BENGALURU (Reuters) – Zee Entertainment Enterprises reported a 92% slump in quarterly profit on Monday, hurt by shrinking advertisement spending and a rise in expenses.
“Challenging macroeconomic environment continues to impact operating performance,” the company said in a statement, adding that it mainly saw a slowdown in spending from fast-moving consumer goods companies.
Consolidated net profit for the third quarter-ended Dec. 31 fell to 2.4 million rupees ($29,049) from 2.99 billion rupees a year earlier.
Domestic advertisement revenue dropped 16%, while overall expenses climbed more than 10% to 18.72 billion rupees.
New content launches and theatrical releases drove up the marketing expenses, while programming and technology costs increased due to higher content costs in movies and continued investment in the Zee5 app, Zee Entertainment said.
“Theatrical performance continues to be soft,” it added.
Zee’s total income barely changed from last year at 21.27 billion rupees.
Other Indian broadcasters also suffered from a slowdown in advertisement spending in a high-inflation environment.
New Delhi Television Ltd, part of the embattled Adani Group, saw profit more than halve, while Reliance Industries-owned TV18 Broadcast Ltd and TV Today Network, which runs the India Today and Aaj Tak news channels flagged similar concerns.
Zee and the local unit of Japan’s Sony decided to merge their television channels, film assets and streaming platforms in December 2021 to create a powerhouse in a key growth market of 1.4 billion people, to take on the likes of Netflix and Disney in India.
($1 = 82.6200 Indian rupees)
(Reporting by Nallur Sethuraman in Bengaluru; Editing by Dhanya Ann Thoppil)
