MUMBAI: Riding high on subscription revenue and a bumper advertising revenue growth, Zee Entertainment Enterprises Limited (Zeel) posted a 40.5 per cent jump in fiscal-third quarter net profit to Rs 1.93 billion from Rs 1.37 billion a year earlier.

Zeel?s operating revenues grew 26 per cent to Rs 9.3 billion in the third quarter from Rs 7.4 billion a year earlier.

"Zeel?s Q3 results are better than market estimates. This is evident on both ad and subscription revenue fronts," said a media analyst.

Ad revenue

Belying the overall slowdown in advertising spending due to a sluggish economy and the subdued festival season in November, Zeel?s advertising revenue grew 28.8 per cent to Rs 5.09 billion from Rs 3.95 billion a year ago.

Advertising contributed to 54 per cent of the company?s total revenue. The d growth was aided by an increase in market share in many of Zeel?s channels.

Subscription revenue

The broadcaster?s subscription revenue in the third quarter ended 31 December stood at Rs 4.09 billion, up 25.6 per cent over Rs 3.26 billion a year earlier. Its domestic subscription revenues in the third quarter grew 33.2 per cent year-on-year to Rs 2.9 billion, while international subscription revenue increased 9.4 per cent year-on-year to Rs 1.13 billion.

The company said subscription revenues are not comparable since the accounting treatment of Media Pro, a distribution joint venture between Star India and Zeel, has changed from the fourth quarter of the previous fiscal.

Zeel?s revenues from other sales and services head which includes syndication sales, play-out and transmission facilities decreased 10 per cent to Rs 197 million in the third quarter from Rs 220 million a year earlier.

Ebitda growth

The broadcaster?s operating profit rose 27.6 per cent to Rs 2.6 billion in the third quarter from Rs 2.04 billion a year earlier. Its operating profit margin in the third quarter was 27.8 per cent while the net profit margin was 20.6 per cent.

Going forward, margins could improve on higher subscriber revenue, lower sports losses and new investments turning around. However, the company would continue to invest on content.

Zee chairman Subhash Chandra said, "Indian economy has been in a vicious circle of slowing growth, high inflation and stalled capex. Advertising spends have been impacted this year due to this slowdown. The first three quarters of this fiscal have been good for Zee with a strong performance relative to the industry and competition. With one quarter to go, we are looking forward to a strong growth this year. The highlight of this quarter has been the strong growth momentum in advertising revenues despite subdued spends. The performance illustrated that our investment in content is yielding good returns. We continue to invest to create compelling content across genres."

Operating cost up

Zeel?s total expenses in the third quarter stood at Rs 6.7 billion, an increase of 26 per cent from Rs 5.38 billion a year earlier.

The company?s operating cost jumped 22 per cent to Rs 4.18 billion in the third quarter from Rs 3.4 billion a year earlier.

Zee?s employee cost rose 22.4 per cent to Rs 895 million in the third quarter from Rs731 million a year earlier, while selling and other expenses jumped 37 per cent to Rs 1.69 billion from Rs 1.23 billion a year earlier.

During the quarter, the company had launched it kids channel ZeeQ besides investing in new programmes along with increased marketing activities.

Zeel MD & CEO Punit Goenka said, " The subscription revenue during the quarter is highest ever and with digitisation roll-out (it) will (further) improve in the medium term.?

?Our network viewership saw a successful mix of new and returning shows. Overall, I am confident about the next 12 months and continue to make further investments in new content and channels. While these new channels will have an impact on the operating margins in the short-term, they will enhance our performance in the medium term,? Goenka said.

Sports business

Zeel?s revenue from sports business in the third quarter was Rs 1.07 billion while incurring an expenditure of Rs 1.16 billion.

In the third quarter of previous year, Zeel?s revenue from sports business was Rs 1.66 billion which included a one-time fee of Rs 700 million on pre-mature termination of the commercial contract with All India Football Federation (AIFF). The company had incurred expenditure of Rs 1.99 billion on sports business a year earlier.

The company expects to contain the sports losses under Rs 1 billion in Fy?13.

The company said it is yet to realise 1.4 billion from the Board of Control for Cricket in India (BCCI) and hence has not been given effect to in the third quarter results.

In November, a three-member Arbitral Tribunal had held the BCCI guilty of "exploiting its dominant position" for arbitrarily terminating its five-year broadcast rights contract with Zee. The tribunal had asked BCCI to pay Zee about Rs 1.4 billion, including the security deposit of Rs 300 million with interest at 11 per cent per annum from 31 May, 2007, for loss of profit and goodwill.

MUMBAI: A Delhi court today granted bail to Zee News and Zee Business editors Sudhir Chaudhary and Samir Ahluwalia in the alleged Rs 1 billion extortion case filed by Congress MP Naveen Jindal.

Both Chaudhary and Ahluwalia were in police custody for 20 days following their arrest by Delhi police?s crime branch on 27 November.

Additional Sessions Judge Raj Rani Mitra granted bail following a plea by Chaudhary and Ahluwalia. "Bail is granted to both the accused," Mitra said.

The court also said that both the accused will be released on furnishing a bail bond and surety of Rs 50,000 each. The two have also been directed them to surrender their passports and not leave the country without the permission of the court.

It has also asked them to cooperate with the investigation.

Earlier, the court had granted interim relief to Zee Group chairman Subhash Chandra and his son Punit Goenka. The court extended the protection of their arrest in the case till 20 December.

Chandra and Goenka?s counsel, senior advocate Geeta Luthra and Vijay Aggarwal had sought extension of the interim protection as Luthra had to go to Supreme Court to argue in another matter listed there.

The court on Saturday had reserved its order on the bail plea of the two editors after hearing them for around five hours during which the Delhi Police had opposed their application for grant of relief.

Both Chaudhary and Ahluwalia have been booked under section 384 (extortion), 120 B (criminal conspiracy) and 511 (punishment for attempting to commit offences punishable with imprisonment for life or other imprisonment) of the IPC.

The Jindal group has alleged that Chaudhary and Ahluwalia had tried to extort Rs 1 billion from the company in return for favourable coverage in the scam involving allotment of coal blocks, wherein JSPL is one of the companies that allegedly made windfall gains from arbitrary coal block allocations

Zee has, however, rubbished the allegations contending that it was JSPL which had approached Zee News to stop its aggressive coverage of the coal scam. It had also termed the arrest of its editors as illegal.

MUMBAI: A Delhi court has allowed Zee Group chairman Subhash Chandra to undergo a lie detector test in the presence of his lawyer on a plea filed by him based on the advice of his doctors.

Allowing the plea of Chandra, Metropolitan Magistrate Gaurav Rao said, ?As far as accused Subhash Chandra is concerned, he has consented for the test. I have gone through his statement?.

?In terms of his statement as well as in terms of input provided by Dr Asha Srivastava, Senior Scientific Officer..., which have been made aware to the accused, the accused shall consult his doctor and thereafter undergo the test.

?The test shall be conducted... the accused shall have the right to take along with him his counsel.?

Zee News Limited (ZNL) is fighting a legal battle with Congress MP Naveen Jindal who has alleged that the Zee News editors Sudhir Chaudhary and Samir Ahluwalia tried to extort Rs 1 billion from his company officials to go slow on its coverage of alleged Coal scam.

Jindal?s company is also alleged to have benefited from arbitrary allocation of coal blocks by the Government of India.

The court also rejected Delhi Police plea to subject the two arrested editors for the polygraph test as they refused to give their consent. The court, however, granted permission to the police to collect voice sample of Ahluwalia and Chaudhary.

Chaudhary and Ahluwalia were arrested on 27 November and are presently lodged in Tihar jail. The two will remain in judicial custody till 22 December after their bail plea was rejected.

Dismissing Delhi Police?s plea for subjecting Chaudhary and Ahluwalia to a lie detector test, the court said: ?In terms of the statement made by the accused, Samir and Sudhir wherein they have not consented to undergo the lie detector test...the application of IO is dismissed as the accused persons cannot be forced or compelled to undergo the same as it violates the right against self incrimination. Article 20 (3) of the constitution protects their right.?