MOSL: ANNUAL REPORT THREADBARE (ART) | ZEE ENTERTAINMENT FY19-Earnings to cash flow conversion continues to deteriorate
ANNUAL REPORT THREADBARE (ART) | ZEE ENTERTAINMENT FY19: Earnings to cash flow conversion continues to deteriorate
Zee’s FY19 annual report highlights the company’s improved operating performance – EBIDTA rose 23% to INR25.6b. However, earnings to cash flow conversion continued deteriorating to 42% (lowest in 10 years), as working capital increased. Cash conversion cycle increased sharply from 371 days in FY18 to 440 days in FY19, primarily due to an increase in (a) inventory by INR11.5b to INR38.5b (43% of NW), (b) trade receivables by INR2.9b to INR18.2b (20% of NW), and (c) advances and deposits to aggregator/agents by INR2.5b/INR6.9b to INR12.5b/ INR7.9b (23% of NW). The aggressive accounting policy on content amortization continued; auditors have laid matter of emphasis on enhancing the related effectiveness of control on advances/deposits given for content acquisitions. Revenue/receivables from related parties (RP) increased 59%/360% to INR8.2b/INR5.3b, partially on account of merger of Videocon DTH with Dish TV. This has led to higher receivables days for RP (Dish TV: 302 days, Siti Network: 668 days) compared to overall receivable days of 77 days.
OCF post interest turns negative: For the first time in 10 years, Zee Entertainment reported negative operating cash flow, post interest and preference dividend of INR0.1b (FY18: INR4.0b), due to significant increase in working capital requirements. Cash conversion cycle increased from 371 days in FY18 to 440 days in FY19, primarily due to (a) rise in inventory days (384 days v/s 312 days in FY18), and (b) higher advances and deposits primarily for movie acquisition to 161 days (FY18: 130 days).
Zee Entertainment Enterprises is an integrated media and entertainment company engaged in broadcasting and content development, production and distribution of films via satellites. Co. is engaged in Hindi entertainment and movies; English content programming; sports channels and programming; religious and alternate lifestyle programming; music channels; special interest channels; and high definition channels with varied programming in over 169 countries globally. Also, on Zee Bollyworld channel, Co. dubbs or subtitles movies and series in English, French, Arabic, Russian, Mandarin and Melayu- Bahasa.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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