Zee Entertainment Ltd‘s advertising revenues have grown for the first time in three quarters with a 9.33% sequential increase to Rs. 2707 million in the quarter ended December 2009. Punit Goenka, Managing Director and Chief Executive Officer, ZEEL, said that market sentiments on ad spends have improved compared to earlier quarters. The festive season also contributed to the growth.
The company has witnessed a 32% rise in consolidated net profits to Rs. 1464 million in the December quarter over the September quarter despite total revenues falling 1.78% to Rs. 5309 million.
Expenditure has reduced by 2.16% to Rs. 3813 million and the company witnessed an EBITDA of Rs. 1,573 million with EBITDA margins at 29.6%.There were no films release in the quarter and the films division registered EBIT losses of Rs 99 million.
Restructuring: After Hindi Channels, Now Time For Animation, Sports & Education
ZEEL owns Zee TV, Zee Cinema, Zee Premier, Zee Action, Zee Classic, Ten Sports, Zee Sports, Zee Cafe, Zee Studio, Zee Trendz, Zee Jagran, Zing, ETC Music, ETC Punjabi, Zee Motion Pictures and Zee Limelight.
The scheduled restructuring of six of Zee News’ regional-General Entertainment Category channels into ZEEL will be complete by March, according to its December newsletter (PDF). Zee claims to have 20% of the market share in the Hindi GEC space, sharing its position as #2 with Star Plus while Colors by Viacom18 continues to be #1. It also said its Hindi movies bouquet garnered a leading 33% genre viewership share this quarter; Zee Café garnered 27% channel share for the quarter in its genre;
Goenka has noted that this fiscal, the company has taken steps to consolidate its holdings across genres as it readies “for a digital environment that would operate with very different dynamics as compared to today.”
ETC Networks, the Hindi music and entertainment subsidiary of ZEEL, has acquired 100% controlling stake in Cornershop Entertainment Company Limited, which is part of the Essel Group‘s network of companies. The merger will be effective from March 31, 2010.
Cornershop owns three subsidiaries:
- Cornershop Animation Company Private Limited, which in turn has two divisions – Flickr Animation Studios and My7575.
- Digital Media Convergence Limited and
- Re-Med Services Private Limited.
Established in 2005, it now has 2 studios – one in Mumbai and a production studio in Pune. The company creates animation content for TV commercials and promos, offers design and production services for films and long format TV series, packaging, graphics and in-game modeling for PC, console and mobile games. Its work includes the animated ads for Bajaj Allianz, SBI Mutual Fund, Smyle, Big Bazaar, LG Dynamite handsets and Tiger Balm.
Acquires 45% Additional Stake in Ten Sports
ZEEL has upped its stake in Dubai based Taj TV Mauritius, which it co-owned with Bukhatir Group. Taj TV owns Ten Sports and Cricket Plus (in North America), ART Prime Sports in the Middle East, Football Channel in Singapore and Goal TV 1 and Goal TV 2 in Asia. ZEEL already owns a sports channel Zee Sports.
ZEEL has consolidated its position in the cricket front by acquiring the additional 45% stake from Bukhatir Group for $44.145 million in an all cash deal. In 2006, ZEEL had acquired 50% in Taj TV for $114 million and this move now takes its stake to 95% in Ten Sports.
Demerges Education Into Zee Learn Ltd
The company has also approved the demerger of its education business from ETC Networks into Zee Interactive Learning Systems (Zee Learn) from April 1, 2010. Businesses include Kidzee, Kidzee High, Kidzcare, Zee Institute of Media Arts (ZIMA), Zee Institute of Creative Arts (ZICA) and Zee Career Academy (ZCA). Currently ETC is a 50.18% subsidiary of ZEEL. Its education operations registered revenues of Rs 251 million in FY 2009 and Rs. 70.4 million in the December 2009 quarter which is up sequentially 43% from Rs. 49.2 million.
Subscription Revenues Decline
Subscription revenues have remained flat in the quarter, showing a 1.27% rise to Rs. 2466 million. Revenues from domestic subscription have fallen 3% year on year to Rs 1,453 million while international subscriptions have also fallen 12% to Rs 1,014 million. DTH revenues rose 23% quarter on quarter to Rs 632 million, which included a non recurring amount of Rs 49.8 million.