Media company Zee Entertainment reported a 97 percent drop in profit after tax (PAT) year-on-year (YoY) at Rs 3.9 crore for the June quarter of the financial year 2024 due to a weak ad environment.
The company had reported 130.1 crore PAT in Q1 FY23. Analysts had expected profit to fall 80-90 percent.
The company reported domestic advertising revenue of Rs 901.8 crore, down 2.6 percent year-on-year (YoY). The company was estimated to see a 7 percent drop in ad revenues YoY.
Ad spending environment was muted as June quarter started off on a soft note, with Indian Premier League (IPL) scheduled during the first two months of the quarter. Green shoots emerged towards the quarter end, with early signs of ad spends starting to pick up, led by FMCG, the company said in its earnings presentation.
Shares of Zee traded higher 1.64 percent at Rs 242.25 on National Stock Exchange (NSE) at 15:59.
Zee reported network share of 17 percent in the June quarter in FY24 as against 17.9 percent in the year ago period.
Subscription revenues were up 18 percent to Rs 907.5 crore in Q1 FY24 versus Rs 771.7 crore in Q1 FY23. The company surpassed analyst expectations who had estimated 2-3 percent growth in subscription revenues YoY. However, the company said that pickup in subscription revenues was offset by muted ad environment. Subscription revenue picked up due to price hike because of New Tariff Order (NTO) 3.0 and ZEE5, the streaming arm of the company.
Programming and technology cost increased YoY due to higher content cost in movies including theatrical releases and investment in ZEE5. Also, marketing cost increased YoY driven by increase in spend on new shows, movies and theatrical releases.
Zee5’s revenue increased 21 percent at Rs 193.9 crore in June quarter versus 159.7 crore during the same period in FY23. The platform launched 32 shows and movies including five originals that were released during the quarter.
Company’s production arm, Zee Studios released three Hindi and four other language movies during Q1 FY24.