ZEEL reports 70% profit increase in Q2 FY25

Zee Entertainment Enterprises (ZEE) announced on Friday a remarkable 70% year-on-year increase in its consolidated net profit, totalling Rs 209 crore for the quarter ending September 2024, up from Rs 123 crore in the same quarter last year.

Despite this impressive profit growth, the company faced a 19% decline in total revenue, which reached Rs 2,034 crore during the reporting period, down from Rs 2,516 crore in Q2 FY24. The contrasting trends in profit and revenue highlight the complexities of the current media landscape and the challenges ZEE must address to adapt and thrive in an evolving market.

The company's advertising revenue fell by 8% from Rs 979.2 crore in Q2 FY24 to Rs 901.7 crore in Q2 FY25. On a more positive note, subscription revenue increased by 9% to Rs 970 crore this quarter, compared to Rs 888 crore in the same period last fiscal year. However, income from other sales and services experienced a sharp decline of 77%, dropping from Rs 570.8 crore in Q2 FY24 to just Rs 129.1 crore in Q2 FY25.

In terms of expenses, ZEE managed to reduce its total costs by 20%, decreasing from Rs 2,205 crore in Q2 FY24 to Rs 1,759 crore in Q2 FY25. Advertising expenses decreased slightly by 5% from Rs 273 crore to Rs 259.3 crore. Depreciation and amortization costs fell by 5% from Rs 77.2 crore to Rs 73.2 crore, while finance costs saw a significant reduction of 65%, dropping from Rs 23.4 crore to Rs 8.3 crore.

Employee benefit expenses also declined by 13% this fiscal year, totaling Rs 227.5 crore compared to Rs 260 crore in Q2 FY24. Additionally, the company’s operational costs decreased by 25%, from Rs 1,425 crore to Rs 1,061.5 crore in Q2 FY25, further demonstrating its efforts to streamline operations in the face of challenging market conditions.

With respect to the merger with Sony Pictures Networks India (NOW Culver Max Entertainment Pvt Ltd and, Zee said that the Company has entered into a non-cash settlement agreement with CMEPL and BEPL inter alia for settling all disputes related to the MCA and the Composite Scheme of Arrangement including withdrawal of all application(s),claim(s) and/or counterclaim(s) before the SIAC and relinquish all rights to file claim(s) and/or counterclaim(s) against each other including for USD 90 million termination fee and other costs.

“Accordingly, the Scheme cannot be made effective in terms thereof,” it said.

Under the terms of the settlement, none of the parties will have any claims or continuing obligations or liabilities to each other, ZEEL told BSE.

Zee said that it has also obtained approval from the NCLT vide order dated 5 September 2024 effecting recall of the order dated 10 August 2023.

Further, The Company, CMEPL and BEPL have on 30 August 2024 withdrawn its application and its rights to file claim(s) and/or counterclaim(s) before SIAC and the arbitration proceedings is terminated.

The company reported that as part of its restructuring, it incurred employee termination and related expenses of Rs 111 million for the quarter and Rs 397 million for the half-year ended September 30, 2024. Additionally, Rs 220 million for the year ended March 31, 2024, has also been recorded as an exceptional item.

It said that it has been working on liquidating, discontinuing, or selling Margo Networks Private Limited (Margo). For the year ending March 31, 2024, it estimated closure costs of Rs 324 million, which the Board approved, along with an impairment charge of Rs 21 million, both recorded as exceptional items.

In the quarter ending June 30, 2024, the Board approved additional closure costs of Rs 75 million, also classified as exceptional items.

On July 31, 2024, the Board approved the acquisition of the remaining 10,000 equity shares (a 20% stake) in Margo for Rs 0.1 million, making Margo a wholly owned subsidiary.

“During the quarter and six months ended 30 September 2024, the management has revised the classification with respect to the recoverable amount of Rs. 809 million under arbitration between Margo and its network partner and given that Margo, based on legal opinion has a strong case and that it does not propose to sell its rights under arbitration, the same has been reclassified from held for sale to the relevant heads in the accompanying statement,” it said.