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Videocon d2h adds 0.25 mn subs in Q3, EBITDA up 33%

MUMBAI: Videocon d2h has seen net subscriber growth on a quarter-on-quarter (QoQ) basis despite moderation due to demonetisation of high-value currency notes while remaining profitable at the net level in the fiscal third quarter.

The company mopped up 0.25 million net subscribers in the quarter ended 31 December compared to 0.23 million in the trailing quarter. With this, net subscribers totaled 12.77 million.

Both Dish TV and Airtel Digital TV had seen the Q3 subscriber additions weaker than what they had reported in the preceding quarter. In the quarter ended 31 December, Dish TV added 204,000 subscribers compared to 249,000 in Q2. Airtel Digital TV’s net subscriber additions fell to 183,000 net subscribers from 256,000 in Q2.

EBITDA and net profit

Adjusted EBITDA grew 33.2% year-on- year (YoY) to Rs 267 crore. It was Rs 263 crore in the preceding quarter.

Adjusted EBITDA margin came in at 34.4% during the quarter. On a like to like basis, using the company’s former accounting treatment of entertainment tax which it applied prior to 1 April 2016, EBITDA margin for Q3 FY17 would have been 32.0%, which is up 460 basis points year on year.

Adjusted EBITDA margin came in at 33.8% during the quarter ended 30 September.

Net profit stood at Rs 21.8 crore compared to a net loss of Rs 22 crore a year ago. In the preceding quarter, net profit was at Rs 14.8 crore. Incidentally, this is the third straight quarter of net profit for Videocon d2h.

Videocon d2h Q3 fy17 Highlights for the quarter ended December 31, 2016

Saurabh DhootSaid Videocon d2h executive chairman Saurabh Dhoot, “We have delivered a strong quarter despite the moderation due to currency demonetisation, which temporarily affected consumer sentiments and consumption. Our adjusted EBITDA grew over 33% year on year, which clearly demonstrates the strength of our distribution and customer service network and above all our team’s strong execution. We are entering 2017 in a whole new mode and are excited about the business fundamentals and growth opportunities supported by our healthy balance sheet and growing free cash flows.”

During the quarter ended 31 December 31, subscription and activation revenue stood at Rs 711 crore. Revenue from operations came in at Rs 777 crore. On a like to like basis, using the company’s former accounting treatment of entertainment tax which it applied prior to 1 April 2016, and revenue from operations for Q3 FY17 would have been Rs 835 crore, which is up 14.2% YoY.

Videocon d2h said it adopted a change in the accounting treatment of entertainment tax effective 1 April 2016. This change resulted in operating revenue being presented net of entertainment tax. Earlier, entertainment tax was accounted for under operating expenses. Operating revenue was thus presented without deduction of entertainment tax. As a result, the company’s financials and operating highlights for periods after 1 April 2016 are not comparable with its financials and operating highlights for periods prior to that.

ARPU and churn

Average revenue per user (ARPU) fell to Rs 205 compared to Rs 209 in the preceding quarter.

Churn came in at 0.87% per month for the quarter ended 31 December. In the preceding quarter, churn was at 0.95% per month.

Content cost

Content cost came in at 39.6% of revenue, up from 38.7% a quarter ago.

Subscriber acquisition cost

Subscriber acquisition cost in the form of hardware subsidies stood at Rs 1,924 per subscriber. This was at Rs 1,869 per subscriber a quarter ago.

Videocon d2h Q3 fy17 Financial Summary

Debt

As of 31 December 2016, Videocon d2h had term loans of Rs 1829 crore and total cash and short term investments of Rs 382 crore.

Videocon d2h’s board, at their meeting held on 30 January, allotted 1.4 million equity shares to Saurabh P Dhoot by way of sweat equity. This is pursuant to the terms of the Contribution Agreement dated 31 December 2014, as amended from time to time, between the company and Silver Eagle Acquisition Corp.

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