Euro 2024 Serbia's Return to the European Championship.docx
Smc Zee 18july09
1. Zee entertainment limited July 17, 2009
Quarterly Performance (Consolidated)
For the quarter ended June 2009, consolidated operating revenues dipped 12% at Rs 475.93
crore. OPM for the quarter dipped 200bps at 24.6%. The resultant operating profit dipped 19%
at Rs 117.01 crore.
Current Price: Rs. 180.8
For the quarter, other income increased 17% at Rs 32.51 crore which mainly includes treasury
income. Interest cost for the quarter decreased 57% at Rs 9.11 crore on the back of provision of
lower mark to market loss on derivatives positions of Rs 2.4 crore against Rs 11 crore in the
corresponding quarter previous year, lower effective interest rate and repayment of debt.
STOCK DATA Depreciation charge for the quarter increased 36% at Rs 7.50 crore. The resultant PBT
decreased 8% at Rs 132.91 crore.
BSE Code 505537
NSE Symbol ZEEL Provision for taxation for the quarter was flat at Rs 41.59 crore with the effective tax rate up
250bps at 31.3%. The resultant PAT dipped 1% at Rs 91.32 crore. Minority interest pertaining to
Reuters ZEE.BO
share of losses of Zee Turner and Taj TV for the quarter was at Rs 10.58 crore and the resultant
Bloomberg Z IN
net profit for the quarter stood at Rs 101.90 crore down 1%. Reported net profit after prior period
tax write-back of Rs 57.38 crore in the corresponding quarter previous year was down 36% at
Rs 101.90 crore
VALUE PARAMETERS
Financial Results In Cr.
Price (Rs) 180.8
Particulars Qtr Ending Qtr Ending
52 W H/L(Rs) 239.00/88.10
Mkt. Cap.(Rs Cr) 7846.72 June 09 June 08 Var. (%)
Latest Equity(Subscribed) 43.4 Sales 475.93 541.96 -12
Latest Reserve 2299.6
OPM (%) 24.60 26.60
Latest EPS -Unit Curr. 5.77
Lat. P/E 31.33 OP 117.01 144.18 -19
Latest Bookvalue -Unit Curr. 53.99 Other income 32.51 27.80 17
Latest P/BV 3.35 PBIDT 149.52 171.98 -13
Div. Yield (%) 1.11
Interest 9.11 21.41 -57
Face Value 1.00
PBDT 140.41 150.57 -7
Depreciation 7.50 5.53 36
PBT before EO 132.91 145.04 -8
SHARE HOLDING PATTERN (%) EO 0.00 0.00
Description as on % of Holding PBT after EO 132.91 145.04 -8
30/06/2009 Tax 41.59 41.71 0
Foreign 30
PAT 91.32 103.33 -12
Institutions 20.77
Govt Holding 0 Minority interest -10.58 0.60 LP
Non Promoter Corporate Holding 4.7 Net Profit 101.90 102.73 -1
Total Promoters 41.5
Prior period tax 0.00 -57.38
Total Public & Others 3.04
Net Profit 101.90 160.11 -36
EPS (Rs) 2.35 3.69
Management Views
Sports business
Zee Sports and Ten Sports continued their strong presence in the sports genre. During the
quarter, Ten Sports aired the Indian cricket team's tour of West Indies. Domestic soccer
tournaments such as the I-League and Santosh Trophy were aired during the quarter and met
with relative success. Ten Sports would be airing some of the key fixtures featuring the Indian
cricket team this quarter, including a tri-series featuring New Zealand and Sri Lanka as also a
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2. one day series against Zimbabwe. Other non cricket sports to be showcased on Ten Sports and
Zee Sports includes the UEFA Champions League soccer and the national soccer league-
Nehru Cup.
The Sports business revenue during the first quarter of FY10 were Rs 87 crore up from Rs 76.7
crore in the sequential quarter. There was a loss at operating level of Rs 27.2 crore against
profit of Rs 7.51 crore.
Consolidated Segment Results In Cr.
Particulars Qtr Ending Qtr Ending
June 09 June 08 Var. (%) % of total
Segment Revenue
Content & Broadcasting 464.06 525.56 -12 98
Education 8.87 6.2 43 2
Film Prodn. & Distribution 3 10.2 -71 1
Total Revenue 475.93 541.96 -12 100
Less inter-segment revenue 0 0
Net Revenue 475.93 541.96 -12
Segment PBITA
Content & Broadcasting 117.22 124.48 -6 105
Education -0.06 0.22 PL 0
Film Prodn. & Distribution -5.41 4.99 PL -5
Total PBITA 111.75 129.69 -14 100
Less Finance Cost 8.47 7.13 19
Less EO 0 0
Add Other Income 29.63 22.48 32
PBT 132.91 145.04 -8
Segment Assets
Content & Broadcasting 3102.85 2714.49 14 90
Education 13.28 7.44 78 0
Film Prodn. & Distribution -18.73 48.52 -1
Others 354.22 284.76 24 10
Total Assets 3451.62 3055.21 13 100
Performance of other channels
The flagship Hindi General Entertainment Channel Zee TV delivered 231 weekly GRPs up from
208 weekly GRPs on an average during this quarter and attained a channel share of 21% in its
genre. The channel has averaged 236 GRPs for the month of June 2009. The relative channel
share of Zee TV in the fourth quarter improved over the third quarter and has remained steady
overall across the fiscal 2009.
The channel dominated its genre in the Top 100 programme chart, with a weekly average of 29
down from 32 in the sequential quarter out of the top 100 programmes. It has 24 programmes in
the Top 50 programme chart. This quarter the channel launched two new fiction shows: Pavitra
Risshta and Aap Ki Antra. Both these shows have been well received by audiences and have
grown steadily in ratings, consistently featuring in the top 50 weekly charts.
The Hindi movies channel Zee Cinema averaged 161 GRPs and captured over 35% channel
share on a like to like basis this quarter. Initiatives such as the children movie festival Dopahar
Zee Cinema Par enhanced the channel's offering to its viewers. The channel also aired
blockbusters such as Jannat, Race, Jodha Akbar etc. Despite a big ticket cricket tournament on
a competing movie channel, the channel's ratings continued to grow this quarter. In the coming
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3. quarter, the channel would be airing hit movies of last year like Fashion, Welcome to Sajjanpur,
Kismet Konnection etc.
The network operates three Hindi movies channels Zee Premier, Zee Action and Zee Classic
specifically for the digital platforms. The popularity of these channels has been growing with the
fast expanding base of digital TV households in India.
Zee Café, the network's English entertainment offering, premiered the latest season of 'Til
Death, Just Shoot Me, Sutasi, America's Next Top Model (Cycle 11) and Battlestar Galactica
(Season 4.5) in the quarter. Victoria's Secret 2008 Fashion Show and Conan O'Brien's The
Tonight Show were the other highlights of the quarter. The channel would soon be airing the
latest seasons of Grey's Anatomy, America's Most Smartest Model as also the big-ticket event
of the year, Emmy Awards Live. This strong offering of the channel helped it garner 19%
channel share for the quarter in its genre.
The English movies channel Zee Studio acquired rights to various blockbusters including
movies from studios such as BVITV, WEG, Hanway and MGM. In addition, the channel also tied
up the rights to several critically acclaimed titles from noted film directors like Takeshi Kitano,
Peter Weir, Wim Wenders, Bernardo Bertolucci etc. as also a set of over 20 'Made-for-TV
movies' that have never been aired before in India.
Zee Entertainment Studio (ZES) – Film Production & Distribution Business
Zee Entertainment Studio (ZES), the Film Production & Distribution Business of the company
released two feature films in the quarter- one each in Bengali and Marathi. ZES, as a division of
ZEEL, registered revenues of Rs 3 crore and incurred costs of Rs 8.41 crore in the current
quarter. Revenues were impacted due to the two month long nationwide multiplex strike.
Management Comments
Mr Subhash Chandra, Chairman, stated,
"The media and entertainment industry in India continues to witness a shift in structure, driven
primarily by a growing consumer preference for digital television. More than two million
consumers opted for digital DTH services during the quarter. The quick adoption of digital
services across population strata is indicative of a quantum change that will transform the
business of television broadcasting in India in the foreseeable future.
This quarter posed a big challenge on the advertising revenue front. On one hand the macro
advertising environment remained weak and on the other, two major sports events took away
revenues from entertainment channels. Intense competition in the Hindi entertainment
segment also had its impact. We do see early signs of recovery in advertising revenues though
overall ad spends on television may not be as buoyant as they were in the last few years.
Growth in digital television homes in the country augurs well for all pay broadcasters. Reflecting
the strength of Zee channels, our revenues from the DTH segment have continued to grow, as
anticipated. Over the next few years, our business model would undergo a shift in favour of a
subscription led model, as is the case globally. Being the largest pay network of this country,
Zee will be an integral part and beneficiary of this success story."
Mr Punit Goenka, Whole Time Director, commented
"Our strategy during the last few years has been to create a formidable entertainment
enterprise, and invest in the business in a focused, disciplined way. During the quarter,
performance on advertising revenue stream was adversely affected by the macro situation. We
focused on the factors under our control: operating efficiencies, content improvements and
balance sheet management.
Our network viewership base grew this quarter. Efforts of the company to attain leadership
position across all genres yielded positive results with Zee TV achieving the number one
position after a gap of several years. The heartening aspect of Zee TV's growth has been
consecutive success of six of our latest shows, leading to a steady and sustainable rise in
viewership. Going forward, our endeavour is to continue to gain viewership by offering best in
class content.
We focused on improving operating efficiencies across businesses and across functions. We
made significant reductions across cost heads, without sacrificing quality. Our choice to
strengthen subscription based service has proved correct and timely, and DTH revenue
streams have performed better. As a result, despite a 29% drop in advertising revenues as
compared to the first quarter of last fiscal, our operating margins have dropped only by 200
basis points. We are hopeful that a steady growth in ratings will help ZEEL deliver better
performance in the coming quarters. Our focus on the balance sheet led to reduction of debt
during the quarter and consequently interest cost came down."
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