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Ortel’s Q1 net profit falls amid digitisation

MUMBAI: MSO Ortel Communications’ net profit for the fiscal first quarter fell 68.9% to Rs 9 million compared to Rs 2.8 crore (Rs 28 million) in the preceding quarter. On a year-on-year basis, the net profit dipped 64.8%.

The net profit margin fell to 1.6% compared to 5% in the preceding quarter and 5.7% in the year-ago period.

EBITDA excluding other income dipped 20.9% to Rs 13.4 crore from Rs 16.9 crore in the preceding quarter.

EBITDA margin for the quarter was 25.5%. It was 31.8% in the preceding quarter and 33% in the year-ago period.

Revenue from operations dipped 1.6% on a quarter-on-quarter basis to Rs 52.4 crore (Rs 524 million) from Rs 53.3 crore (Rs 533 million) in the trailing quarter. On YoY basis, there was a 29.1% fall.

Total expenditure increased 7.3% on QoQ basis to Rs 39 crore (Rs 390 million) from Rs 36.4 crore (Rs 364 million). On a YoY basis, the expenditure increased 43.5% from Rs 27.2 crore (Rs 272 million).

Programming cost remained flat at Rs 10 crore (Rs 100 million) on a QoQ basis, while on YoY basis it increased 11.9% from Rs 8.9 crore (Rs 89 million).

Bandwidth cost for broadband increased 19.8% to Rs 2.6 crore (Rs 26 million) on QoQ basis. On a YoY basis, it increased 53.1%. Bandwidth cost for digital increased to Rs 1.3 crore (Rs 13 million) from Rs 3 million in the preceding quarter and Rs 10 lakh (Rs 1 million) on YoY basis.

Ortel FY17 Q1 Consolidated Summarized Profit & Loss Statement

During the quarter, total subscriber additions stood at 68,949, taking the total subscriber base to 7,70,141 as on 30 June. Out of 68,949 subscribers added, close to 83% were added in the states of Andhra Pradesh, Telangana, Chhattisgarh and Madhya Pradesh.

The MSO said that 65,782 subscribers are in the pipeline and would be integrated into the company’s last-mile network in the coming months. About 72% of the new signings were recorded in non-Odisha states.

Cable TV business

Cable TV subscribers increased 63,822 during the quarter to take the total base to 6,92,532 subscribers. In the preceding quarter, the MSO had added 69,944 subscribers.

Of the total subscribers, digital cable TV subscribers stood at 302,281 while analogue subscribers stood at 390,251.

During the quarter, the MSO seeded 69,269 set-top boxes (STBs), thereby improving the digital penetration ratio significantly to 43.6% from 37.1% in the preceding quarter and 23.6% in the year-ago period.

The company has adequate STBs in place to implement digitisation under Phase III.

Cable TV revenue increased 5.3% on QoQ basis to Rs 41.2 crore (Rs 412 million). On a YoY basis, the revenue increased 44.9%.

Cable subscription fee increased to 11.5% to Rs 27.7 crore (Rs 277 million) on a QoQ basis. It saw a growth of 38.7% on a YoY basis.

Carriage fee increased 7.8% on a QoQ basis to Rs 8.9 crore (Rs 89 million). On a YoY basis, it increased 14.3%.

Ortel FY17 Q1 Segment-wise Revenue break-up

The company’s digital cable TV ARPU fell to Rs 169 during the quarter from Rs 174 in the preceding quarter. In the previous fiscal, the digital cable TV ARPU was Rs 185.

Analogue cable TV ARPU stood at Rs 141, the same as the preceding quarter. In the year-ago period, the analogue ARPU stood at Rs 144.

The combined analogue and digital ARPU during the quarter was Rs 152. In the preceding quarter, the ARPU was Rs 151 while in the year-ago period it was Rs 155.

The company’s pay channel ARPU per subscriber went Rs 50.3 down from Rs 56.3 in the preceding quarter and Rs 62.4 in the year-ago period. The pay channel cost as a percentage of cable TV subscription stood at 36% compared to 40.4% in the preceding quarter and 44.7% in the year-ago period.

Ortel FY17 Q1 Key Operating Highlights

Ortel FY17 Q1 Key Operating Highlights (Cont’d.)

During the quarter, the MSO signed a deal based on reference interconnection offer (RIO) for digital addressable system (DAS) areas with Star India and IndiaCast. This, it said, would help provide digital services in true spirit by giving the ultimate choice to customers.

Broadband business

Revenue from broadband increased 6.3% to Rs 9.5 crore (Rs 95 million) from Rs 8.9 crore (Rs 89 million) in the preceding quarter. In the year-ago period, the revenue was Rs 7.5 crore (Rs 75 million).

During the quarter, the MSO added 5,127 net subscribers compared to 4,773 in the preceding quarter and 2,381 subscribers in Q1 FY2016. Total broadband subscribers stood at 77,609.

Broadband ARPU increased to Rs 401 per month from Rs 398 in the preceding quarter and Rs 393 in the year-ago period.

Ortel FY17 Q1 Estimated Homes ReachedThe MSO has introduced a wide range of plans including 100 Mbps DOCSIS 3.0 broadband internet in Odisha, becoming the first MSO to offer 100 Mbps broadband in the state of Odisha.

Solid broadband infrastructure set-up combined with a strong team and attractive broadband packages should result in significantly higher growth in broadband business in the coming years, it stated.

Bibhu-Prasad-Rath-insideOrtel Communications president & CEO Bibhu Prasad Rath said, “We have begun the year on a positive note with healthy results in our cable television and broadband segments. This is reflected in the revenues which grew y-o-y by 45% and 26% respectively in Q1FY17. I am also pleased to highlight that the total subscriber addition stood strong at 68,949 during the quarter, taking our total subscriber base to 770,141. Our profitability, however, was impacted during the period under review primarily due to lower quarterly execution in the infrastructure leasing business. Going forward, I expect the infrastructure leasing business to return to normalcy in the coming quarters as execution picks up.

“The roadmap for FY2017 appears promising as we are geared up to demonstrate better operational and financial performance on the back of higher subscriber base. We firmly believe our last-mile B2C model is sustainable and will create notable value for all the stakeholders.”

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