(Reuters) – India’s Zee Entertainment Enterprises on Thursday reported its first profit in three quarters, as strong demand for its movies and a pickup in subscriptions eclipsed a decline in advertisement revenues.
The media and entertainment company posted an 8.9% rise in consolidated net profit to 1.23 billion rupees ($14.77 million)for the second quarter ended Sept. 30.
The company, which owns TV channels including Zee TV and Zee Cinema, posted an 8% rise in its subscription revenue on a year-on-year basis.
Other sales and service revenue rose 201%, helped by higher syndication and strong theatrical performance of its movies including “Gadar 2”, even as its domestic advertisement revenue declined 2.1%.
“While some early pick-up in ad spending was witnessed led by FMCG during Q2, overall pace of ad environment recovery continues to be slow,” Zee said in a statement.
Its results contrast weak quarterly earnings at Indian broadcasting peers including NDTV and TV18 Broadcast as high inflation forces businesses to cut back on advertisement spending.
Zee’s total expenses rose 23% due to higher content costs in movies and investment in ZEE5, its streaming platform.
Total income grew 22.97% to 25.1 billion rupees.
The results come months after an Indian tribunal cleared a long-delayed planned merger between Zee and Sony’s Indian business to create a $10 billion media and entertainment giant. In October, another tribunal lifted the market regulator’s ban on CEO Punit Goenka holding board positions in any Zee Group companies, paving the way for him to head the new firm. However, Sony said in September it would take a few more months to complete the deal.
The broadcaster’s shares closed 1.2% higher ahead of results on Thursday.
($1 = 83.2760 Indian rupees)
(Reporting by Aleef Jahan in Bengaluru; Editing by Devika Syamnath)