Cable TV

Q3-17: Den Networks reports higher ARPUs, subscription revenue & operating profits

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BENGALURU: Following the 26.7 percent year-over-year (y-o-y) increase in the previous quarter, multiple-systems operator (MSO) Den Networks Limited (Den) reported 29.7 percent y-o-y increase in consolidated Total Income from operations (TIO) for the quarter ended December 31, 2016 (Q3-17, current quarter) as compared to the corresponding year ago quarter (Q3-16). The company also reported a 75.1 percent quarter-over quarter (q-o-q) increase in consolidated operating profit (EBIDTA) to Rs 50.34 crore (18.7 percent margin) from Rs 28.75 crore (10.6 percent margin) in the current quarter. In the corresponding year ago quarter Den had reported an operating loss (negative EBIDTA) of Rs 39.56 crore. Den’s TIO for the current quarter was Rs 298.83 crore as compared to Rs 230.39 crore in Q3-16. EBIDTA including other income was Rs 62.60 crore (22.3 percent margin of TIO) in Q3-17 as opposed to an operating loss (including other income) of Rs 27.03 crore in Q3-16.

Further the company reported lower losses for the current quarter as compared to the corresponding year ago quarter. Net loss after tax (PAT) reduced to Rs 45.19 crore in Q3-17 as compared to a loss of Rs 87.39 crore in Q3-16. Total Comprehensive Income (TCI) improved to a negative Rs 44.39 crore in Q3-17 as compared a negative Rs 87.18 crore in Q3-16.

Said DEN Networks CEO SN Sharma: “The company continues to improve on cable subscription billing on a quarter on quarter basis. ARPU (including taxes) for DAS 1, 2 and 3 markets stood at Rs 125, Rs. 95 and Rs. 64 per box respectively which reflects on improvement of 11 per cent , 6 per cent and 23 per cent respectively on Q-o-Q basis , with a strong collection efficiency at 95 per cent ."

Sharma also announced that DEN has  achieved break even in the company's broadband business for the full quarter despite telecom launches and freebies offered by the big players.

Segment numbers

The company has two operating segments that contribute to revenue for now– Cable Distribution Network (Cable) and Broadband (brand Boomband). Both segments reported improved operating numbers. Its third segment – the soccer segment has no revenue as of now. The segment has neither income nor result for the current quarter. That's because the company is gradually exiting from the business and has divested almost 80 per cent of its equity in the team.

Cable segment reported 35.4 percent growth in operating revenue in Q3-17 at Rs 277.36 crore as compared to Rs 204.84 crore in Q3-16. The segment’s operating loss in the current quarter improved significantly to Rs 11.68 crore as compared to higher operating loss of Rs 43.90 core in Q3-16 and an operating loss of Rs 31.22 crore in the immediate trailing quarter.

Broadband segment revenue increased 82.6 in the current quarter to Rs 21.47 crore as compared to Rs 11.76 crore in Q3-16. The segment reported lower standalone operating loss in Q3-17 of Rs 7.22 crore as compared to an operating loss of Rs 19.77 crore in the corresponding year ago quarter.

Let us look at the other numbers reported by Den

Other Income in Q3-17 declined 2.2 percent to Rs 12.26 crore as compared to Rs 12.53 crore in Q3-16

Total Expenditure in the current quarter was 0.8 percent lower at Rs 317.73 crore (118.2 percent of TIO) as compared Rs 320.17 crore (162.6 percent of TIO) in Q3-16.

A major cost head for Den is Content Costs which increased 3.5 percent to Rs 119.28 crore (44.4 percent of TIO) in Q3-17 from Rs 115.27 crore (58.5 percent of TIO).

Other Expenses reduced 26.9 percent in the current quarter to Rs 84.44 crore (31.4 percent of TIO) as compared to Rs 115.49 crore (58.7 percent of TIO) in Q3-16.

Placement fees increased 2.9 percent in the current quarter to Rs 11.82 crore (4.4 percent of TIO) as compared to Rs 11.49 crore (5.8 percent of TIO) in the corresponding year ago quarter.

Employee benefits expense in Q3-17 increased 17.3 percent to Rs 32.95 crore (12.3 percent of TIO) as compared to Rs 28.10 crore (14.3 percent of TIO) in Q3-16.

Finance costs in the current quarter increased 9 percent to Rs 20.44 crore (7.6 percent of TIO) as compared to Rs 18.75 crore (9.5 percent of TIO) in Q3-16.

Note: (1) All numbers mentioned in this report are standalone unless stated otherwiserigh.

(2)The unit of currency in this report is the Indian rupee - Rs (also conventionally represented by INR). The Indian numbering system or the Vedic numbering system has been used to denote money values. The basic conversion to the international norm would be:

(a) 100,00,000 = 100 lakh = 10,000,000 = 10 million = 1 crore.

(b) 10,000 lakh = 100 crore = 1 arab = 1 billion.

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