BENGALURU (Reuters) -India’s Zee Entertainment reported a lower third-quarter revenue on Tuesday due to weak advertising demand and the broadcaster said it expects certain costs related to its failed merger with Sony India.
Zee’s operating revenue fell 3% to 20.46 billion Indian rupees ($246.27 million) for the quarter, while expenses rose 5.4%.
The company’s profit, however, more than doubled to 585 million rupees from a year earlier when the company had some merger-related costs.
The results come weeks after Sony scrapped its merger with Zee, ending a deal that would have created an Indian TV juggernaut with more than 90 channels across sports, entertainment and news.
Zee’s subscription revenue for the quarter rose 3%, while advertising revenue dropped 3%. Overall pace of recovery of the advertisement environment continues to be slow, the company said.
Expenses related to the merger with Sony stood at 603.4 million rupees and Zee said it expects certain related costs such as legal, compliance and adviser fees.
Zee took several steps, including closing some channels, for the Sony deal that was in the works for two years, resulting in one-time and recurring costs.
Earnings before interest, taxes, depreciation and amortization margin fell to 10.2% in the third quarter from 17.4% a year earlier.
Zee expects to take six to eight months for its efforts, including cost cuts, to start showing up in the margin performance, with fiscal 2025 expected to have meaningfully better margin than fiscal 2024.
($1 = 83.0781 Indian rupees)
(Reporting by Sethuraman NR in Bengaluru; Editing by Sonia Cheema and Shounak Dasgupta)
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