Siti Cable reports significant improvement in EBIDTA in Q2-2014

BENGALURU:  The painstaking rollout of the digitisation of India's cable TV ecosystem and the depreciation of the rupee are taking their toll - both positively and negatively -  on national MSOs.  Take the case of Essel Group company Siti Cable Network Limited (Siti Cable), the erstwhile Wire and Wireless (India) Ltd (WWIL). Its latest quarter (Q2-2014) shows that the company has shown an improvement in its EBIDTA to Rs 32.98 crore which is 74 per cent higher than the previous corresponding quarter last fiscal.  It's bottomline is however stained red in  Q2-2014 with a negative PAT of Rs 21.87 crore, almost double (173 per cent) the negative PAT of Rs (-12.65 ) crore the company had reported during the corresponding quarter (Q2-2013) last year. However, the loss is lower than the Rs (-27.07) crore for the immediate preceding quarter (Q1-2014).  

Let us look at some other numbers for Siti Cable in Q2-2014

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

The cable network reported total revenue of Rs 162.94 crore for Q2-2014, which was 56.7 per cent more than the Rs 103.98 crore for Q2-2013 and 12.9 per cent more than the Rs 144.29 crore in Q1-2014.

Total expenses for Q2-2014 at Rs 129.96 crore were 57 per cent more than the Rs 85.06 crore for Q2-2013 and 15 per cent higher than the Rs 113.1 crore for Q1-2014.

Siti Cable claims that it is the only MSO in India which shares 25 per cent carriage revenue with local cable operators. A big chunk of its expense is carriage sharing, pay channel and related costs in the latest quarter. The company spent Rs 65.46 crore in Q2-2014 towards this head, which was 21.7 per cent higher than the Rs 53.03 crore for Q2-2013 and six per cent more than the Rs 61.8 crore during the immediate preceding quarter Q1-2014.

 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 82.7 crore during the quarter (Q2-2014)  representing 51 per cent of the total revenue in comparison to Rs 62.15 crore in Q2-2013, representing 60 per cent of the total revenue.

Siti Cable’s Selling and Distribution Expense for Q2-2014 at Rs 12.42 crore was more than quadruple (424 per cent) the Rs 2.93 crore for Q2-2013 and more than double (225 per cent) the Rs 5.51 crore for Q1-2014. Its administrative expense at Rs 25.44 crore for Q2-2014 was almost double (95 per cent more) than the Rs 13.03 crore for Q2-2013 and 22.7 per cent more than the Rs 20.74 crore in Q1-2014.

Another major cost item was foreign exchange fluctuation due to Rupee devaluation during the Q2-2014, which has been recorded at Rs 7.69 crore, says the company; the corresponding figure for Q1-2014 was Rs 5.11 crore.

Siti Cable chairman Subash Chandra said, “The industry is at an inflexion point where creating the valuable ecosystem for all stake holders be it consumer, broadcaster or last mile local cable operators will ensure sustainable growth. We see immense opportunity for digitization in India in the years ahead.”

Siti Cable CEO V D Wadhwa said, “We are pleased to report a healthy performance in the second quarter of the year, our total revenue and EBITDA in the quarter grew to Rs 162.9 crore and Rs 33 crore, a growth of 57 per cent and 74 per cent respectively over last fiscal. Our growth was largely due to greater focus on subscription revenue despite low seeding of STB’s during the quarter. We shall continue to focus on business expansion and revenue maximization in coming quarter.”

Siti Cable informed BSE that the board of directors of the company at its meeting held on 23 October 2013, inter-alia, has approved the appointment of Anil Kumar Malhotra as manager of the company for a period of three years.