Siti Cable's Q1-2014 losses almost quintuple Q1-2013 losses

BENGALURU: Siti Cable Network Limited (Siti Cable), the erstwhile Wire and Wireless (India) Limited, reported for Q1-2014 a negative PAT of Rs 27.07 crore, almost five times (467 per cent) the negative PAT of Rs 4.77 crore the company had reported during the corresponding quarter (Q1-2013) last year.

However, Siti Cable's consolidated operating profit (EBITDA) for Q1-2014 was Rs 31.18 crore as compared to Rs 27.74 crore during corresponding quarter last fiscal, showing a 12.4 per cent growth.

Siti Cable paid Rs 61.80 crore towards carriage sharing, pay channel and related costs during Q1-2014 as compared to NIL during Q1-2013 and Q4-2013. The cable service provider had paid Rs 234.345 crore towards this expense head during FY-2013.

Let us look at some of the other results for Q1-2014

Operating revenue in Siti Cable's case is primarily generated from subscriber related income especially from Digitisation, income from bandwidth charges, income from advertisements, STB activation charges and other operating revenues.

The company reported a 27 per cent growth in consolidated revenues to Rs 144.29 crore for Q4-2014 as compared to Rs 113.5 crore for Q1-2013. Siti Cable's consolidated revenues for Q1-2014 were slightly lower (2.1 per cent) than the Rs 147.44 crore reported for Q4-2013.

Siti Cable's main operating expenses include cost of goods and services, employees' cost, selling and distribution expenses and other expenditure. Its major cost item was cost of goods and services recorded as Rs 77.83 crore during the quarter representing 54 per cent of the total revenue in comparison to Rs 60.04 crore in Q1-2014, representing 53 per cent of the total revenue. Another major cost item was Foreign Exchange Fluctuation due to Rupee devaluation during the Q1-2014, which has been recorded by Rs 5.11 crore.

Total operating costs for Q1-2014 at Rs 113.1 crore (78 per cent of consolidated revenues for Q1-2014) were higher by 32 per cent than the Rs 857.6 crore (76 per cent of consolidated revenues for Q1-2013) for the corresponding quarter last year, and were 6.9 per cent lower than the total operating costs of Rs 121.42 crore reported for Q4-2013.

Employee benefit costs for Q1-2014 at Rs 9.11 crore, though two per cent lower than the Rs 9.29 crore reported for Q4-2013, were 17.3 per cent higher than the Rs 7.69 crore reported for the corresponding quarter last year (Q1-2013).

Other expenses for Q1-2014 at Rs 39.90 crore also saw a steep reduction of 48.3 per cent as compared to the Rs 77.18 crore in Q1-2013 and were lower by 67 per cent than the Rs 121.12 crore during Q4-2013.

Siti Cable paid Rs 26.13 crore towards finance cost for Q1-2014, 48 per cent more than the Rs 17.57 crore it paid in Q1-2013, but 15.4 per cent lower than the Rs 30.9 crore it paid in Q4-2013.

Siti Cable chairman Subhash Chandra said, "The on-going digital revolution in Indian cable television distribution industry is set to bring in all round gains for the entire industry value chain. Digitisation will transform the way television is seen, consumed and marketed. For customers, digitisation brings an enhanced viewing experience, expanded channel pool, power to choose and pay only for the chosen channels. For MSOs like Siti Cable, the digitisation will bring digitally addressable consumer base leading to higher revenues and profitability."

Despite uncertain environment Siti Cable has done well in this quarter and has driven higher revenue through relentless focus on operational excellence. Siti Cable is EBITDA positive in this quarter as well, which clearly indicates continuing growth path", Chandra said.

Siti Cable executive director and CEO V D Wadhwa said, "Our focus area is to increase the collection of monthly subscription revenues from the ground. We made healthy progress in metros cities where we are present. We are far ahead of other operators in terms of subscriber wise billing and collection. In phase-II cities the collection are likely to improve in coming quarters. We have also collected significant numbers of Subscriber Application form (SAF) and Channel/Package selection form from Delhi & Mumbai."

Wadhwa added, "Digitisation marks the beginning of an organised and professional way of conducting business and opens up possibilities of multiplier revenues from television and numerous value added services (VAS). The encouraging growth trends make us more confident of further accelerating the growth momentum and serving the cable TV viewing needs of many more million Indians on Siti Cable Network."

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