PRESS RELEASE
ZEE TELEFILMS LIMITED
Financial Performance – For the Quarter ended September 30, 2002
Mumbai, India – October 29, 2002
For the quarter ending September 30 2002, Zee Telefilms Limited
(consolidated) has registered a 10.8% growth in revenue and a 4.7%
growth in Operating Profit. While PAT has shown a marginal growth
for the quarter, it has registered growth of 14% for the half year
ended September 30, 2002.
These numbers are after consolidating the financials of ETC Networks
Limited during the current quarter.
ZEE TELEFILMS LTD
–
Consolidated (quarter ended September 30, 2002)The Board of Directors in its meeting held today, has taken on record the unaudited consolidated financial results of Zee Telefilms Limited and its subsidiaries.
CONSOLIDATED RESULTS
1)
Growth in revenues
During the second quarter ended September 30 2002, Zee achieved
consolidated revenues of Rs. 274.6 crores, recording an increase of 10.8%
over revenues of the corresponding period last year. During the quarter, the
Quarter ended September 30, 2002 2001
Total Revenue 274.6 247.9
Operating Profit 80.4 76.7
PAT 54.6 53.3
advertising revenues of Zee Network stood at Rs. 131.4 crores which shows a small decline of 6.6%. This was due to the continued sluggishness witnessed in the market and also a result of tighter credit norms imposed by Zee to strengthen its receivables position. After consolidation with ETC Networks Limited (ETC) the advertising revenues are up 1.2% to Rs 142.3 crores.
Overall subscription revenues, including domestic and international businesses, registered an increase of more than 55.3% to Rs. 121.1 crores during this quarter, over the corresponding period last year. This reflects a very successful drive to diversify our revenue base, while expanding our reach.
2)
Continued growth in domestic pay revenues
The Company continued to record significant growth in the domestic pay
market and has recorded revenues of Rs. 36.9 crores during this quarter, a 21.3% growth over the first quarter of this year. Zee Turner presently
distributes all channels of Zee and 3 channels of Turner in its pay bouquet. ETC Music and ETC Punjabi are expected to join this bouquet in the near future with an upward implication for revenue..
3)
Growth in operating profit
Despite an accelerated amortisation of deferred revenue expenditure, the operating profit of the company increased by 4.7% to Rs. 80.4 crores as against Rs 76.7 crores recorded in the corresponding period last year. Although the finance cost was higher during the quarter, Profit before Tax
grew 5.7% to Rs 72.1 crores.
4) After providing for tax of Rs 17.50 crores, the company earned a Profit after
Tax of Rs 54.6 crores during the quarter which is 2.4% higher than the
corresponding period last year.
no likelihood of write-offs beyond the normal 1 to 2% on these receivables and efforts continue to further bring down the receivables position to normal levels at the earliest.
B) CONTENT
As announced earlier, Zee commenced its program of showcasing new movies every week on prime time television, under “Thursday Premiere”. As part of this initiative, latest Hindi movies are being shown every Thursday at 8:00 p.m. This initiative would be a sustained one with more movies being added on an ongoing basis.
The first two weeks of “Thursday Premiere” have generated very good response on Zee TV channel and it has already established itself as the number 2 channel ahead of Sony. On weekly viewership, Zee is higher than Sony by almost 25% across all target groups. The viewership has increased by 140% during October 10th and by 270% during October 17th, compared to our normal Thursday viewership. This has helped us attract many new viewers and we hope to build on this early success in several ways.
In the other new initiative announced earlier, Zee has begun consolidating its viewership by introducing Sunday prime time programming. We have also taken significant new initiatives in recent months to strengthen our programming and the results are very encouraging. The recent introductions ‘Kittie Party’, ‘Lipstick’ and ‘Aati Rahengi Baharein’ have drawn good reviews and are steadily climbing in popularity. Certain other programmes not doing well are being replaced with innovative programmes of high viewer appeal.
Zee Cinema continues to maintain leadership in the movie segment. Zee News
has rapidly consolidated its position to hold the number one slot in many markets and an overall number two slot on an all India basis.
Alpha Channels continue to strengthen their respective positions in each of their
Alpha channels also strengthen our community connect with increased number of live news bulletins and news-on-the-hour.
International operations have registered a healthy growth of 41% in revenues
during the second quarter of FY2003 as compared to the corresponding period last year. Operating profit during the same period has recorded a growth of 180%. ETC Alpha Punjabi channel has been on air in the UK market since end June, capitalizing on the strength of live Gurbani feed from Golden temple and has recorded good subscription revenues.
C) ACCESS
The domestic pay revenues of the Company have increased to Rs. 36.9 crores during the quarter ending September 30 2002, representing a growth of 21.3% over the first quarter of FY2003.
The connectivity of the pay bouquet has been around 4.4 million homes.
D) ETC NETWORKS LIMITED
Pursuant to the acquisition of controlling stake in ETC Networks Limited (ETC), the Board of Directors of ETC has been reconstituted with Mr. Subhash Chandra assuming the Chairmanship of ETC and Mr. Rajiv Garg appointed as Managing Director. There has also been a management reorganization leading to substantial reduction in personnel and administrative costs, which would reflect in the balance of the year. Also, during the quarter, the Company has consolidated the financials of ETC with Zee.
E) CHANGES IN TOP MANAGEMENT
OUTLOOK
Although advertising spends continue to remain lackluster, Zee strategic programming initiatives are expected to help it maintain or improve its share of advertising revenues. However, subscription revenues from the domestic as well as the international markets continue to grow at a healthy rate, which will provide an increasing broad basing of revenue stream in the days ahead.
As reported earlier, a process of organizational rejuvenation is on within the Company. We have undertaken an internal organizational restructuring for better tuning of organizational resources to the planned business & revenue mix, which will positively reflect through improved efficiency and delivery. I will personally provide leadership, support and guidance to the Core Team at Zee and to the new strategic direction.
We continue to face an extremely challenging environment but are reasonably confident of our ability to deliver value from our multi-pillar business model, which we feel is best suited in the diversified Indian environment.
Sd/-
SUBHASH CHANDRA
