Zee Entertainment Enterprises (ZEEL) Q4 99/00 earnings summary

Executive summary

• FY00 marked a shift from content-led broadcasting toward converged media, combining channels, cable distribution, internet, education and sports initiatives. Reach exceeded 200 million viewers across 75 countries.

• Zee TV held 38% viewership share in India; 16 of the top 20 programs across channels were from Zee.

Financial highlights

• Sales and services were Rs 4,759.3m and total income Rs 4,860.0m; reported PAT was Rs 2,672.4m, including a one-time film-library sale gain of Rs 1,851.0m.

• Excluding the Rs 188.95 crore one-time library export, gross revenue rose to Rs 297 crore from Rs 232 crore; EBITDA was Rs 114 crore vs Rs 91 crore and normalized PAT growth was 35%.

• Adjusted PAT excluding the library-sale gain was Rs 821m vs Rs 611m in FY99; operating profit was Rs 1,039m vs Rs 851m.

• Operating cash flow was Rs 1,843.7m vs an outflow of Rs 159.0m in FY99; investing cash outflow was Rs 5,954.6m, primarily reflecting subsidiary investment.

Outlook and guidance

• Strategy prioritized paid distribution, DTO/DTH, pay-per-view, premium channels, ISP and e-commerce, with SitiCable positioned as the last-mile platform.

• Distribution expansion, broadband convergence and content repurposing were expected to create new revenue streams; transition to distribution leadership would require substantial investment.

• SitiCable forecast revenue growth of ~40% annually; plans included more control rooms, 750 MHz network upgrades, digitization and cable internet/value-added services.

• Zee Interactive Learning Systems planned education TV, portal and interactive learning expansion; more than 300 learning centers were operating and ZED TV was planned.