Zee Q2 profit up 70%; Punit Goenka re-appointed MD for 5 years

Zee Entertainment beat Street estimates posting a 70% y-o-y growth in consolidated net profit at Rs 209 crore for the quarter ended September. Consolidated revenue for the quarter fell 18% y-o-y to Rs 2,001 crore in the reporting period, as advertising revenue remained weak during the quarter.

The company also re-appointed Punit Goenka as Zee’s MD& CEO for a period of five years till December 31, 2029.

Analysts polled by Bloomberg had pegged Zee’s net profit and revenue for the quarter at Rs 141 crore and Rs 2,086 crore respectively. Shares of Zee ended 5.29% higher on the BSE at Rs 132.40 apiece on Friday.

Earnings before interest, tax, depreciation and amortisation (Ebitda) fell nearly 3% to Rs 323 crore in Q2 versus the year-ago period, while margins improved by 260 basis points to 16.2% versus 13.6% reported a year ago. In its investor presentation on Friday, Zee said that it aspired to deliver Ebitda margins between 18-20% in the upcoming quarters.

The company said prudent cost discipline and focused execution had enabled an improvement in Ebitda margins in a challenging macro environment. The decline in operating costs was driven by lower programming and technology expenses. It was also monitoring every line item in its P&L, the company said.

Domestic advertising revenue for the quarter declined 9% year-on-year, impacted by a muted ad spending environment in Q2. While ad spending is picking up with the onset of the festive season, sustained recovery remains the key, it said.

Subscription revenue saw healthy growth of 9% y-o-y during the quarter driven by subscription revenue post implementation of NTO 3.0 as well as ZEE5.

Other sales and services declined 77% y-o-y as the previous year period had higher theatrical revenue from Gadar 2 and other films. Financial Express