DEN Networks: healthy revenue and profit growth in FY10

MUMBAI: The Sameer Manchanda-promoted multi system operator (MSO) Den Networks appears to have metamorphosed into a giant - almost overnight. If one goes by its latest financials, it probably has emerged as the biggest MSO in the country. The revenues it reported have apparently taken it ahead of its main and much talked about competitor Hathway.

Revenues for the year ended 31 March 2010 went up by 28.3 per cent touching Rs 9.19 billion (Rs 7.16 billion in FY09). Its other operating income more than doubled from Rs 41.6 million in FY09 to Rs 87.5 in FY10. Company sources say that the revenue from its cable operations stood at around Rs 5 billion for the fiscal. Hathway as a comparison notched up revenues of around Rs 4 billion for the fiscal. 
Demonstrating a very strong growth story, the company has posted a consolidated net profit of Rs 301.1 million for the fiscal ended 31 March 2010, as compared to a net loss of Rs 151.1 million it suffered in the previous fiscal.

The consolidated results includes the financials of its distribution JV Star DEN (50:50) and approximately 70 cable subsidiaries in which DEN holds a majority stake.

Den‘s expenses for the fiscal stood at Rs 8.62 billion, up from last fiscal‘s Rs 7.25 billion. The operating and administrative costs at Rs 7.72 billion rose in proportion to the firm‘s overall growth, however, the depreciation charges incurred this fiscal at Rs 328.8 million are twice as much as last fiscal‘s Rs 160.3 million.

On an operational level, the firm made a profit of Rs 567.7 million as compared to the operational loss it made in FY09 of Rs 82.1 million.  
Its other income in FY10 also more than doubled at Rs 65 million as compared to Rs 30 million in FY09. However, Den‘s interest expenses at Rs 194.4 million increased by 94.6 per cent.

On a standalone basis as well, the company has turned profitable as it posted a net profit of Rs 208.2 million, as against a net loss of Rs 137.6 million in the year ago period.

Total revenue jumped to Rs 3.28 billion in the fiscal from Rs 2.69 billion in the year ago period. Expenses grew marginally to Rs 2.95 billion (FY10), from Rs 2.73 billion (FY09).

The company boasts of a subscriber base of 11 million, including 400,000 digital subscribers. It claims a majority share in states like Uttar Pradesh, Delhi and Karnataka and parts of Maharashtra.

The cable MSO‘s ARPUs (average revenue per user) are at Rs 190 from direct subscribers and Rs 175 from secondary subscribers, sources claim.

The DEN shares closed at Rs 203.2 on Friday.

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