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Soccer, broadband weigh down DEN’s Q3 EBITDA by 99%

MUMBAI: Sameer Manchanda-promoted multi-system operator (MSO) DEN Networks’ consolidated EBITDA (before other income) for the fiscal third quarter dropped 99 per cent, courtesy of soccer and broadband business.

EBITDA in the quarter ended 31 December 2014 stood at Rs 0.3 crore (Rs 3 million), down from Rs 40.9 crore (Rs 409 million) in the trailing quarter.

EBITDA loss from soccer and broadband segments were at Rs 35.2 crore (Rs 352 million) and Rs 11.4 crore (Rs 114 million), respectively, during the quarter. In the second quarter, launch of broadband and soccer had impacted EBITDA by Rs 14.25 crore (Rs 142.5 million).

DEN’s operational revenue for the quarter was at Rs 268.8 crore (Rs 2.69 billion), compared to Rs 291.7 crore (Rs 2.92 billion) in the preceding quarter.

Consolidated net loss widened to Rs 62.6 crore (Rs 626 million). In the trailing quarter, net loss stood at Rs 20.4 crore (Rs 204 million). This is the second straight quarter of net loss for the company.

Cable business

In the cable business, DEN has suffered a net loss of Rs 11.8 crore (Rs 118 million), compared to a net loss of Rs 6.3 crore (Rs 63 million) in the second quarter of FY15.

Operational revenue for Q3FY15 was at Rs 256.6 crore (Rs 2.57 billion), compared to Rs 286.6 crore (Rs 2.87 billion) in the trailing quarter. However, the company said that for the quarter under review, the revenue is net of LCO share. For Q2, it was Rs 254.8 crore (Rs 2.55 billion).

Carriage revenue (placement fee) fell marginally to Rs 115.6 crore (Rs 1.16 billion) in Q3, compared to Rs 118 crore (Rs 1.18 billion) in the second quarter. However, it constituted 45 per cent of the MSO’s cable business revenue.

Subscription revenue also amounted to 45 per cent of the total revenue at Rs 115.7 crore (Rs 1.16 billion), compared to Rs 147 crore (Rs 1.47 billion) in the trailing quarter. However, in Q3 the company has given revenue net of LCO share.

Collection from digital activation totalled Rs 15 crore (Rs 150 million), slightly lower than Rs 16 crore (Rs 160 million) in the trailing quarter.

Operational EBITDA was at Rs 49.3 crore (Rs 493 million), down from Rs 54.2 crore (Rs 542 million) in Q2FY15.

The company said that its average billing per subscriber has increased in DAS areas and net cash realisation per subscriber per month has crossed Rs 100 in DAS I areas in Q3, compared to Rs 90 in Q2FY15.

It maintained content cost at Rs 110 crore (Rs 1.10 billion) and signed long-term deals with major broadcasters.

The company also added that the operating margin for Q3 was maintained at 19 per cent QoQ.

During the quarter under review, the company deployed 197,000 set-top boxes (STBs), taking the total number of STBs to 6.8 million. In the prior quarter, the MSO had deployed 220,000 STBs.

DEN’s gross secured debt stood at Rs 1,001 crore (Rs 10.01 billion), while total cash and cash equivalent was at Rs 957 crore (Rs 9.57 billion). Its consolidated net worth stood at Rs 1,732 crore (Rs 17.32 billion).

Broadband

During the quarter, the company soft-launched its high-speed broadband DEN Boomband. The company claims to have achieved a Home Pass in excess of 250,000 subscribers and got approximately 17,500 subscribers at weighted average ARPU of Rs 750 per month.

Net loss from the broadband business during the quarter was at Rs 13 crore (Rs 130 million), on a revenue of Rs 2.2 crore (Rs 22 million). Expenses were at Rs 13.6 crore (Rs 136 million), while operating loss was at Rs 11.4 crore (Rs 114 million).

Soccer business

DEN said that revenue from DEN Soccer was lower than anticipated as “sponsors chose to wait and watch” the extent of ISL’s (Indian Super League) popularity before committing larger ad spends.

Net loss from the business was at Rs 36.1 crore (Rs 361 million) on a revenue of Rs 8.1 crore (Rs 81 million). Expenses stood at Rs 43.3 crore (Rs 433 million), resulting in an operating loss of Rs 35.2 crore (Rs 352 million).

DEN Snapdeal JV

DEN has entered into a joint venture with Snapdeal.com and said that the channel has reached 19 million homes and clocked gross merchandise value (GMV) of over Rs 100 crore (Rs 1 billion) with “double-digit contribution margins”.

DEN’s net loss from the venture stood at Rs 1.8 crore (Rs 18 million) on a revenue of Rs 0.6 crore (Rs 6 million). Expense was at Rs 2.4 crore (Rs 24 million).