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Q309: IBN18 Ups Viacom18 Stake; ZEE News To Shut Zee Gujarati; ZEEL


IBN18 Broadcast has acquired 43.4 percent stake in Viacom18 Media, which runs MTV, VH1, Nickelodeon and Colors. With this, IBN18’s stake in Viacom18 has risen from 6.6 percent to 50 percent. The buyout from B K Holdings Ltd, a subsidiary of Television Eighteen India, was priced at $62.5 million (Rs 3051.3 million), which included an option price of $12 million.

IBN18 has registered a net loss of Rs 219 million, a 15 percent increase since Q2 losses of Rs 189.4 million on a consolidated basis. Net sales were up at Rs 741.72 million from Rs 307.68 million QoQ. Total expenditure has risen from Rs 434 million in Q2 to Rs 1051 million. Revenues for the third quarter reflected income and expenses from its merger with Jagran TV, which runs IBN7, the Hindi news channel. Its other regional news channel IBN Lokmat News has incurred a loss of Rs 71.4 million in the quarter, down from Rs 96.4 million in Q2. The 50:50 joint venture with the Lokmat Group has caused IBN18 to lose Rs. 35.7 million this quarter.

In line with the company’s plans to raise Rs 4 billion for its expansion plans, IBN18 has raised Rs. 1.14 billion through qualified institutional placement (QIP) by allotting 11,204,508 equity shares of Rs. 2 each issued at Rs 102 per share to buyers. Out of these funds raised, it has utilised Rs. 50.7 million towards QIP expenses.

ZEE News

Zee News has posted a 31 percent rise in net profits for the third quarter at Rs 151.3 million. It registered a rise of 11.9 percent in its topline from Rs 1.27 billion in Q2 to Rs 1.43 billion. Total expenditure rose by 6 percent to Rs 1130.8 million. The company has also announced that they will shut down Zee Gujarati starting April 1st 2009.

EBITDA margins rose to 20.9 percent for Q3 from 16.5 percent in Q2 for the channel. Consolidated EBITDA stood at Rs 299 million. Subscription revenue and advertising revenues contributed to the topline, recording a rise of 38.8 percent and 46.4 percent YoY respectively. Subscription revenue stood at Rs 236 million while advertising rose to Rs 1.1 billion.

Zee News channels’ viewership share in the total C&S Universe grew to 5.47% in Q3-09. Viewership of Zee News Limited channels grew by 31 percent over the third quarter last fiscal.


Zee Entertainment Enterprises Ltd (ZEEL) reported a 52.8 percent dip in net profits of Rs 839.7 million in Q3-09 over consolidated revenues of Rs 5.46 billion. Its revenues declined by 4.56 percent from Rs 5.71 billion last quarter.
EBITDA margin dropped to 20.45 percent from 16.5 percent due to increase in selling expenses. ZEEL’s advertising revenues of Rs 2684 million was attributed to the economic slowdown and strike of TV production crew in November 2008. During the quarter, domestic subscription revenues, inclusive of revenue from domestic DTH operators stood at Rs 1.13 billion while international subscription revenues were Rs 1.15 billion. Other services and sales from syndications, education business (Rs 58 million), film distribution (Rs 36 million), play out and production services, events and commission on advertisements and subscription sales registered at Rs. 497 million.

While total expenses remained similar to Rs 4294 million posted last quarter at Rs 4339 million, programming and operating costs increased to Rs 2.68 million due to the launches of Zee Next and Zee Entertainment Studio, as well as higher cost of movie rights and advertising revenues on telecast of ICL Matches passed on to Essel Sports Limited. The sports business revenue (Zee Sports and Ten Sports) stood at Rs 1.16 billion. ZES, the film production and distribution business of the company, posted revenues of Rs 36 million and incurred costs of Rs 139 million in the quarter.
The company clocked financial expenses of Rs 386 million in the third quarter including losses of Rs 116 million on account of Forex derivative transaction. This included Rs 147 million incurred by the company towards exchange on remittance of advertising and subscription revenues from India to Ten Sports.

ZEEL hopes to evade start up losses from its Hindi general entertainment channel Zee NEXT by hiving it off to its wholly-owed subsidiary Asia Today Limited. The subsidiary will invite third party investors to invest in ZEE NEXT. It also announced a proposed KIDS channel which will also seek 80 percent investment from third party investors. Asia Today itself will invest 20 percent of the required investment in the form of Convertible Debenture (CD) within 5 year period.

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