Hathway Q1 net loss widens on digitisation

Mumbai: Increase in expenses for digitisation in the four metros and rising cost of borrowings has weighed down profitability of Hathway Cable & Datacom Ltd, a multi-system operator (MSO) with a national footprint.

Mumbai-based Hathway reported a loss of Rs 159 million in the first quarter ended June 30, 2012, 71 per cent more than in the previous quarter ended March 31, 2012 and 30 per cent higher than a year earlier. Loss of Rs 46 million on account of fluctuation in foreign exchange rates enlarged the loss in the first quarter.

HDFC Securities, in a research note, said increase in interest cost due to higher inventory of set-top-boxes (STBs) and increase in interest rates caused widening of Hathway‘s loss in the first quarter.

The company‘s finance cost in the first quarter was Rs 133.38 million, up 18 per cent from the previous quarter and 39 per cent from a year earlier.

In Mumbai, New Delhi, Chennai and Kolkata analog mode of delivery of television channels to homes will be phased out from November 1. Hathway has a total of 2.1 million subscribers in the four metros and has so far 1.1 million subscribers have been provided with set-top-boxes (STBs).

Hathway expects to install STBs at homes of another 0.7-0.9 million subscribers by the end of October 2012, according to a research note by Sunidhi Securities & Finance Ltd. Hathway also has 0.41 million broadband subscribers, with 7,000 added in the first quarter.

The company‘s revenues at Rs 1.36 billion in the first quarter were flat compared to the previous quarter and up 12 per cent from a year earlier, on the back of higher fee on activation of STBs and addition of broadband subscribers.

Its EBITDA in the first quarter at Rs 238 million was 2 per cent higher than in the previous quarter and up 25 per cent from a year earlier. Its EBITDA margins in the first quarter were 17.5 per cent, 29 basis points more than in the previous quarter and 187 basis points higher than a year earlier.

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