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Siti Cable acquires majority stake in two MSOs, Q2 EBITDA up 35% QoQ

MUMBAI: Multi-system operator (MSO) Siti Cable has acquired 51 per cent stake in Panchsheel Digital Communication Network and Siti Prime Uttaranchal Communication while reporting a 35 per cent growth in operating profit for the quarter ended 30 September 2015.

Panchsheel Digital Communication Network was incorporated on 21 July 2014. The company’s authorised share capital as well as paid-up capital stands at Rs 100,000. Raman Walia and Rajeev Sharma are the two directors of the company.

Incorporated on 18 July 2014, Siti Prime Uttaranchal Communication has four directors, namely Raman Walia, Rajeev Sharma, Parish Aggrawal and Pradeep Aggarwal. Its authorised share capital as well as paid-up capital is Rs 100,000

Siti Cable has outstanding advances amounting to Rs 79.51 crore (Rs 795.1 million) given to two of its subsidiaries, including one wholly-owned subsidiary, for acquisition of MSOs, direct points and technical upgradation in the near future.

The company considers the outstanding good and recoverable as it has received indemnity against the balances from the majority shareholders of the company.

During the quarter ended 30 September, Siti Cable’s consolidated EBITDA grew to Rs 52 crore (Rs 520 million), from Rs 38.1 crore in the trailing quarter. The EBITDA grew 13 per cent on a year-on-year (YoY) basis.

The MSO’s carriage revenue dipped 17.28 per cent to Rs 60.3 crore (Rs 603 million) in the second quarter ended 30 September, compared to Rs 72.9 crore (Rs 729 million) in the preceding quarter.

Revenue saw a meagre 5 per cent growth to Rs 243 crore (Rs 2.43 billion) from Rs 230.5 crore (Rs 2.3 billion) in the trailing quarter. It grew 9 per cent YoY from Rs 223.8 crore (Rs 2.2 billion).

Revenue Siti Q2'16
Subscription income increased 7 per cent over the previous quarter to Rs 139 crore, while it increased 3 per cent over the previous fiscal’s Rs 135 crore (Rs 1.35 billion).

Broadband income grew 4 per cent to Rs 9.3 crore over the trailing quarter’s Rs 9 crore (Rs 90 million). It grew 50 per cent on a YoY basis.

Siti Cable executive director & CEO VD Wadhwa said, “A focus on improved operational performance resulted in EBITDA growth of 35.2 per cent and EBITDA margin at 21.2 per cent, an expansion by 467 bps sequentially. We are looking to further streamline our broadband operations to provide stellar customer experience. Our commitment to digitisation of Phase III areas remains and we expect this to gain further momentum in the coming quarter.”

The MSO added 330,000 cable TV subscribers during the quarter review, thereby taking its digital subscriber base to 5.9 million. In the previous quarter, it had added 200,000 cable TV subscribers.

It currently has a cable TV subscriber base of 10.7 million. HD subscriber base stands at 25,000.

Operational Metrics Siti Q2'16

The MSO added 16,950 broadband subscribers to take its total base to 91,450. Broadband home passes stood at 5.86 lakh. In order to improve operating leverage, the MSO will be looking at deeper extraction of home passes.

During the quarter, the MSO expanded into 21 markets in the states of Haryana, Madhya Pradesh, Karnataka, Rajasthan, Telangana and Uttarakhand as part of the ongoing voluntary digitisation process in order to be compliant with digital addressable system (DAS) Phase III deadline.

It has also adopted MPEG 4 technology and will provide subscribers with MPEG 4 STBs equipped with personal video recording (PVR) capability.

The company has consolidated gross debt of Rs 1,236 crore (Rs 12.36 billion) and net debt of Rs 1,041 crore (Rs 10.41 billion).