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Siti Cable’s turnaround script in Q3 and aggressive growth plans
MUMBAI: Subhash Chandra-promoted Siti Cable Network has turned around at the operational and net profit level in the fiscal third quarter while adding 1.1 million digital video customers, expanding its footprint and readying a fresh funding of Rs 650 crore (Rs 6.5 billion) from the promoters.
“The company has achieved the financial turnaround for the first time in its history. We expect this momentum to sustain in the coming quarters,” said Siti Cable executive director and CEO VD Wadhwa.
Siti Cable’s fiscal third quarter net profit stood at Rs 56 crore (Rs 560 million) compared to a net loss of Rs 22.9 crore (Rs 229 million) in the previous quarter. The multi-system operator (MSO) had reported a net loss of Rs 16 crore (Rs 160 million) a year ago.
Operating profit (EBITDA) surged 159 per cent from the earlier year to Rs 129.9 crore (Rs 1.3 billion). It grew 152 per cent quarter-on-quarter (QoQ).
Siti Cable’s revenue for the quarter stood at Rs 374.8 crore (Rs 3.75 billion), registering a 54 per cent QoQ and 68 per cent year-on-year (YoY) jump.
Carriage and other revenue streams
Carriage revenue stood almost flat at Rs 60.5 crore, from Rs 60.3 crore (Rs 603 million) in the trailing quarter. In the year-ago period, carriage revenue stood at Rs 55.1 crore (Rs 551 million).
With the MSO deploying 1.1 million set-top boxes (STBs) in the quarter, activation revenue saw a big growth. While in the three-month period ended 31 December 2015 it stood at Rs 105 crore (Rs 1050 million), in the preceding quarter it was Rs 19.4 crore (Rs 194 million). In the year-ago period, it was at Rs 13.6 million (Rs 136 million).
Subscription revenue grew to Rs 145.8 crore (Rs 1458 million), from Rs 138.5 crore (Rs 1385 million) in the previous quarter and Rs 135.7 crore (Rs 1357 million) a year ago.
Taking the inorganic route in the quarter, Siti Cable expects to add 1.5 million subscribers to its existing cable TV subscriber base of 10.7 million.
Siti Cable acquired majority stakes or entered into strategic partnerships with regional MSOs in Maharashtra, Gujarat and Odisha for expansion in Phases III and IV.
“We are aggressively looking for inorganic growth opportunities in the geographies, which makes strategic sense for us to expand. We have acquired some networks in the western part of the country, which shall add additional 1.5 million subscribers to our existing subscriber base of 10.7 million. We strongly believe in cohesiveness among like-minded players and are actively engaged in our efforts as a consolidator in the industry,” said Wadhwa.
Siti Cable said that it further expanded its footprint by entering into 100+ new markets in Andhra Pradesh, Telangana, West Bengal, Maharashtra, Karnataka, Madhya Pradesh, Bihar, Jharkhand, Chhattisgarh, Rajasthan, Uttrakhand, Uttar Pradesh and Haryana.
With this expansion, the presence of Siti Cable has reached more than 250 cities across the country.
The MSO also organised extensive on-ground education programmes for operators in DAS Phase III cities. Objective of these programmes was to inform and educate local cable operators (LCOs) about the benefits of digitisation and give a push to set-top box (STB) seeding.
Siti Cable’s broadband operations added 15,550 new customers. It exited December 2015 with an overall broadband subscriber base of 1,07,000. The company is looking to expedite the roll out of broadband operations at a quicker pace.
With growing customer demand for HD channels, Siti Cable strengthened its HD bouquet by adding 15 more HD channels. It now offers over 45 HD channels. During the quarter, the company added 10,372 HD customers.
Further fund infusion by Promoter Group entities
- Convertible warrants of value not more than Rs 500 crore (Rs 5 billion)
- Optionally Fully Convertible Debentures (OFCDs) of value not more than Rs 180
crore (Rs 1.8 billion).
Siti Cable has a consolidated gross debt of Rs 1,208 crore (Rs 12.08 billion), while net debt is at Rs 1,093 crore (Rs 10.93 billion).
Siti Cable has outstanding advances amounting to Rs 73.32 crore (Rs 733.2 million) extended to two of its subsidiaries, including one wholly owned subsidiary, for acquisition of MSOs, direct points and technical upgrades 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.