ZEEL reports a 3% decline in operating revenue to Rs 2,045.7 crore for Q3 FY24

Zee Entertainment Enterprises Limited (ZEEL) recently released its third-quarter financial results for fiscal year 2023-24, highlighting a 3% decline in operating revenue compared to the same period in the previous year. The company reported operating revenue of Rs 2,045.7 crore for Q3 FY24, down from Rs 2,108.8 crore in Q3 FY23. This decline was accompanied by a 3.3% drop in advertising revenue, which stood at Rs 1,027.4 crore in Q3 FY24, down from Rs 1,063.4 crore in the corresponding period last year.

Despite the decrease in operating revenue, ZEEL’s net profit for Q3 FY24 witnessed a significant improvement, reaching Rs 58.5 crore, compared to Rs 24.32 crore in Q3 FY23. The company attributed this increase in net profit to various factors, including a Y-o-Y revenue jump of 15% in its digital platform ZEE5.

However, the decline in advertising revenue was primarily influenced by factors such as the impact of cricket events during the quarter and a slower-than-expected recovery in the overall advertising environment. The company noted that although Q3 saw some seasonal festive uptick, the pace of ad environment recovery remained sluggish.

Subscription revenue, on the other hand, witnessed a 3% increase in Q3 FY24, amounting to Rs 921.3 crore compared to Rs 894.4 crore in Q3 FY23. ZEEL attributed this growth to revised subscription rates following the implementation of NTO 3.0 and the contribution from its digital business, ZEE5.

Despite these positive aspects, ZEEL reported a decline in EBITDA by 42.9%, from Rs 366 crore in Q3 FY23 to Rs 209.2 crore in Q3 FY24. Similarly, the company’s profit after tax (PAT) declined by 6.4% Y-o-Y to Rs 53.4 crore.

ZEEL acknowledged the challenges it faced during the quarter, including industry-wide headwinds impacting margins and increased competitive intensity resulting in higher content costs and acquisition expenses for third-party content rights. The company also highlighted the impact of the merger with Culver Max Entertainment Pvt Ltd, which was called off, leading to additional costs and distractions.

ZEEL expressed confidence in its ability to accelerate revenue growth once the advertising environment stabilizes. Despite a reduction in its all-India TV network share to 16.5% in Q3 FY24 from 17.9% in Q2 FY24, the broadcaster remains optimistic about its long-term prospects.