Last updated: 18 Aug, 2020 | 02:28 pm
Profit nearly wiped out: Zee Entertainment Enterprises has reported a 94% drop in consolidated net profit to ₹29.80 crore, on the back of fall in advertisement revenues. Analysts had earlier estimated a net profit of about ₹330 crore.
Revenues decline: Zee Entertainment’s revenue fell 35% over the year-ago period to Rs 1,312 crore in the three months through June. The fall was mainly on account of decline in ad revenues (fall of 65% on-year to ₹421 crore). “Despite a sharp increase in viewership across mediums, monetization was really weak in Apr-May leading to 66% YoY decline in domestic advertising revenues for Zee Entertainment.”
Subscription revenues rise: The firm has reported a robust rise in subscription revenues, as consumers subscribed to its streaming service Zee5 in the quarter. Subscription revenue rose 5% to Rs 744 crore.
Subhash Chandra steps down: Founder of Essel Group Subhash Chandra has resigned as a non-executive director. The board has appointed R Gopalan as the new chairman. ZEE said that as chairman emeritus, Subhash Chandra will continue to guide the board and company's senior management and his position will not carry any remuneration.
Q1FY21 results were expected to be weak for the broadcasting industry. Advertising revenue for broadcasters has been drying up due to a sustained economic slowdown over the last year. Further, lack of new shows due to the lockdown further impacted the overall revenues. ICICI Direct estimated broadcasters to lose up to 60% of revenue due to the lockdown.
Zee Ltd said that the group has taken various steps aimed at augmenting liquidity, conserving cash including various cost saving initiatives, and sale of non-core and other assets. Zee said that as lockdown restrictions begin to relax, it will start to produce new content in accordance with government directives, which will result in increase in business activity for the group.
Consensus recommendation: Buy (Based on views of 23 analysts from external research institutions)