India’s Zee Entertainment Enterprises Ltd (ZEEL), the Essel Group-backed broadcasting powerhouse, saw its net profits rise 26.65 per cent in the quarter to September 30th. Revenues, however, were flat with growth of just 0.95 per cent with poor advertising blamed. Ad-revenues were down 4.2 per cent, but overall the company saved 2.3 per cent by cutting costs.
Zeel’s chairman Subhash Chandra said, “The Indian economy continues to grow at a good pace but high inflation and the resultant tight money policy is taking its toll. While the economic situation in India is far better than most other countries, market sentiment continues to be cautious. This caution has affected advertising spends on television, which has witnessed some deceleration. The good part is that the television economy continues to grow robustly on the back of subscriber growth and digitisation.”
Zeel MD and CEO Punit Goenka added: “Zee Entertainment has a wide portfolio of television channels and we have seen some gains and some losses in our market share during the quarter. We are confident that we would continue to grow our business profitability in a sustained manner. During the quarter, we have seen a healthy increase in our operating margins, partly due to lower sports losses and partly due to better cost efficiency measures. Though advertising spends are better sequentially, overall trends remain subdued and FY’2012 does look to be a year of tepid growth in advertising spends on television. Our strategy during the last few years has been to create a formidable entertainment enterprise and invest in the business in a focused disciplined way.”