Zee Entertainment Enterprises (ZEEL) Q4 01/02 earnings summary

Executive summary

• FY02 faced weak advertising and intense competition; consolidated turnover rose >11% and net profit grew >11.5% with cost control, per management.

• Consolidated revenue was Rs 1,155.5 crore and PAT Rs 194.6 crore; after prior-period items and earlier-year tax, net income was Rs 177.9 crore.

• Revenue growth shifted toward subscriptions, while film production, regional channels and international markets broadened the business mix.

Financial highlights

• Consolidated sales and services were Rs 1,076.2 crore; other income Rs 79.2 crore; total revenue Rs 1,155.5 crore.

• Consolidated EBITDA was Rs 383.4 crore, with 33.2% operating margin; PBT Rs 281.1 crore and PAT Rs 194.6 crore.

• Standalone total income rose 10.9% to Rs 483.2 crore; EBITDA increased 6.4% to Rs 199.7 crore, while PBT fell 17% to Rs 134.4 crore.

• Standalone PAT before prior-period adjustments was Rs 97.3 crore, down 29.8% YoY; net income after adjustments was Rs 79.8 crore.

• Consolidated advertising revenue was Rs 660.5 crore (57.2% of revenue); subscription revenue was Rs 316.9 crore.

Outlook and guidance

• Management viewed pay revenue as the main growth opportunity; domestic subscription revenue rose 50%, with domestic pay revenue up >230% after Zee TV and Zee News became pay channels.

• Management expected uplinking from India to widen the advertiser base and Conditional Access System (CAS) to help reduce pay-revenue leakage.

• International expansion was planned through new markets and infrastructure; international revenue grew ~20% despite weak global conditions.

• Regional and niche markets were expected to become significant growth areas over the next five years; Telugu and Urdu channel launches were planned.