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Zee Telefilms’ net profit falls 21 pc in Q2; company demerger by January 2007

27-October-2006
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Zee Telefilms’ net profit falls 21 pc in Q2; company demerger by January 2007

Zee Telefilms Ltd on Thursday reported an overall net profit of Rs 33.3 crore in Q2 FY07, down 21.64 per cent as compared to Rs 42.5 crore in Q2 FY06. However, the media major’s consolidated revenue grew by 38.1 per cent to Rs 463.8 crore over the corresponding period in the previous fiscal.

The company incurred operating loss amounting to Rs 832 million, 17.9 per cent of consolidated revenues, due to new businesses – viz. Zee Telugu, Zee Smile, and Zee Sports, among others. Consolidated operating profits of continuing businesses were Rs 117.11 crore. These are higher by 28.4 per cent as compared to the corresponding quarter last year. Profit before tax for the second quarter of FY07 was Rs 40.9 crore.

Commenting on the second quarter results, Subhash Chandra, Chairman, Zee Telefilms, said, “Zee’s second quarter results prove the continued strength of our content business and a growing presence across new genres. Not only are we growing our content business, we have been very successful in integrating it with new platforms like DTH, with significant growth potential. The performance reflects our success in delivering superior content to viewers and stronger relationship with our consumers.”

“We are also happy about some recent developments relating to our business. There is continued monitoring of the High Court for implementation of CAS in the notified areas of Mumbai, Delhi and Kolkata by December 31, 2006. This will additionally help in bringing about addressability on cable. On DTH, Dishtv further enhanced its offering from August, when the STAR bouquet was also made available to subscribers and now Dishtv has the most comprehensive content on any pay television service, whether cable or satellite. All these have extremely positive and long term impact on our business,” Chandra added.

Commenting on the restructuring exercise, he said, “The restructuring exercise is underway and is expected to be completed by January 2007. There has been some delay from our earlier expectation of November 2006 purely due to a number of adjournments of court hearings. When completed, the restructuring would result in four listed companies ready to exploit the vast emerging opportunities in each line of business. The next several years would provide tremendous growth opportunities for all these four businesses.”

Punit Goenka, Whole Time Director, who is responsible for content creation, said, “Zee TV continued to increase its viewership share from 25 per cent in Q1 FY07 to 28 per cent during Q2, along with a significant growth in time spent. During the quarter, average GRPs of Zee TV remained at 240 levels, while recording peak GRPs of 270 in week 36. The growth momentum has been led by widespread success of ‘Sa Re Ga Ma Pa Little Champs’, ‘Saat Phere’ and ‘Kasamh Se’, while our new launches ‘Dulhan’ and ‘Betiyan’ have been very well received. ‘Betiyan’ touched a TVR of 5 in its first week. Zee TV now has five programmes in top 20 and 12 programmes in top 50. It has leadership in the 9:00 pm to 10:00 pm time band, and between 6:00 pm and 8:30 pm on weekdays.”

“Zee Cinema continues to be the No. 1 movie channel, and increasingly is becoming a reach channel for advertisers. Zee Marathi has improved its viewership by 16 per cent during Q2 FY07. Zee Bangla has improved its viewership by 60 per cent and has gained leadership position in the 8:30-9:30 pm time band. Zee Sports continues to build on the back of cricket Tri-Series in Malaysia between India, Australia and West Indies. We will continue to reinforce our competitive advantage and deliver more value to viewers and shareholders,” Goenka added.

Elaborating on Zee’s performance, Pradeep Guha, its CEO, said, “We are pleased with the strong operating results content business delivered in the second quarter. We once again outperformed the market with unmatched connection with our audience and remain focused on building on our progress. Looking ahead, we are confident that continued execution of our content strategy would result in a revenue growth faster than that of the industry.”

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