Indian company Zee Entertainment's third-quarter profit more than doubled thanks to subscriptions

BENGALURU (Reuters) – Zee Entertainment Enterprises' third-quarter profit more than doubled as a surge in subscriptions offset a weak advertising environment, the Indian broadcaster reported on Tuesday in its first results since its failed merger with Sony India.

Zee's profit rose to 585 million rupees ($7.05 million) in the three months ended December 31, from 243.2 million rupees a year earlier.

The results come weeks after Sony abandoned its merger with Zee, ending a deal that could have created one of India's biggest television networks, citing breaches of contract.

Subscription revenue in the third quarter was supported by recognition of Rs 590 million from Siti Network, part of Essel Group, Zee said in a statement.

Zee's subscription revenue rose 3% in the quarter, while advertising revenue fell 3%.

While the third quarter saw some seasonal holiday momentum, the overall advertising environment continues to recover slowly, the company said.

Since the merger does not go through, certain costs related to legal, compliance and advisory fees are to be expected.

Zee expects it will take six to eight months for its efforts to be reflected in margin development, with fiscal 2025 expected to show a significantly better margin than the fiscal year ending March 31.

Zee's operating income fell 3% to Rs 20.46 billion while expenses rose 5.4%.

($1 = 82.9676 Indian rupees)

(Reporting by Sethuraman NR in Bengaluru; Editing by Sonia Cheema)