Zee Entertainment's ad revenue witnessed a de-growth in the third quarter of FY20 as the consumer sector remained weak, said Rohit Gupta, CFO of the company. Gupta, however, added that ad revenue should be back in the next two to three quarters as there were already some signs of revival.
The company reported a 38 percent on year fall in its consolidated net profit for the third quarter of fiscal 2020 at Rs 348.60 crore.
Total income fell to Rs 2,119.60 crore during December quarter as against Rs 2,252.75 crore in the corresponding quarter last year dragged by a decline in advertising revenue.
ZEEL's advertisement revenue during the third quarter declined to Rs 1,230.82 crore from Rs 1,426.57 crore a year ago.
Gupta, however, said Zee continues to perform well and "this quarter also our subscription revenue has remained buoyant". "We have grown by about 21.7 percent in the domestic side and for the 9 months, we have grown by about 31 percent."
Talking about fall in ad revenue, Gupta said, “We have seen weakness in consumer sectors and that has resulted in de-growth in our ad revenue. However, this quarter and this year is an exception because our last 5 years trend... our ad revenue has a CAGR of roughly around 16 percent and our topline has grown by about 12 percent and we have actually doubled our EBITDA in the same period."
Talking about subscription revenue, he said, “After the implementation of the new tariff order... we have grown stronger and the reason for that has been a very strong customer connect and also brand poll of our channels. So, that has helped us in the overall growth in our subscription revenue.”
On cash flow front, the CFO said, “We have been working on improving our balance sheet and I am happy to say that our cash and cash equivalent has improved from Rs 1,479 crore to Rs 1,767 crore this quarter. We have been working on improving our both free cash flow and PAT to cash conversion ratio. We expect that in the coming year, we will improve both our free cash flow and PAT to cash conversion ratio in access of about 50 percent.”