GECs
Zeel operating profit up; board recommends 290% dividend
BENGALURU: Subhash Chandra-led Zee Entertainment Enterprises Ltd (Zeel) reported higher operating profit (EBITDA) for the year and quarter ended 31 March 2018 (FY 2018, the year under review; Q4 2018, the quarter under review) as compared with the corresponding periods of the previous year (FY 2017, Q4 2017). Profit after tax (PAT) for the quarter and year under review was, however, lower due to higher tax and lower extraordinary/exceptional items as against the previous year. The Zeel board of directors has recommended an equity dividend of 290 per cent per share of face value of Re 1.
Zeel’s EBITDA for FY-2018 increased by 7.7 per cent to Rs 2,076.14 crore (31.1 per cent margin) from Rs 1,926.86 crore (29.9 per cent margin) in fiscal 2017. EBITDA for Q4 2018 rose by 8 per cent to Rs 506.20 crore (29.3 per cent margin) from Rs 468.70 crore (30.7 per cent margin). PAT for FY 2018 declined 33.4 per cent to Rs 1,477.75 crore from Rs 2,220.11 crore.
Zeel’s operating revenue for FY 2018 was 3.9 per cent higher at Rs 6,685.68 crore than the Rs 6,434.13 crore in FY 2017. Operating revenue for Q4 2018 grew by 12.9 per cent year-on-year (yoy) to Rs 1,725.31 crore from Rs 1,527.95 crore. Total revenue for FY 2018 increased by seven per cent to Rs 7,126.30 crore from Rs 6,658.17 crore in the previous year. Total revenue for the quarter grew by 14.6 per cent yoy to Rs 1,813.43 crore from Rs 1,582.89 crore. Revenue growth during both periods can be attributed to growth in advertising revenue partly offset by a decline in subscription revenue.
Advertising revenue in FY 2018 increased by 14.5 per cent to Rs 4,204.76 crore from Rs 3,673.50 crore in the previous year. The company said in its earnings release that on a comparable basis— excluding sports, RBNL and Indian Web Portal Pvt Ltd (IWPL)—domestic advertising revenue grew by 15.9 per cent to Rs 3,848.88 crore. International advertising revenue increased by 26.2 per cent in FY 2018 to Rs 214.3 crore. International business revenue in Q4 2018 was Rs 66.2 crore.
Subscription revenue during the year under review declined by 10.3 per cent to Rs 2,028.73 crore from Rs 2,262.91 crore in FY 2017. The company said in its release that adjusted for sale of Zeel’s sports business, subscription revenue actually grew by 11.8 per cent. The company also said that subscription revenue growth for the year was slightly impacted by the delay in phase-III monetisation due to the uncertainty regarding TRAI’s tariff order. Domestic and international subscription revenue for Q4 2018 declined by 0.7 per cent yoy and eight per cent yoy, respectively, primarily on account of the sale of the sports business. Subscription revenue in Q4 2018 decreased by two per cent yoy to Rs 546.52 crore from Rs 557.92 crore. International business subscription revenue in Q4 2018 declined to Rs 94.4 crore.
Zeel’s other sales and services include revenue from its movie production business, content syndication, music label and commission on sales. Other sales and services revenue decreased by 9.1 per cent in FY 2018 to Rs 452.19 crore from Rs 497.72 crore in the previous fiscal. For Q4 2018, other sales and services revenue increased by five per cent yoy to Rs 129.24 crore from Rs 123.09 crore in Q4 2017. Other sales and services revenue from the international business in Q4 2018 was Rs 53.7 crore.
Other income, during the year under review, soared by 96.5 per cent to Rs 440.35 crore from Rs 224.04 crore whereas, during the quarter, increased by 60.4 per cent to Rs 88.12 crore from Rs 54.94 crore.
For FY 2018, total costs increased by 2.3 per cent to Rs 4,609.50 crore. The underlying increase was higher but offset by the sale of the sports business. On a like-to-like basis, programming cost increased due to higher original content hours across the network and higher movie amortisation cost while the reported programming cost declined due to the sale of the sports business. Advertising, publicity and other expenses increased by 25.6 per cent to Rs. 1,416.4 crore on account of brand refresh, launch of ZEE5 and costs related to silver jubilee events.
Zeel’s total expenditure in Q4 2018 at Rs 1,219.1 crore was higher by 15.1 per cent as againt Q4 2017. Programming cost for the quarter at Rs 689.3 crore increased by 6.7 per cent yoy. This increase was driven by higher original programming hours in regional channels, higher movie amortisation costs and content cost for ZEE5. Advertising, publicity and other expenses for the quarter grew by 44 per cent yoy to Rs 3,66 crore on account of the ZEE5 launch expense and increased marketing activities for new properties. Additionally, the expense base for Q4 2017 was lower as some marketing and promotion events were held back due to demonetisation, the release stated.
Zeel chairman Subhash Chandra said, “Looking at our performance one might not realise that the first half of the year was not as smooth, which is a testimony to the strength of our team. Being the number one TV entertainment network is a result of our strategy and the consistent hard work we have put in over the years. With the launch of ZEE5, we have taken a major leap towards our preparation for the future and we are confident that like TV business we will be in the leadership position in the digital space as well.”
Zeel CEO and managing director Punit Goenka said, “We launched our new digital platform ZEE5 with over 100,000 hours of content across 11 languages. We are happy with the initial response and are confident that the sheer depth and breadth of our content offering will enable it to become the number one digital entertainment platform in India. We have also focused on the peculiarities of Indian market and designed technological features to improve the user experience. Unlike most of the existing apps which are either focused on the English-speaking segment or the youth audience, ZEE5’s vast content catalogue is designed with an objective to cater to all sections of video viewing audience.”
Goenka added, “We are delighted with the strong operating and financial performance during the quarter. Domestic ad revenue growth of 24 per cent is driven by broad based recovery in advertising spends. With high visibility of product campaigns, improving consumer demand and GST related benefits trickling down to ad spends, we are confident of continued traction in advertising spending. The full-year domestic subscription revenue growth of 12 per cent is a tad lower than our initial expectations due to some unforeseen events. However, there is no change in our medium-term outlook for the same.”
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GECs
ZEEL overhauls sales structure to chase growth across TV and digital platforms
New structure sharpens digital push as viewing habits fragment fast
MUMBAI: Zee Entertainment Enterprises Ltd. is reshuffling its sales playbook as it looks to keep pace with a fast-changing media landscape, where audiences are scattered, screens are multiplying and advertisers are following the data.
According to media reports, the rejig is anchored in the company’s push to build a more integrated, data-led monetisation engine, one that can straddle both traditional television and fast-growing digital platforms with equal ease.
At the heart of the move is a reworked sales architecture designed to deliver cross-platform solutions. With connected TV gaining ground and digital consumption surging, ZEEL is aligning its teams to move quicker, think broader and sell smarter.
The restructuring is being led by chief operating officer, advertisement revenue, Sandeep Mehrotra, at a time when the company says it is seeing tremendous growth. The idea is simple: match the right talent to the right opportunity in a market that is anything but static.
As part of the overhaul, several long-serving executives have been elevated to chief sales officer roles across regions and content clusters. Sanjoy Chatterjee will head the east market, while Gunjarav Nayak takes charge of the west along with high-margin verticals such as hmg, brand works, intellectual properties and digital sales. Rajnish Gupta will oversee bengaluru and chennai markets alongside the kannada and tamil clusters.
In other key moves, Divjyot Dhanda will lead hyderabad and kochi markets and manage zee tv, zee keralam and the telugu cluster. Roshan Vasu Kotian will supervise a diverse portfolio including Zee Marathi, &tv, Zee Punjabi, Zee Anmol, Big Magic and Zee Biskope.
The company is also strengthening its bench, appointing national sales heads across retail, regional clusters, digital and brand solutions. Ankur Kapila’s appointment to lead digital sales signals a sharper push into a segment that continues to outpace traditional formats.
Behind the scenes, dedicated strategy and operations roles have been carved out for both linear and digital businesses. Nitin Shetty, Rajkiran Shrivastav and Priya Nambiar will take on key responsibilities to ensure the new structure runs with precision.
The broader aim is clear. ZEEL wants a bigger slice of advertising budgets that are steadily drifting towards digital and connected TV ecosystems. By integrating its offerings, the company hopes to deepen client relationships while unlocking new revenue streams.
The new structure takes effect immediately, with Mehrotra continuing to report to chief executive officer Punit Goenka and steer the company’s advertising revenue strategy. Senior executive Laxmi Shetty will support the transition, with her revised role expected to be announced soon.
In a market where content is everywhere but attention is scarce, ZEEL’s latest move is less about rearranging the org chart and more about staying in the game.
