Zee Entertainment Enterprise Ltd on Thursday reported a consolidated net profit of Rs 272.36 crore in Q4 as against a loss of Rs 765.82 crore in the same quarter last year. The profit was on the back of strong ad revenues for the quarter under review.

In an interview with CNBC-TV18, Rohit Gupta, CFO, of the company said that although the company saw double digit growth in ad revenues in Q4FY21, they will be impacted in Q1FY22 due to second wave of COVID and the consequent lockdowns. HE added that if lockdowns are restricted to the first quarter, the impact will be less.

“Due to increase in COVID cases and consequent lockdown across the country, advertisers have started pulling back spends. At present looks like Q1FY22 would be impacted, but it will not be as impacted as it was in Q1FY21 where we had seen revenue falling by two thirds. We are optimistic that a good start of this loss would be offset if lockdowns do not extend beyond Q1FY22,” he said in an interview to CNBC-TV18.

Meanwhile, the broadcast subscription revenue remained flat in Q4FY21 for the company. However, Gupta said that as there is a freeze on pricing of channels the company would not be able to substantially grow subscription revenues for the broadcast business.

The firm is also expecting to see a drop in margins from the historical levels of 30 percent. “We would be increasing our investments across our businesses and as we do increase our investments, we would see a transient dip in EBITDA margins. We have done a 5-year plan and we believe we will see a drop in margin for around 2 years. During this phase the margin would be around 25 percent plus and once this phase is over, we would be back to margins of 30 percent plus,” he said.

He also said that the reduction in Zee5's annual fee will have some impact on revenue in near term. However, he expects that it will help in getting more B2C customers.

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(Edited by : Pranati Deva)