India’s Zee Entertainment posts its first loss in 3 years due to weak advertising demand and higher costs
BENGALURU, May 25 (Reuters) – India’s Zee Entertainment Enterprises (ZEE.NS) reported its first quarterly loss in three years on Thursday as advertisers tightened marketing budgets and increased spending.
Zee posted a consolidated net loss of 1.96 billion rupees ($23.7 million) for the fourth quarter ended March 31, compared to a profit of 1.82 billion rupees a year ago, according to a filing. regulatory.
The company’s total revenue fell by 9.9% to 21.26 billion rupees, while expenses jumped by nearly 10%.
Indian broadcasters have suffered a drop in profits in recent quarters, with analysts indicating that loss-making new-era companies and sellers of consumer goods hit by inflation are spending less on advertising.
In a statement, Zee said its domestic advertising revenue in the March quarter fell by a tenth, blaming a “slowdown in ad spend.”
He also added that he was ending his funding of tech startup SugarBox due to inflation and the terms of an impending merger with the Indian unit of Japanese group Sony Group Corp (6758.T), but that would pump money into digital and sports ventures.
Zee had suffered setbacks with creditors over a dispute over a default mid-merger, but settled it in March.
However, recent reports indicate that the National Stock Exchange and the Bombay Stock Exchange may have to reconsider their approvals for the merger, following a ruling by the Indian regulator against an entity of the Essel Group, which owns Zee.
Sony CEO Kenichiro Yoshida said last week that the company was trying to complete the merger by the end of the first half of the fiscal year ending in March.
Zee’s results lagged rivals New Delhi Television Ltd (NDTV.NS), TV Today Network Ltd (TVTO.NS) and TV18 Broadcast Ltd (TVEB.NS), which reported a decline earnings of between 76% and 98% during the quarter. .
Shares of Zee closed down 1.08% before earnings and were down 11.6% in the March quarter.
($1 = 82.7326 Indian rupees)
Reporting by Praveen Paramasivam in Chennai; Editing by Varun HK
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