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Tata Sky turns around, posts Rs 80 cr net profit in FY16
MUMBAI: Tata Sky has turned around in the fiscal ended 31 March 2016, posting a net profit of Rs 80.08 crore on a higher revenue base.
The direct-to-home (DTH) company, which is a joint venture between Tata Sons and Rupert Murdoch-controlled 21st Century Fox, had reported a net loss of Rs 267.27 crore a year ago. Tata Sky does not officially announce its financial performance as it is not a listed company.
While Dish TV was the first DTH company in India to turn profitable, Videocon d2h is on course to be net positive for the full period this fiscal. In the first three quarters of FY17, Videocon d2h, which is awaiting regulatory approval to merge with Dish TV, posted net profit.
Tata Sky’s total revenue climbed 20% to Rs 4,490.96 crore in FY16 compared to Rs 3,739.04 crore a year ago. Total revenue from operations grew to Rs 4,471.83 crore from Rs 3,723.04 crore.
The DTH company’s profit before depreciation, finance costs, tax and prior period items jumped 19.4% to Rs 1,106.35 crore compared to Rs 926.74 crore a year ago.
Total expenses stood at Rs 3,384.61 crore, up 20% from Rs 2,812.30 crore in the prior year.
Starting 1 April 2015, Tata Sky has changed the method of accounting in respect of certain discounts given to distributors and dealers. These discounts, which were earlier charged upfront to the statement of profit and loss, are now accounted at the time of rendering of services to customers. This resulted in a uniformity of accounting of various discounts. Due to the change, profit for the year ended 31 March 2016 is higher by Rs 121.03 crore.
Tata Sky’s net deficit in the statement of profit and loss stood at Rs 3,649.74 crore as of 31 March 2016. Accumulated loss was at Rs 3,729.82 crore as of 31 March 2015.
In line with market trends, Tata Sky revised its subscription price twice during the financial year under review. Average revenue per user (ARPU) expanded due to increased HD paying subscriber base and continued upselling of new products to existing subscribers. Five new interactive services—Actve Smart Manager, Actve Fitness, Tata Sky Dance Studio, Actve Devotion and Tata Sky Comedy—were launched during the year, which helped drive the revenue.
Tata Sky continued to migrate the MPEG-2 boxes into MPEG-4 in its attempt to offer more channels to its subscribers. All MPEG-2 boxes have already been converted as of 31 March 2016.
In FY15, Tata Sky had converted nearly 1.3 million MPEG-2 boxes into MPEG-4 so as to release additional capacity and offer more channels to its subscribers.
The company closed FY16 with a total offering of more than 500 channels, including 81 HD channels.
Continuing its focus in innovation, Tata Sky was the first to introduce the Transfer PVR Box. Push VOD was launched during the year under review which allowed subscribers to watch the content (already pushed and stored in the PVR box at the subscriber premises) without the need for Wi-Fi.
Meanwhile, the company renewed the appointment of Harit Nagpal as its managing director and CEO for five years with effect from 1 January 2016.
Tata Sky Ltd was incorporated in India on 9 January 2001 to provide DTH broadcasting services to TV viewers across the country. The company commenced its operations on 1 August 2006.