Zee Entertainment Enterprises has reported a consolidated net profit of INR 1.63 billion in the fourth quarter, a fall of 16% on the same period last year, as it looks to the rewards of mandatory digitisation in India's cable TV network.
Zee's consolidated revenues in the three months to 31 March 2012 were INR 8.69 billion, up 9% on the INR 7.95 billion reported in the corresponding period of 2011.
Operating profit for the quarter fell 28% to INR 1.6 billion from INR 2.22 billion a year earlier – due, according to the Subhash Chandra chaired company, to a 24% rise in expenses.
Advertising revenues also fell by 12% to INR 4.15 billion during the fourth quarter, due to a comparative reduction in the TV network's cricket properties this year.
The group's sports business registered a loss of INR 588 million during the quarter, and INR 1.48 billion for the entire 2011/2012 financial year. However, Zee said: "Advertising revenues from non-sports businesses have increased, though marginally. This is reflective of the overall weakness in advertising spends".
Zee's subscription revenues, at INR 4.02 billion, rose 30% compared with those in the fourth quarter last year. These were split into domestic subscription revenues of INR 2.97 billion, and international subscription revenues of INR 1.05 billion. The domestic revenues for this fourth quarter, however, included INR 506 million earned between July 2011 and March 2012 from the MediaPro distribution joint venture between Zee Turner and Star Den.
"FY2013 is expected to be a landmark year for the television media industry. The industry is gearing up for a big change with deadline for implementing digital addressable system (DAS) in the four metros approaching on 30 June 2012," said Subhash Chandra, chairman, Zee Entertainment Enterprises.
"Digitisation will bring about improvements in addressability and capacity, thereby improving the quality of service to consumers and creating a better financial model for all players in the value chain."
Punit Goenka, managing director and chief executive, Zee Entertainment Enterprises added: "During the quarter, we have seen significant improvement in our operating performance across all genres. The flagship channel, Zee TV, has improved its market share noticeably. We are confident that we would further enhance our market share through our planned content line up and continue to grow our business profitability in a sustained manner."
"In line with our strategy of growth through focused disciplined investments, we launched India's first and only OTT (over-the-top) distribution platform, Ditto TV, with an aim to offer live TV channels and on demand video content to consumers on multiple platforms including mobile phones, tablets, laptops, desktops and connected TVs," Goenka said.
The fourth quarter has also seen Zee's launch of the premium sports channel Ten Golf and a number of high definition channels.
Zee's net profit for the entire financial year 2011-12 was recorded at INR 5.91 billion, a drop of 6% on last year's results. Revenue rose just 1% to 30.41 billion, compared with INR 30.08 billion in FY2010-11. A 5% increase in costs, from INR 21.87 billion to INR 23.01 billion was registered for the year.