Cable TV

Q3-2016: Siti Cable turnaround; Reports Rs 56 crore profit; operating revenue up 67%

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BENGALURU: Last year, the DTH industry, led by the Essel Group?s Dish TV reported profits, and the trend has continued so far over the next two quarters. For the quarter ended 31 December, 2015 (Q3-2016, current quarter), it is another Essel group company, from the carriage industry - Siti Cable Network Limited (Siti Cable) that has reported a profit after tax (PAT) of Rs 56 crore (1.5 per cent margin on operating revenue or OPREV) as compared to a loss of Rs 18.5 crore in the corresponding year ago quarter and a loss of Rs 19.4 crore in the immediate trailing quarter. The growth essentially has been driven by higher activation revenue in the current quarter due to the 15 lakh subscribers added in Q3-2016.

Note: 100,00,000 = 100 lakh = 10 million = 1 crore

EBIDTA in the current quarter more than doubled (up 2.6 times) YoY at Rs 129.9 crore as compared to Rs 50.1 crore and also more than doubled QoQ (up 2.5 times) from Rs 51.5 crore.

Over the nine month period ended 31 December, 2015 (9M-2016), the company reported a PAT of Rs 0.9 crore as compared to a loss of Rs 56.6 crore during the corresponding year ago nine-month period. The company reported an EBIDTA of Rs 220 crore in 9M-2016 as compared to an EBIDTA of Rs 136.3 crore in 9M-2015.

So has the cable industry in India with Siti Cable results as a harbinger of profits, turned the corner, and could start reporting profits from now on, or is this a one off good result? Only time will tell.

Siti Cable reported a 66.9 per cent YoY OPREV growth in the current quarter at Rs 369.9 crore as compared to Rs 221.6 crore and a 57.9 per cent QoQ growth as compared to Rs 234.2 crore. For 9M-2016, Siti Cable reported 26.7 per cent YoY OPREV growth at Rs 832.3 crore as compared to Rs 649.9 crore.

Siti Cable executive director & CEO V D Wadhwa said, ?Focussing on our guiding principle of creating value for all stakeholders, the company has achieved the financial turnaround for the first time in the history of the company and reported PBT of Rs 56 crore in Q3-FY16 and Rs 5.1 crore for the nine months of FY16. At Siti Cable, our efforts to strive for operational excellence continue and during the quarter the company has added 1.1 million digital subscribers, over 10,000 broadband customers and achieved all-time high EBITDA growth of 159 percent YoY. We expect this momentum to sustain in the coming quarters. We are also aggressively looking for inorganic growth opportunities in the geographies, which make strategic sense for us to expand and have acquired some networks in the western part of the country which shall add additional 1.5 million subscribers to our existing subscriber base of 10.7 million. We strongly believe in cohesiveness among like-minded players and are actively engaged in our efforts as a consolidator in the industry.?

Revenue streams

The company reports four revenue streams: Subscription, Carriage, Activation and Broadband. Revenue from all the streams grew, with activation showing the highest YoY and QoQ growth. Subscription revenue in the current quarter increased 7.4 per cent YoY at Rs 145.8 crore (39.8 per cent of OPREV) as compared to Rs 135.7 crore (61.2 per cent of OPREV) and grew 5.3 percent QoQ from Rs 138.5 crore (58 per cent of OPREV). 

Carriage revenue in the current quarter grew 9.8 per cent YoY to Rs 60.5 crore (16.4 per cent of OPREV) as compared to Rs 55.1 crore (24.9 per cent of OPREV) and was almost flat (grew 0.3 per cent) QoQ as compared to Rs 60.3 crore (25.7 per cent).

Activation revenue in the current quarter was almost eight times (grew 7.7 times) YoY at Rs 105 crore (28.4 per cent of OPREV) as compared to Rs 13.6 crore (6.1 per cent of OPREV) and grew by more than five times (5.4 times) QoQ as compared to Rs 19.4 crore (8.8 per cent of OPREV).

Broadband revenue in the current quarter almost doubled (grew 99 per cent) at Rs 13.9 crore (3.8 per cent of OPREV) as compared to Rs 7 crore (3.2 per cent of OPREV) in Q3-2015 and increased 49.5 per cent QoQ as compared to Rs 9.3 crore (4 per cent of OPREV).

Subscription numbers

The company has added 15 lakh cable subscribers in the current quarter to reach a subscription base of 122 lakh from 107 lakh in the immediate trailing quarter. Digital subscribers increased by 10 lakh to 68 lakh from 58 lakh. The company says that it has added 11 lakh digital subscribers in the current quarter as compared to 3.3 lakh added in Q2-2016. HD subscribers in Q3-2016 have gone up to 35,372 from 25,000 in Q2-2016. Broadband subscribers in the current quarter increased 17 per cent to 1,07,000 from 91,450 in Q2-2016.

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