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Videocon d2h adds 0.46 mn subs in Q1, operating profit at Rs 190 cr

MUMBAI: Videocon d2h has added 0.46
million net subscribers in the fiscal
first quarter while average revenue
per subscriber (ARPU) has expanded to
Rs 205.
The Nasdaq-listed company, which is
targeting higher subscriber additions
in the second half of the fiscal due to
the 31 December 2015 deadline of
digital addressable system (DAS) in
Phase III towns, has posted an
operating profit (adjusted EBITDA) of
Rs 190.27 crore (Rs 1.90 billion) for
the quarter ended 30 June 2015.
In the trailing quarter (Q4FY15),
adjusted EBITDA stood at Rs 180 crore
(Rs 1.8 billion), while in the year-ago
period it was at Rs 150 crore (Rs 1.50
The company clarified that Q1 FY16
adjusted EBITDA is before accounting
for employee share-based
compensations cost of Rs 2.94 crore
(Rs 29.44 million) towards provision
of ESOP plan of 2014.
Net loss has narrowed to Rs 24.4
crore (Rs 244 million) compared to Rs
75.7 crore (Rs 757 million) in the
trailing quarter and Rs 55.8 crore (Rs
558 million) in the year-ago period.
Revenue during the quarter under
review swelled to Rs 662.8 crore (Rs
6.63 billion), from Rs 625.3 crore (Rs
6.25 billion) in Q4 FY15 and Rs 537.5
crore (Rs 5.37 billion) in Q1 FY15.
Subscription revenue stood at Rs
599.4 crore (Rs 5.99 billion).
EBITDA margin, meanwhile, was at
28.7 per cent, up from 28 per cent in
the trailing quarter and 27.6 per cent
in the year-ago period.
Expenses during the quarter stood at
Rs 618.1 crore (Rs 6.18 billion),
compared to Rs 604.5 crore (Rs 6.04
billion) in the trailing quarter and Rs
513.7 crore (Rs 5.14 billion) in the
earlier-year quarter.
Videocon d2h executive chairman
Saurabh Dhoot said, “We are pleased
to declare a strong set of results for
the quarter ended 30 June 2015 and
are on track to achieve the guidance
provided for fiscal 2016. With a strong
subscriber growth outlook, DTH sector
gaining market share over cable and
an improving ARPU scenario, we
believe we are just at the beginning
of a multi-year strong growth
Subscriber additions
The company has added 0.46 million
net subscribers (0.61 million gross)
during the quarter, taking its net
subscriber base to 10.64 million as of
30 June. The gross base is at 13.7
million subscribers.
ARPU has seen gradual increase over
several consecutive quarters. At the
end of Q1 FY16, ARPU stood at Rs 205,
as against Rs 202 in the trailing
quarter and Rs 187 in the year-ago
Content cost
In the first quarter of the current
fiscal, content cost comprised 37 per
cent of the total revenue. In the
trailing quarter, content cost
comprised 38.4 per cent of the
Videocon d2h said that its content
agreements with broadcasters are
sealed for three years on an average.
The bulk of the content contracts got
renewed in the second half of FY15.
Monthly churn has come down to 0.46
per cent in the quarter, from 0.85 per
cent in Q4 FY15. In the year-ago
period, churn was at 0.42 per cent per
Subscriber acquisition cost
Acquisition cost per subscriber
(hardware subsidy) stood at Rs 1,793,
down from an average of Rs 1,984 in
Videocon d2h’s revenue and EBITDA
per subscriber during Q1 stood at Rs
212 and Rs 61 respectively.
The company continues to see a pick-
up in its high-definition (HD)
subscriber base. Its HD subscriber
base represents almost 10 per cent of
the total net subscribers.
Proprietary channels
During the quarter, the company
added three proprietary channels,
namely d2h nursery rhymes, d2h
Cinema HD and another music channel.
It also launched three Active services
– Active Kids, Active Games and Active
“I am happy to share that we recently
set up an advertising team to sell ad
inventory on our own proprietary
channels. We are beginning to see an
encouraging response from multiple
advertisers,” Dhoot said.
Capex in the quarter was Rs 153 crore
(Rs 1.53 billion).
On the growth outlook, Videocon d2h
CEO Anil Khera said: “We believe
around 100 million homes will be up
for grabs by digital cable and DTH
operators in the next 4-5 years. DTH
should gain higher market share in
Phases III and IV of digitisation in
comparison to the prior phases. We
are excited and prepared to take on
the significant subscriber growth
opportunity ahead of us, as we
approach the Phase III digitisation
deadline. While actual implementation
could take time, we continue to
believe the government has a strong
intent to switch off analogue cable as
per the plan.”

Videocon d2h adds 0.46 mn subs in Q1, operating profit at Rs 190 cr

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