Zee Entertainment reports a 30% jump in India ad sales due to demonetization

Zee Entertainment Enterprises, the country’s largest listed media company, reported a whopping 30% jump in advertising sales in India as the comparison period of last year was hit by demonetization.

Domestic advertising revenue was at Rs 11,373 mn (Rs 1,137 cr) on a like to like basis, excluding the sports business that was sold to Sony.

Total advertising revenue for the third quarter was Rs 1,202 cr, up 25.8%. International advertising revenue for the quarter was Rs. 647 million.

In the same quarter last year, the company’s total ad revenue had risen by only 3.43%, while subscription was up 13.73%, due to the impact of demonetisation.

“The strong growth, though on a low base, was led by the sharp rebound in the advertising spends across categories. Adjusted for sports, advertising revenue of our international business was flat YoY as growth in some geographies was offset by currency appreciation and ongoing issues in some of the territories,” the company said.

Domestic subscription revenue rose by only 7.5% to Rs 404 cr. Total subscription revenue for the quarter was Rs 502 cr.

“Domestic subscription revenue for Q3FY17 had benefitted from early closure of content contracts with our distributors, resulting in a high base,” the company said.

“However, in the current year the contract renewal negotiations are taking slightly longer due to ongoing litigations regarding TRAI’s tariff order. Despite the delay, the full year outlook for domestic subscription revenue growth remains largely unaltered.”

Out of this, international subscription revenue stood at Rs 981 million.

Total revenue for the company was Rs 1,838 cr — up 12.1%, while Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) was Rs 594 cr — up 15.2%.

Net profit for the quarter was Rs 3,22 cr, up 29% on year.

EBITDA margin for the quarter was at 32.3%.

“It is very heartening to see the rebound in the economy after four quarters,” said Subhash Chandra, Chairman, ZEEL.

“The initiatives taken by the government had some short-term impact on the growth but these measures will strengthen the economy in the long run.

“Indian media and entertainment sector will be a beneficiary of this growth story as people spend more time and money on consuming entertainment content.”

Punit Goenka, Managing Director & Chief Executive Officer said the period of slow growth is now behind the company. “Ad spends have bounced back strongly and outlook remains encouraging. The recent cut in GST rates across a wide category of products should aid the growth,” he added.

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