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Ortel Q4 net slips 51%, adds 74,717 subs

MUMBAI: Multi-system operator (MSO) Ortel Communications has added 74,717 subscribers in the final quarter of the fiscal ended 31 March 2016 even as its consolidated net profit skid 51.1% from the year-ago period.

Ortel has digitised 37.1% of its cable TV universe. The MSO’s total subscriber base grew to 628,710, indicating that it is on course to achieve its target of netting one million subscribers by the end of FY17.

EBITDA (excluding other income) was at Rs 16.9 crore (Rs 169 million), down 16.9% from the prior year and 2.4% from the preceding quarter. EBITDA margin was at 31.8% compared to 45.4% in the earlier year and 34.4% in the trailing quarter.

Consolidated net profit for the fiscal fourth quarter stood at Rs 2.8 crore (Rs 28 million) compared to Rs 5.6 crore (Rs 56 million) a year ago and Rs 3.9 crore (Rs 39 million) recorded in Q3 of FY16.

Revenue from operations jumped 18.6% to Rs 53.3 crore (Rs 533 million) compared to Rs 44.9 crore (Rs 449 million) in Q4 of FY15. In the trailing quarter, revenue from operations stood at Rs 480 million (Rs 48 crore).

Consolidated sumarized profit and loss statement ortel

Carriage revenue fell 11.2% to Rs 8.3 crore (Rs 83 million) compared to Rs 7.4 crore (Rs 74 million) in the earlier year. In Q3 of FY16, carriage revenue stood at 9.8 crore (Rs 98 million), down 15.5% on a quarter-on-quarter (QoQ) basis.

Subscription fees, however, grew 26.5% to Rs 24.8 crore (Rs 248 million) from Rs 19.6 crore (Rs 196 million). In Q3 of FY16, subscription fees stood at Rs 21.2 crore (Rs 212 million). Connection fees from cable TV grew to Rs 6 crore (Rs 60 million) from Rs 8 million in the year-ago period and Rs 1 crore (Rs 10 million) in Q3 of FY16.

The MSO, which operates in six states, saw a dip in its average revenue per user (ARPU) on a QoQ basis even as the analogue cable TV and broadband ARPU stayed flat at Rs 141 and Rs 398 respectively.

segment-wise revenue break-up ortel

Expenditure rose 48.1% to Rs 36.4 crore (Rs 364 million) compared to Rs 24.5 crore (Rs 245 million) a year ago. In Q3, it stood at Rs 31.5 crore (Rs 315 million).

Programming cost was up 18.2% to Rs 10 crore (Rs 100 million) from Rs 8.5 crore (Rs 85 million) a year ago and Rs 9.1 crore (Rs 91 million) in the preceding quarter.

Pay channel cost per cable TV customer during the quarter fell to Rs 56.29 from Rs 60.25 a year ago and Rs 57.05 in the previous quarter. Pay channel cost as a percentage of cable TV subscription stood at 40.4% compared to 43% in the preceding quarter and 43.3% in the year-ago period.

Net revenue generating unit (RGU) addition in the exit quarter was 74,717 subscribers. The company plans to reach one million subscribers by March 2017 and holds over three lakh STBs in inventory with digital signals in place.

The company also said that 86,797 RGUs would be integrated into its last-mile network in the coming months.

Inactive RGUs as a percentage of total RGUs stood at 1.9%. Primary subscriber churn increased to 5.5% from 4.7% in the previous quarter.

Ortel provides cable TV and broadband service in Odisha, Chhattisgarh, Madhya Pradesh, Andhra Pradesh, Telangana and West Bengal.

Full-fiscal result

For the full fiscal ended 31 March, the company’s net profit almost doubled to Rs 119 million (Rs 11.9 crore) compared to Rs 56 million (Rs 5.6 crore) in the previous quarter.

EBITDA grew by 18% to Rs 703 million (Rs 70.3 crore) from Rs 597 million (Rs 59.7 crore). EBITDA margin stood at 35.8%.

Revenues from operations jumped 21.3% to Rs 1.87 billion (Rs 187.7 crore) from Rs 1.54 billion (Rs 154.8 crore).

During the year, the total RGU additions stood at 171,081 subscribers, taking total RGUSs to 701,192.

Ortel said that it saw healthy traction in states outside its primary market, Odisha. About 65% of the RGUs were added in Andhra Pradesh, Telangana, Chhattisgarh and Madhya Pradesh. It said that close to 70% of the new signings were reported in these states.

The company seeded 107,175 set-top boxes (STBs) during the year. Its digital penetration ratio increased to 37.1% from 22.7% in the previous fiscal.

region-wise summarized statement of operations ortel1

Inactive RGUs as a percentage of total RGUs was at 1.9%, up from 1.7% in the previous fiscal. Primary subscriber churn increased to 19.30% from 17.70%.

Analogue cable TV ARPU during the fiscal fell to Rs 141 from Rs 145 while digital cable TV ARPU fell to Rs 178 from Rs 186.

A positive for the MSO was the fall in pay channel cost per cable TV customer to Rs 56.82 as opposed to Rs 61.14 in the previous fiscal. Pay channel cost as a percentage of cable TV subscription remained at 43.3%.

Carriage fee grew by a healthy 34.9% to Rs 356 million (Rs 35.6 crore) from Rs 264 million (Rs 26.4 crore). Subscription fee increased 9.6% to Rs 790 million (Rs 79 crore) compared to Rs 866 million (Rs 86.6 crore).

Ortel Communications president & CEO Bibhu Prasad Rath said, “Ortel Communications reported healthy financial and operational performance during the year, led by robust RGU additions of 1.71 lakh subscribers. Growth in our core businesses has enabled us to double our PAT to Rs 119 million in FY16. I am also pleased to state that 65% of new RGUs have come from non-Odisha states of Andhra Pradesh, Telangana, Chhattisgarh and Madhya Pradesh. This reinforces our vision that the ‘last mile’ model can be successfully implemented in many states across India apart from our home market of Odisha.

“Overall, we have ended the year on a strong note and are geared up to build on this momentum in the coming year. We remain focused on achieving our stated target of one million subscribers by March 2017, which should make us the largest ‘last mile’ player in the country. We believe this model will make us one of the first few players in the sector to create sustainable value for all our stakeholders.”

Broadband business

Total broadband revenue increased 8.1% to Rs 89 million (Rs 8.9 crore) from Rs 83 million (Rs 8.3 crore) in the trailing quarter. Broadband subscription revenue increased 8.3% to Rs 83 million (Rs 8.3 crore) from Rs 77 million (Rs 7.7 crore).

Total broadband RGUs increased to 72,482 subscribers from 67,709. More than 91.5% of these are primary RGUs. Broadband ARPU for the quarter remained flat at Rs 398 compared to Rs 396.

In FY16, the MSO added 13,963 subscribers at a net level compared to 4,092 subscribers in FY15. Total broadband RGUs stood at 72,482 at the end of the fiscal compared to 58,519 at the end of previous fiscal. Broadband ARPU for the fiscal increased to 398 from Rs 394.

Ortel expects significant growth in broadband subscribers in FY17 on the back of new network rollout, a strong team, solid back-end operations, attractive broadband packages, and various other value-added services and initiatives.