| The company's consolidated revenues of
Rs 3,231 million is up by 17.7 per cent, while the operating profit
increased by 26.2 per cent to Rs 1,014 million.
on the second quarter performance of his company, Zee Tele CMD Subhash
Chandra said, "The second quarter witnessed visible recovery in
our advertising business, growing 20.3 per cent from Rs 1,212 million
in 1Q FY2004 to Rs 1,458 million. This is in line with our expectations,
as shared by me previously."
Zee's scrip closed today at the Bombay Stock Exchange at Rs 137.45.
Chandra further added: "Our subscription based businesses also
continued to grow. Subscription revenues of the company have in
fact exceeded advertising revenues for the second consecutive quarter.
Zee is by far the No. 1 South Asian television network in every
single market of the world and is further consolidating its position."
Chandra told CNBC-TV18 that subscription revenue growth was sustainable.
He said ad revenues in Q1 were sluggish due to the impact of a slow
economy and cricket World Cup hangover. However, he pointed out
that FMCG, as part of the advertising pie, is on the decline.
Commenting on Zee's direct-to-home rollout which still doesn't
have the popular Star, Sony or ESPN Star Sports channels, Chandra
said he had already secured more than 15,000 subscribers. "There
is demand from all over the country. We are actually not being able
to meet the demand. We have sports channels in terms of Doordarshan
(Sports) and Ten Sports. As the numbers grow I'm sure they (Star)
will come on-board," he was quoted as saying.
The company clocked consolidated revenues of Rs 3,231 million,
up 17.7 per cent, while operating profit increased by 26.2 per cent
to Rs. 1,014 million.
These numbers are after consolidating the financials of ETC Networks
Limited (ETC) and Padmalaya Telefilms Limited (PTL) for the second
quarter of FY2004. The Board of Directors in its meeting held today,
has taken on record the unaudited consolidated financial results
of Zee Telefilms Limited and its subsidiaries.
"The company's financial condition has gained further strength
during the quarter. While on the one hand, there has been a reduction
of Rs 1.59 billion in gross debt since 30 June 2003, the debtors
position has further improved to 150 days. We expect to bring debtors
down to normal levels before the end of FY2004," Hitesh Vakil,
Zee's director of finance, said.
Holding forth on the business outlook, Chandra said, "The
improving economic environment augurs well for all our domestic
businesses. As widely reported in the press also, key sectors of
advertising economy including FMCG are yet awaiting the beneficial
impact of good monsoons.
"This should reflect in the second half of the year. We believe
that the company's unique combination of attributes and initiatives
will make Zee an even more attractive investment option for investors
who share our confidence in the company's long-term growth potential."
Some highlights of the second quarter performance are as follows:
*Subscription revenue was Rs 1,489 million for the second quarter
ended 30 September, 2003, an increase of 22.9 per cent as compared
to the corresponding period last fiscal.
*Advertisement revenue was Rs 1,458 million for the second quarter
ended 30 September, 2003, higher by 2.4 per cent as compared to
the corresponding period last fiscal.
*Domestic subscription revenue was Rs 538 million for the second
quarter under review, an increase of 45.8 percent as compared to
the corresponding period last fiscal.
*International subscription revenue was higher by 13.0 per cent
over second quarter last fiscal.
*Consolidated debt as on 30 September, 2003 reduced by Rs 1.59
billion compared to 30 June, 2003.
Zee's revenues are generated primarily from advertising sales and
subscription revenues. Other sales and services include revenues
from film production and distribution, music publishing, syndication
and education sales.
The company said that an increase of 2.4 per cent in the advertising
revenue, as compared to the corresponding quarter last fiscal, was
also because of the fact that effect the cricket World Cup had on
advertising spend of corporates had started waning.
Overall subscription revenues, including domestic and international
businesses, registered an increase of 22.9 per cent over the second
quarter of the corresponding period last fiscal. Domestic pay revenues
have shown a steady growth to Rs 538 million, which were 45.8 per
cent higher than the corresponding period last year and 5.1 per
cent higher than the first quarter of FY2004.
This, the company said, has been achieved in the face of uncertainty
on CAS rollout. Paid connectivity of Zee bouquet is 4.6 million
homes. Other sales and services increased because of consolidation
of PTL amounting to Rs 170 million.
Zee's main expenses include transmission and programming cost,
employee cost and administrative cost. Overall, the primary reason
for the 23.2 per cent increase in programming and transmission cost
is due to consolidation of PTL during this quarter, whereas it was
not consolidated during the corresponding period last year.
Content business includes all broadcasting and content production
companies in India and abroad of Zee Telefilms Limited, ETC Networks
Limited. Access business includes Siticable, Zee Turner and distribution
segment of ZTL (earlier ElZee).
Film production / distribution business includes Padmalaya Enterprises
Zee is India's largest vertically integrated media and entertainment
company. It is the largest producer and aggregator of Hindi programming
in the world with an extensive library housing television content,
movie titles and news content. Zee is also India's largest cable
distributor through its wholly owned subsidiary, Siticable. Zee's
channels are widely distributed across many countries, especially
for South Asian audiences.
It is a significant player in the film production, music publishing
and education business. Zee's well known brands include Zee TV,
Zee Cinema, Zee News, Zee Music, Alpha Marathi, Alpha Punjabi, Alpha
Bangla, Alpha Gujarati, Zee English, Zee MGM and Trendz.
foreign shareholding in Zee Tele 62%