Mumbai: Zee Entertainment has reported a huge 97 percent decline in year-on-year (YoY) profit after tax (PAT) to Rs 3.9 crore for the first quarter of the fiscal year 2024, citing a weak advertising environment as the primary reason.
In Q1 FY23, the company had recorded a PAT of Rs 130.1 crore.
The company's domestic advertising revenue also saw a YoY decrease of 2.6 percent, amounting to Rs 901.8 crore.
This result was more favourable than anticipated, as predictions foresaw a 7 percent decline in ad revenues YoY. The subdued advertising climate was attributed to a soft start in the June quarter, coinciding with the Indian Premier League (IPL) occurring in the first two months.
However, positive signs emerged towards the end of the quarter, driven by increased ad spends from the fast-moving consumer goods (FMCG) sector.
Zee's subscription revenues exhibited growth, rising by 18 percent to Rs 907.5 crore in Q1 FY24 compared to Rs 771.7 crore in Q1 FY23.
This exceeded analyst estimates, which had predicted a 2-3 percent YoY increase in subscription revenues.
The rise in subscription revenue was attributed to price hikes resulting from New Tariff Order (NTO) 3.0 and the contributions of ZEE5, the company's streaming platform.
Despite these revenue dynamics, Zee also noted certain cost increases.
Programming and technology expenses escalated due to higher content costs in movies, including theatrical releases, and investments in ZEE5.
Marketing expenses rose due to increased spending on new shows, movies, and theatrical releases.
ZEE5, the streaming platform, experienced a 21 percent growth in revenue, reaching Rs 193.9 crore in the June quarter, up from Rs 159.7 crore in the same period of FY23.
ZEE5 launched 32 shows and movies during the quarter, including five originals. Zee Studios, the company's production arm, released three Hindi and four other language movies in Q1 FY24.
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