Zee Entertainment once again reported weak operating performance in its last quarter. The fourth quarter of FY23 witnessed revenues fall of 9 percent to Rs 2,112 crore on a year on year basis. This includes 10 percent advertising revenues fall, flat subscription revenues and 26 percent decline in income from other sales & services.

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The domestic advertising revenues stood at Rs 964 crore, down 5 percent quarter on quarter and 10 percent year on year, impacted due to free to air channels withdrawal (Zee Anmol) and slowdown in advertising spending environment. Income from other sales and services declined 25 year on year and improved 71 percent sequentially, aided by new launches and higher syndication revenue. However, theatrical performance continues to be soft year on year.

New content launches on Digital has increased the marketing costs on a year on year basis as well as sequentially. The earnings before interest, tax, depreciation and amortisation declined 69 percent year on year to Rs 152 crore compared with the CNBC-TV18 poll of Rs 192 crore. EBITDA margins have collapsed to single digits. The fourth quarter clocked 7.2 percent EBITDA margins compared with 21 percent in same quarter of last year.

With higher depreciation and lower other income, the fourth quarter reported Rs 73 crore net loss from continuing operations, compared with a net profit of Rs 244 crore in the corresponding quarter of last year. Also, an exceptional item of Rs 90 crore was reported in the fourth quarter.

The management attributes the weak performance to soft advertising environment, negligible subscription growth and high investments in its OTT platform, Zee5. On the positive side, Zee's all India TV network share improved 40 bps quarter on quarter to 16.6 percent, highest in past four quarters.

For Zee5, global monthly average users increased by 9 mn year on year to 113.8 mn. The OTT platform's revenues at Rs 220 crore is 36 percent higher in fourth quarter, but losses widened to Rs 310 crore. This signifies that while the revenues for Zee5 are increasing, costs are rising much faster. However, Punit Goenka, CEO at Zee Entertainment in its investor conference call said the losses in Zee5 will start moderating henceforth.