Zee Entertainment Enterprises Ltd Reports Consolidated Net Loss in Q4 2023
Zee Entertainment Enterprises Ltd (ZEEL) reported a consolidated net loss of Rs 196.03 crore for the fourth quarter ended March 31, 2023. This came as higher costs and exceptional items hurt its margins. The company posted a net profit of Rs 181.93 crore in the January-March quarter a year ago.
Exceptional Items Led to Net Loss
ZEEL stated that the exceptional items during the quarter ended March 31, 2023, equalled a net expense of Rs 378.3 crore. Some of the exceptional items included the closure of live events, expenses arising from restructuring, and repositioning of the business in some international markets. The higher expenses were compensated by a one-time gain related to the termination of certain content deals.
Revenue Increased, But Margins Shrunk
The company’s consolidated revenue from operations rose to Rs 2,232.72 crore in the March quarter, up 0.63% year-on-year. However, its operating margin for the quarter shrank to 22.3% from 28.2% in Q4 2022. This was largely due to higher employee costs, information technology expenses, marketing and distribution costs.
Advertising Revenue Grows Despite COVID-19 Crisis
Zee’s domestic advertising revenue for the quarter grew by 5% year-on-year to Rs 1,357 crore, owing to a favourable base quarter and the company’s robust programming portfolio. Advertising growth for the quarter was ahead of the 4% industry growth, as per industry reports. Despite the ongoing COVID-19 crisis, the company is hopeful of a gradual recovery in the advertising market as businesses resume operations.
Domestic Subscription Revenue Remains Flat
ZEEL’s domestic subscription revenue remained flat at Rs 829 crore in Q4 FY23 as it did in Q4 FY22. Despite a further drop in the Direct-to-Home (DTH) subscription revenues, the company’s overall subscription revenues remained flat. The company expects subscription revenues to recover as the economy improves.
International Revenue Declines
ZEEL’s international revenue declined by 7.3% year-on-year to Rs 359.7 crore in Q4 FY23. The decline is attributed to the continuing lockdowns and adverse economic impact in certain international markets.
Outlook for FY24
ZEEL has expressed optimism regarding the future as it begins focussing on growth opportunities after facing challenges in recent months. It has a strong content pipeline and expects gradual recovery in ad revenues. The company is also hopeful of the Indian economy regaining momentum, driven by various government initiatives.
The company has stated that it will continue to invest in content, catering to diverse audiences in India and other markets worldwide. ZEEL’s focus on expanding its digital presence through its ZEE5 platform has also helped in broadening its reach.
Amidst heightened competition from international streaming platforms, ZEEL is confident that its unique proposition to cater to the Indian diaspora across various markets will help it to grow its international business.
Conclusion
ZEEL reported a consolidated net loss for Q4 FY23 as exceptional items and higher costs impacted its margins. Despite this, the company expects to recover as the Indian economy and advertising market rebound. It plans to invest in content and expand its digital presence to cater to diverse audiences both in India and abroad. The company is also optimistic about its international business prospects given its unique proposition to cater to the Indian diaspora globally.
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