The Hindu Business Line : Zee Telefilms net profit dips 27 pc

Zee Telefilms Ltd (ZTL) in its consolidated earnings reported a 27 per cent fall in its net profit at Rs 67.5 crore for the March 2006 quarter from Rs 92.5 crore in the year-ago period.

Operating losses on new businesses drove profits down. Operating loss on new businesses stood at Rs 52.5 crore.

While initial investments have been made and expensed fully, the corresponding revenue build-up is to be realised in the next few quarters, ZTL said in a news release. In March quarter the company made investments amounting to Rs 52.5 crore in programming, marketing and distribution.

"The immediate impact is lowering of operating profits, which we hope to recover in successive quarters through increasing revenues and progressive reduction in costs,'' it said. Operating profit fell 38 per cent to Rs 76.1 crore. This quarter has seen investments amounting to Rs 52.5 crore in programming, marketing and distribution, which will yield benefit in the coming months, but have been expensed fully. The operating profit from continuing businesses was Rs 128.5 crore.

Revenues during the quarter grew 10.2 per cent to Rs 396.6 crore from Rs 360 crore in the year-ago period. This rise was contributed by a 12-per-cent increase in advertising revenue to Rs 196 crore and a 5.4-per-cent growth in subscription revenue at Rs 175.7 crore.

"We are pleased to report the continuing uptrend in advertising revenues and the strong recovery in our market position. You are aware of the hike in advertisement rates announced by Zee Network, which we are confident would start reflecting in FY2007 revenues,'' ZTL said quoting its Chairman, Mr Subhash Chandra.

ZTL as a standalone entity posted a net loss of Rs 13.25 crore for the fourth quarter of 2005-06 against a net profit of Rs 37.04 crore in the year-ago period.

Zee TV has increased its viewership share from 16 per cent to 22 per cent while general entertainment as a genre has posted a 5 per cent decline in time spent.

ZTL's board also approved the demerger of the direct consumer services business undertaking into ASC Enterprises. ASC would allot 23 fully paid-up equity shares for every 10 shares in ZTL.

Shares of ZTL gained Rs 5.15 to Rs 246.65 in Thursday's trade on the BSE.

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