Zee Entertainment Enterprises Quarterly Result & Conference Call Highlights

Financial highlights

Zee Entertainment reports 613.99% increase  in consolidated net profit to Rs 208.77 Cr  in  Q1FY22  however Profit decreased by 23.33% from last quarter which was at  Rs 272 Cr

A decent increase of about 38.08% in the sales to Rs 1,774.98 Cr from Rs 1,312.03 Cr was observed for the quarter ended June 2021

The company’s EBITDA (earnings before interest, tax, depreciation and amortisation) for the December quarter increased by 210.64 % to Rs 334.25  crore, while margins stood at 18.83 % against last year

Overall business highlights

Strong slate of movies across Hindi, Tamil, Telugu, Marathi and Punjabi languages being planned for releases starting H2FY22

Opening of cinemas across the country to boost prospects of theatrical revenue in second half of the fiscal

Company will revamp Hindi, Marathi, and Tamil programming line-up in Q2FY22

Business was steadily recovery performance in second half. first quarter performance has been significantly impacted .

Company has built strong content which is in pipeline

Due to on restriction in most of the places in Maharashtra company had to move shoot locations to safer place

Zee entertainer continues to be India's number 2 TV entertainment

Zee music company continued to be second most subscribed Indian music channel on YouTube and the labour witness 80% growth in YouTube videos

ZEE5 has been launched in the US, which should help grow international presence

Ad revenue highlights :

 ZEE5 revenues were impacted by lower ad revenues and subscription revenues had only part impact in the quarter of user growth

Recovery in advertisement much lower than anticipated advertisement revenue will bounce back once things are in control as ad revenue were impacted

Investments :

Company decided to continue to invest in broadcast and digital in broadcast  as they are specifically focusing to improve their market share Hindi Tamil and Marathi with the launch of new shows and  increase in number of hours.

Zee will be launching 30 plus new shows in quarter 2 alone across the network in digital .

Movie production has also suffered hence will be postponed to FY23. The company had planned to release 20 movies in FY22, but now it would not be achieved.

Major changes in cost occurred :

Company had to travel to other cities where there were lesser restriction and because of this programming costs were increased which impacted the performance this quarter .

There was additional spend of rupees 27 crore on shifting location shooting to a safer place

Subscriptions and ZEE5 :

The new strategy was to show big-ticket launches in Q1. Radhe’ and the airing of ‘Friends Reunion’ added to Q1 growth and helped boost other content consumption as well.

ZEE5 has been launched in the US, which should help grow international presence , which is estimated to be 40-50mn currently and expected to grow to 180-200mn

Subscribers now make up more than 40% gross additional . Subscription pricing changes under NTO 2.0 would cause disruption and will hurt revenues for next two quarter, post which it expects growth again. company’s viewership share dropped in the quarter; but it was increased in July.

The Rs499 annual plan was launched in March, during the telecast of ‘Radhe’. Though the overall revenue increase was limited due to the ad revenues revenue impact , subscription saw good growth . As those who joined Zee5 for viewing ‘Radhe’ has increased subscription number which has  improved revenue which will be reflected in next quarter as its telecast was in Q2FY22 quarter .

Other major highlights

Dish TV will make payment towards overdue and balance left is  Rs3.6bn which it is scheduled to pay by end-FY22.

Please refer to the attached file for detailed Analysis :