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Tag: ZNL

  • ‘We are open to a foreign equity partner for the English channels’ : Laxmi Narain Goel – Zee News Ltd MD

    ‘We are open to a foreign equity partner for the English channels’ : Laxmi Narain Goel – Zee News Ltd MD

     Zee News Ltd (ZNL) plans to invest Rs 5 billion in a slew of channels over two years, expanding its presence in regional markets and new segments.

    Immediately on the agenda is the launch of a Tamil general entertainment and a Telugu news channel. Plans are also afoot to launch an English business and a global news channel.

    The company is also bringing to its bouquet mix a clutch of regional movie channels. It will soon apply for a Bengali movie channel while Zee Talkies is being transferred from sister company Zee Entertainment Enterprises Ltd.

    In an interview with Sibabrata Das, Zee News Ltd managing director Laxmi Narain Goel chalks out the company’s growth roadmap.

    Excerpts:

    When Zee News Ltd was spun into a separate entity a few years back, it was making a loss due to the Telugu channel. How did things turn around?
    The losses from the new businesses have substantially reduced. Zee Telugu, in fact, should break even in the third quarter of this fiscal and Zee Kannada in the subsequent quarter. Our turnover has also gone up from Rs 2 billion to Rs 3.58 billion (standalone) for the fiscal ended 31 March 2008, with Zee Marathi and Zee Bangla seeing exponential growth in the last one year.

    Is the company still taking a cautious approach and waiting for some recent channels to break even before launching new ones?
    We are launching a Tamil general entertainment channel (GEC) with an investment plan of Rs 900 million in September as the Telugu and Kannada channels are close to earning profits. The Telugu news channel will launch in October while the Malayalam GEC should make its appearance in the next fiscal.

    ZNL is also planning to launch an English business and a global news channel. Do you see this the right stage for the company to leap into such high-cost investments?
    We plan to invest Rs 5 billion by FY’10 which will include the launch of several channels. Our intention is to have a complete presence in all the segments.

    The company is on a high growth curve and expects to clock Rs 3.55 billion in advertising revenues for FY’09, a 25 per cent jump over the prior year. Subscription revenues are expected to grow even faster, soaring to Rs 1.19 billion (from Rs 667.5 million in FY’08). The Telugu and Kannada channels have started generating pay revenues from the last quarter of FY’08 and would only add to this growth.

    Will you be inducting a foreign equity partner for the English channels?
    We are open to bringing in an equity partner. But all will depend on what proposals we receive from whom and what model is on offer.

    ZNL so far has been a mix of news channels and regional language GECs. Will we also see regional movie channels forming the bouquet?
    We will soon be applying to the information and broadcasting ministry for clearance to operate a Bengali movie channel. We are also transferring Marathi movie channel Zee Talkies from Zee Entertainment Enterprises Ltd (Zeel) to Zee News Ltd. The broad plan is to bring regional movie channels under the company. This will give us a unique mix and add to the growth of the company.
    ‘We plan to invest Rs 5 billion. Our intention is to have a complete presence in all the segments‘

    Zee News has also started a franchising model to enter into new markets. Will you restrict this to smaller markets where it doesn’t make commercial sense for you to enter directly?
    The first such channel will roll out in Chattisgarh with SB Multimedia as our local partner. We will be leveraging our brand while the local partner will make the investments. We hope to strike such deals with other players in these smaller markets. Once we have a cluster of such channels, we can sell as a package to advertisers and command better rates. Significant revenues can then flow in from the franchising model. It can turn out to be a successful business model.

    What made Zee change the positioning of its flagship Hindi news channel?
    We have relaunched as a serious news channel and see it as a differentiator in a segment that is witnessing lots of competition. We have decided not to go the tabloid or sensationalism way. This is not the first time that we are changing our positioning. But our motto continues to be the same: We will show what interests the masses and is in the interests of the nation.

    When you dramatised the ‘Gudiya’ story, was this to do more with ratings than anything else?
    We saw the story as having a genuine mass interest among our audiences. It was a national interest story.

    Isn’t it time for the Hindi business news channel to get a makeover?
    We will be relaunching Zee Business and making it more market-oriented. But we will not just be a stock market channel; we will address all kinds of markets and segments.

    Do you see the surge in personnel and distribution costs upsetting the profitability of the TV news business?
    There is a lot of new manpower and talent available in the market today. The supply can only increase. I believe that manpower costs as a share to revenues will not go up, but indeed fall.

    As far as distribution expense is concerned, the industry will take 3-4 years to settle down. But with DTH (direct-to-home), HITS (Headend-In-The-Sky) and new platforms emerging, we could see carriage costs peaking once the digital systems take off in a big way.

    Zee is continuing to bleed in the Gujarat market. Are there plans to address this by launching a Gujarati news channel to support the GEC?
    Zee Gujarati is making a small loss. The local viewers watch a lot of Hindi entertainment content. But we have no plans to launch a Gujarati news channel.

    Why is the ZNL scrip lowly priced in the market?
    Zee News Ltd is a terribly undervalued stock. It is a profitable company in the news business, has leading regional GECs, and will continue to post strong subscription growth. The market should adequately react to this.

  • Zee News Q2 net profit up 97% at Rs 57 million

    MUMBAI: Zee News Limited (ZNL) has posted a standalone net profit of Rs 57 million for the quarter ended 30 September 2007, up 97 per cent as against Rs 29 million in the corresponding quarter last fiscal.

    Operating revenue at Rs 776 million represented a 44 per cent jump over the year-ago period. Operating profit was at Rs 105 million, up from Rs 18 million.

    ZNL’s advertisement revenue was Rs 608 million for the quarter, up 57 per cent on a like-to-like basis compared to Q2 FY07. Subscription revenue stood at Rs 150 million, up nine per cent.

    Said ZNL chairman Subhash Chandra, “Zee News Limited has strengthened its position in the marketplace during Q2 FY08. Advertising revenues have grown by 57 per cent while subscription revenue improved by 9 per cent during the quarter. While ‘Zee Marathi’ and ‘Zee Bangla’ are steadily climbing the rating chart, the other existing businesses of Zee News Limited have also shown consistent growth momentum. The trends in the new businesses are encouraging with Zee Telugu and Zee Kannada improving their performance despite hyper competitive business environment. This nurtures our hope for a better future. Zee News Limited is moving well on its journey to gain envious position in the news and regional entertainment genres.”

    ZNL MD Laxmi Narain Goel said, “Zee Marathi and Zee Bangla have given sterling performance during the quarter. Zee Marathi has maintained its Numero Uno position in the Marathi genre holding a vice-like grip on the number 1 position, while 24 Ghanta has also delivered a huge GRP increase and leading in Bangla news genre in Q2 FY08. Zee News maintained its ratings in the face of multiplying stiff competition in the Hindi News genre while achieving strong revenue growths. We have met the bottom line target during the 2nd quarter and this fortifies our belief that good people skill, sensitivity to changing needs of viewers, agile strategies, new offerings in content should stand us in good stead for a better future.”

    Goel added, “The existing businesses have shown consistency in performance and revenues of existing businesses have grown by 42 per cent, the new businesses have also performed well in revenues and registered a growth of 80 per cent during the second quarter. We are also pleased to report that the operating margins on our existing businesses increased from 30 per cent during Q2 FY07 to 33 per cent during Q2 FY08.”

  • Zee Entertainment Q3 net up 179 per cent at Rs 958 million

    Zee Entertainment Q3 net up 179 per cent at Rs 958 million

    MUMBAI: Having gained market share in the TV ratings game, Zee Entertainment Enterprises Ltd. (ZEEL) is seeing a surge in earnings with third-quarter consolidated revenues growing 53 per cent to touch Rs 4.18 billion.

    Net profit also saw robust growth for the fiscal third quarter ended 31 December, jumping 179 per cent to Rs 958 million.

    The consolidated operating profit stood at Rs 1.36 billion, after expensing of initial investments in new activities (Zee Sports, Arabia) amounting to Rs 232 million. These are higher by 187 per cent as compared to the year-ago period.

    The results include the financials of Taj TV Ltd (Ten Sports) with effect from 13 November, ETC, international and educational businesses of Zee.

    Zee will separately announce the results of its other demerged entities – Zee News Ltd (ZNL), Wire & Wireless India Ltd (WWIL) and Dish TV. While ZNL and WWIL are already listed, Dish TV is likely to be listed by February.

    Fuelling ZEEL’s third-quarter growth has been a 59 per cent rise in advertising revenues to Rs 2.1 billion, benefitting largely from Zee TV’s prime time ratings gain and higher average rates on most of the network channels.

    “Zee Entertainment finished the third quarter with outstanding performance, highlighted by strong advertising revenue growth of 59 per cent, extremely robust operating profit growth of 187 per cent and 179 per cent growth in net earnings. Our television broadcasting business continues to lead industry in converting rating success into strong growth in revenues and operating profits. The performance reflects our success in delivering superior content to viewers and stronger relationship with our consumers,” says Zee chairman Subhash Chandra.

    Adds Zee wholetime director Punit Goenka, “Zee TV continued to increase its viewership share from 28 per cent in 2Q FY2007 to 29 per cent during 3Q FY2007, along with growth in time spent. During the quarter, average gross ratings points (GRPs) of Zee TV grew to 250 levels, with gains coming mainly from prime time. The growth has been led by continued success of ‘ Sa Re Ga Ma Pa’ , Saat Phere’ and ‘ Kasamh Se’, while our new launches ‘ Dulhan’ and ‘Betiyan’ have helped bolster the prime time shares. Zee TV now has five programmes in top 20 and 11 programmes in top 50.”

    Zee also saw gains in the other channels. “Zee Cinema continues to be the No. 1 movie channel, and increasingly is becoming a reach channel for the advertisers. Zee Café and Zee Studio have gained shares. We will continue to reinforce our competitive advantage and deliver more value to viewers and shareholders,” says Goenka.

    Contributing to the strong third-quarter performance was a 55 per cent surge in subscription revenues at Rs 1.96 billion. This was bolstered by new revenue streams coming from direct-to-home (DTH) services and digital cable. Other sales and services was Rs 116 million.

    “We are extremely pleased to see the steady steps towards digitization of the Indian cable and satellite industry. Conditional access system (Cas) has been successfully implemented in the notified areas of Mumbai, Delhi and Kolkata. With more subscribers opting for digital services even in other parts of the country, it will give a big boost to our subscription revenues in the near future. Our investment in Ten Sports is doing well. All these have extremely positive and long term impact on our business,” says Chandra.

    Elaborating on the performance, ZEEL CEO Pradeep Guha says, “We are pleased with the strong operating results in the third quarter. We have outperformed the market locking in higher advertising rates which would continue to help us in the future. Looking ahead, we are confident that continued execution of our content strategy would result in a revenue growth faster than that of industry. Additionally, with digitization of Indian cable and satellite industry, we expect to reap a rich harvest from subscription based revenues.”

    Sports business adds Rs 610 million to kitty

    The sports business revenue during the third quarter was Rs 610 million, after consolidating the results of Taj TV from 13 November 2006. EBITDA from Sports business during this quarter was Rs 133 million.

    “The main event for Ten Sports during the quarter was the Pakistan-West Indies series, which helped it garner significant revenues from the Pakistan and the Middle East beams. This was in addition to its other lead programs such as WWE, UEFA and Champions League. Ten Sports has also begun the telecast of the South Africa-Pakistan series on its Pakistan beam,” Zee says in a statement.

    “Zee Sports continued to grow on the Indian football opportunities; it covered the Asian Football Confederation under 20 championships in Kolkata in November and the Federation Cup in December. India is fast becoming a focus area for the world football governing body FIFA as well. Among some of the other events that Zee Sports covered was the Delhi Marathon, WTA tennis and the Italian Serie A. Zee Sports also bagged a three-year deal for the UEFA Cup,” the release adds.

    On a standalone basis, ZEEL posted a net profit of Rs 793.70 million for the quarter ended 31 December 2006 from Rs 341.60 a year earlier. Total income stood at Rs 2.46 billion as against Rs 2.4 billion during the same period.

    Condensed statement of operations

    The table below presents the condensed statement of operations for ZEEL and its subsidiaries for the third quarter of FY2007 versus FY2006, as published. The FY2006 numbers also include the cable, news and direct consumer business undertakings, which have now been demerged. Hence the numbers are not comparable.

    Comparable figures with FY06

    For better understanding of performance of ZEEL, the table below presents the proforma FY2006 numbers of ZEEL, on a comparable basis. These numbers are illustrative of the performance on a like to like basis.

    Segment-wise revenue streams

    The following table sets forth the percentage of revenues that each type contribute to consolidated revenues for the third quarter of 2007 and 2006.

    Comparable figures with FY06

    For better understanding of performance of ZEEL, the table below presents the proforma FY2006 numbers of ZEEL, on a comparable basis.

    Expenses account

    The following table sets forth the percentage of costs that each type contributes to consolidated expenses for the third quarter of 2007 and 2006.

    FY06 Expense chart

    For better understanding of performance of ZEEL, the table below presents the proforma FY2006 numbers of ZEEL, on a comparable basis. These numbers are illustrative.

    Segment-wise performance

    ZEEL is a diversified entertainment company with a multi-pillar approach to business. Its operations lie in three segments: (i) Content and broadcasting, (ii) Film Production and distribution and (iii) Education.

    The table below presents Zee’s third quarter performance for FY2007 in the key segments.

  • Zee demerger scheme for Dish TV gets nod

    Zee demerger scheme for Dish TV gets nod

    MUMBAI: Subhash Chandra is all set to list the direct-to-home (DTH) business of Zee Group after having got the demerger scheme approval from the court. Already listed are the other entities – Zee Entertainment Enterprises Ltd (ZEEL), Wire & Wireless India Ltd (WWIL) and Zee News Ltd (ZNL).

    Zee Entertainment Enterprises Limited today announced the approval of its demerger scheme by the Hon’ble High Court of Judicature of Bombay. “This approval paves the way for setting the record date for the demerger of the direct consumer business undertaking of Zee into ASC Enterprises Limited (ASCEL), which is soon to be renamed to Dish TV India Limited,” the company said in a release. Dish has 1.6 million DTH subscribers.

    Says Zee Chairman Chandra, “This is the last phase of our current restructuring process – WWIL and ZNL are already independent companies listed on the stock exchanges in India. Dish TV would also get listed very soon and we are confident that all four companies will deliver long-term shareholder value.”

    The record date is likely to fall in the latter half of February. The shareholders of ZEEL as on the record date shall be allotted 57.50 shares in ASCEL for every 100 shares held.

    “Dish TV would then apply for listing of such shares to the BSE, NSE and CSE, in compliance with SEBI guidelines. ZEEL expects the listing process to be completed by February,” the release said.

  • Zee Telefilms to launch Marathi news channel ’24 Tas’

    Zee Telefilms to launch Marathi news channel ’24 Tas’

    MUMBAI: Zee Telefilms Ltd. chairman Subhash Chandra is giving his news business a big push. His latest plan of action: to launch a Marathi news channel by the end of this year.

    Zee News Ltd (ZNL), the company which houses the news and regional channels, plans to invest Rs 1 billion over three years for this venture. 24 Tas (24 hours), as such, will become the first channel in the Marathi news space.

    “We plan to launch the Marathi news channel by December-end. Our projected investment for this is Rs 1 billion over a three-year period. We are putting the equipment in place,” says Zee News Ltd. director Laxmi Goel.

    More local language news channels are on the agenda. Goel had earlier told Indiantelevision.com that the company would launch news channels in the southern languages. Zee already runs a Bengali news channel through a joint venture with Akash Bangla.

    ZNL, will also be appointing a chief executive officer soon, said Goel. The company is also planning to launch a Tamil and a Malayalam channel to cover up all the southern language states.

    The company expects to post a 33 per cent compound annual growth rate (CAGR) over the next five years to touch revenue of Rs 8.7 billion by FY 2011, up from Rs 2.01 billion in FY 2005-06. ZNL’s operating margins, which stood at 16 per cent, are expected to expand to around 30 per cent during this period.

    ZNL has a networth of Rs 1.7 billion. The capital employed (as of 1 April 2006) is Rs 2.31 billion with loan funds standing at Rs 612 million.

    Chandra’s expansive news plans include the recent acquisition of a majority stake in United News of India (UNI), a news wire agency, which will give him access to a widely spread out infrastructure.

  • Chandra’s foreign holdings to be transferred to Indian investment company

    Chandra’s foreign holdings to be transferred to Indian investment company

    MUMBAI: Zee Telefilms Ltd. (ZTL) chairman Subhash Chandra will be transferring his foreign holdings to an investment company in India. Under ZTL’s demerged restructuring into separate entities, this is seen as a move to comply with the uplinking regulations on foreign holdings in news channels which are capped at 26 per cent.

    The total foreign shareholding in Zee Telefilms is 54.69 per cent. While the holding of foreign promoters is 22.77 per cent, foreign institutional investors (FIIs) have 31.51 per cent.

    As part of the corporate restructuring, ZTL is spinning off its news and regional channels into Zee News Ltd (ZNL). According to the formula that has been worked out, 137 ZNL shares will fetch 100 shares in ZTL.

    “Chandra will be transferring his foreign holdings to an Indian registered investment company. This will help Zee comply with the uplinking guidelines for the news business,” says Essel Group chief executive officer of corporate strategy and finance Rajiv Garg.

    The shares to be issued to FIIs in ZNL will have to fall within the 26 per cent cap. Foreign shareholders will, thus, be given preference shares of equivalent value to bring it under limit. Along with this, the promoters’ foreign holding will be transferred to an investment vehicle in India.

    The foreign holding of promoters is primarily through Delgrada Ltd. which has 19.98 per cent stake in Zee Telefilms. Delgrada is an overseas corporate body (OCB) owned by Chandra. The balance 2.79 per cent is held by Lazarus Investments Ltd.

    In the fiscal ended 31 March 2006, Zee posted a turnover of Rs 2 billion from its news and regional channels line of business and a net profit of Rs 161 million. “Zee News Ltd targets a turnover of Rs 2.5 billion in FY07 and Rs 2.9 in FY08,” says Garg.