the fourth quarter. Zee is slated to have a tough Q4 due to the World Cup cricket 2003.
Zee’s main expenses include transmission and programming costs, employee costs and administrative costs. The programming cost went up by 18 per cent due to higher pay channel costs at Siticable. However, programming cost in the content and broadcasting segment declined during the third quarter. The other costs have grown by a marginal 0.7 per cent.
Segment performance highlights:
* Thursday Premiere was a successful initiative
* The two new launches Astitva and Piya ka Ghar have been well received
* Zee Cinema continuous to maintain leadership in the movie segment. Ek ka teen Premiere promotion was successful
* Zee News surged strongly and regained market share in several geographic locations. It consistently managed to break leading stories with its Sabse Pehle initiative.
* Alpha channels continued to penetrate deeper into local viewership with an increased focus on local news coverage and customised programming.
* Zee continued to add to its subscriber base in its international operations. New subscribers were added in the US, Europe, Middle East and other parts of South east Asia.
Access highlights:
* Siticable serves 38 cities through 68 headends
* It is in the process of implementing HITS (headend in the sky) technology for distributing TV broadcast signals in the CAS regime.
* Zee estimates that broadcasters will be able to capture 50-55 per cent of the total consumer spend on TV (Rs 60 billion currently). MSOs (multi-service operators) would get a commission from broadcasters ranging between 15-20 per cent while cable operators would get a FTA fees and delivery margins from pay channels ranging between 20-25 per cent.
* HBO moved out of the distribution platform effective 1 January 2003 and CNBC joined the platform. Realty TV is likely to join the platform effective February 2003.