Zee Entertainment Enterprises Limited (ZEEL) has reported a decline of 3% in its operating revenue for the third quarter of fiscal 2023-24 compared to the same period the previous year.

In its Q3 FY24 earnings report, the company also reported a decline in advertising revenue by 3.3 % in the third quarter ending December 31, 2023. The net profit of ZEEL for Q3 FY24 was Rs 58.5 crore, up from Rs 24.32 crore in the same period in FY23.

According to the company, its ad revenue was Rs 1,027.4 crore in Q3 FY24, down from Rs 1,063.4 crore in the same period last year.

The domestic ad revenue of ZEEL was impacted by cricket during Q3, the company said, adding that while Q3 saw some seasonal festive uptick, overall pace of ad environment recovery continues to be slow.

The operating revenue of the company stood at Rs 2,045.7 crore in Q3 FY24, down by 3% from Rs 2,108.8 crore in the same quarter last fiscal.

The company reported a total income of Rs 2,073.3 crore in Q3 FY24 versus Rs 2,123.5 crore total income in the same period in FY23.

The digital platform ZEE5 saw a Y-o-Y revenue jump of 15% in Q3 FY24.

The EBITDA for the company declined by 42.9 % from Rs 366 crore for Q3 FY23 to Rs 209.2 crore in Q3 FY24 and the company's profit after tax (PAT) declined 6.4% YoY to Rs 53.4 crore.

ZEEL saw a subscription revenue jump of 3% in Q3 FY24 at Rs 921.3 crore compared to Rs 894.4 crore in Q3 FY23. According to the company, most of the subscription revenue was up due to the revised rates after NTO 3.0 implementation and also from the digital business of Zee5.

The company admitted to a growth slowdown but called it only transitory and not a structural issue. It said that there was an impact on the cost structure due to the merger with Culver Max Entertainment Pvt Ltd (which was called off).

“We had accelerated our technology and digital investments in anticipation of impending merger to be able to hit the ground running on merger synergies. Distraction or discontinuation on certain profitable businesses – three channels to be divested, discontinuation of certain profitable international businesses etc. Merger related expenses – legal, compliance, advisors fee, people etc,” ZEEL said.

It also said there were industry-wide headwinds impacting margins and an increased competitive intensity led to escalation in content cost and higher prices for acquiring rights for third-party content.

As per the company, other factors which impacted margins include higher investment intensity for building new capabilities such as Digital / OTT; lack of operating leverage due to slower revenue growth and advertising revenue getting hit to consumption slowdown.

In its earnings report, ZEEL said that it is confident of its ability to accelerate its revenue growth once the ad environment stabilises.

The broadcaster's all India TV network share year-to-date FY24 was up 40 basis points Y-o-Y. Zee network share reduced to 16.5% in Q3 FY24 from 17.9 % in Q2 FY24.