May 19 (Reuters) – India’s Zee Entertainment Enterprises reported a quarterly loss on Tuesday, as weak advertising demand and higher expenses pressured margins.
Zee, which runs channels including ZeeTV, ZeeCinema and streaming platform Zee5, reported a consolidated net loss of 1.02 billion rupees ($10.57 million) for the January-March period, from a profit of 1.88 billion rupees a year ago.
Zee’s advertising revenue, which accounts for nearly 40% of the total, fell 3.5% in the quarter, as the Middle East crisis hurt ad spending in March.
Advertisements are typically the biggest source of revenue for broadcasters.
Muted demand likely kept Zee’s ad revenue under pressure during the quarter, analysts at Elara Capital said in a pre-earnings note, even as the broadcaster continued investing in content and digital platforms.
Expenses rose 19.6%, driven by a 17% increase in operational costs after Zee recognised higher charges related to movie and content rights following changes in accounting estimates.
Advertising and publicity costs surged 44% due to higher spending on content launches, including KidZ, and increased legal expenses.
Meanwhile, Zee’s subscription revenue rose nearly 4%, supported by user growth in its digital platform and higher average revenue per user.
The company’s overall revenue declined 5.4%.
Core losses in Zee5 narrowed to 84 million rupees from 753 million rupees a year ago, while revenue rose 71% to 4.7 billion rupees as the service saw an increase in the number of paying subscribers.
Peer Sun TV will report its quarterly results on Thursday.
($1 = 96.5325 Indian rupees)
(Reporting by Aleef Jahan in Bengaluru; Editing by Eileen Soreng)
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