Q1-2015: Siti Cable reports 47.5 per cent y-o-y op income growth, triple subscription rev

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By Tarachand Wanvari Posted on : 12 Aug 2014 10:49 pm

BENGALURU: Essel group’s Subhash Chandra led Siti Cable Network Limited (Siti Cable) reported a 47.5 per cent jump in consolidated Total income from operations (TIO) in Q1-2015 at Rs 209.02 crore as compared to the Rs 141.74 crore in Q1-2014, but 10.4 per cent lower than the Rs 233.34 crore in Q4-2014. Overall, total revenue for the current quarter at Rs 211 crore was 46 per cent more than the Rs 144.1 crore reported in the year ago quarter. Siti Cable reported subscription revenue at Rs 105.7 crore as compared to Rs 32.1 crore for the corresponding quarter of last fiscal and hence recorded a growth of 229 per cent. 
 
The company’s loss was higher in Q1-2015 by 10 per cent at Rs 31.67 crore in Q1-2015 as compared to the Rs 28.77 crore in Q1-2014 and was higher by 51.8 per cent from the loss of Rs 20.86 crore reported in Q4-2014. However, the company’s operating profit (EBIDTA) in Q1-2015 at Rs 36.3 crore (17.4 per cent of TIO) was 16.3 per cent more y-o-y as compared to the Rs 31.2 crore (22 per cent of TIO) and 30.1 per cent more than the Rs 27.9 crore (12 per cent of TIO) in Q4-2014. 
 
Note: (1) 100,00,000 = 100 Lakhs = 10 million = 1 crore.
 
(2) The figures mentioned in the report are consolidated unless stated otherwise. 
 
Siti Cable chairman Chandra said, “The performance during the quarter reflects the investment that Siti is making to grow its business and market share. This has been accompanied by a strong improvement in both top line and bottom line growth of the company during the quarter due to continued emphasis on providing quality services to our consumers and superior technological support to our business partners.” 
 
Let us look at the other numbers for Q1-2015 reported by Siti Cable 
 
Total expenditure in Q1-2015 was 47.8 per cent higher at Rs 203.76 crore (97.5 per cent of TIO) as compared to the Rs 137.89 crore (97.3 per cent of TIO) in Q1-2014 and 12.6 per cent lower than the Rs 233.07 crore (99.9 per cent of TIO) in Q4-2014. 
 
The company’s carriage sharing, pay channel and related cost (pay channel cost) in Q1-2015 at Rs 125.55 crore (60.1 per cent of TIO) was more than double (2.03 times) the Rs 61.8 crore (43.60 per cent of TIO) in Q1-2014 and 1.1 per cent more than the Rs 124.16 crore (53.21 per cent of TIO) in Q4-2014. 
 
Y-o-y the company’s finance cost was 16.2 per cent higher at Rs 30.37 crore (14.5 per cent of TIO) in Q1-2015 as compared to the Rs 26.14 (18.4 per cent of TIO) crore, while q-o-q it was 2.8 per cent lower than Rs 31.24 crore (13.4 per cent of TIO).
 
The company’s other expense at Rs 38.05 crore (18.2 per cent of TIO) was 4.7 per cent lower than the Rs 39.19 crore in Q1-2014 and almost half (49.5 per cent less) than the Rs 75.93 crore (32.31 per cent of TIO) in Q4-2014. 
 
Siti Cable CEO V D Wadhwa said, “We continue to focus on improvement in quality of our services to our viewers and improvement in our subscription revenues.  The results for the quarter are reflective of these efforts. The subscriber revenue during the quarter has shown robust growth of 229 per cent and with the starting of package billing in DAS II cities and likely roll out of digitization in phase III & IV, it is set to further improve in the coming quarters.” 
 
Additional Note: (1) In view of the mandatory digital addressable system ('DAS') regulation announced by the Ministry of Information and Broadcasting, Government of India, digitization of cable networks has been implemented in the cities notified for Phase 1 and Phase 2 effective November 1, 2012 and April 1, 2013 respectively. Owing to the initial delays in implementation of DAS in phase 1 cities and challenges faced by all the Multi-System Operators (MSOs) during transition from analogue business to DAS, the company says that it is in the process of executing contracts with the subscribers and implementation of revenue sharing contracts entered into with the local cable operators (LCOs). 
 
Accordingly, the Company has invoiced and recognized subscription revenue net of sharing of revenue with the LCOs under the new DAS regime amounting to Rs. 13,497.4 lakhs (standalone Rs.9,605.34 lakhs) for the quarter ended June 30, 2014 respectively based on certain estimates derived from market trends and ongoing discussion with the LCOs. The company says that its management is of the view that the execution/implementation of such contracts will not have a significant impact on the subscription revenue for the current period. 
 
(2) During the quarter, the Company says that it has revised the useful lives of its fixed assets to comply with the requirements as mentioned under Schedule II of the Companies Act, 2013. Accordingly, the depreciation expense for the quarter ended June 30, 2014 is higher by Rs. 458.18 lakhs (standalone financial Rs. 406.55 lakhs). Similarly, in case of  fixed assets whose life has been completed as on March 31, 2014, the carrying value (net of residual value) of those assets accounting to Rs. 1,068.84 lakhs (amounting of  Rs. 167.44 lakhs in standalone financial) has been adjusted with the opening balances of retained earnings i.e. deficit in statement of profit and loss.
 
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