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Videocon d2h posts net profit for full fiscal for first time, adds 1.05 mn subs

MUMBAI: Ahead of its merger with Dish TV, Videocon d2h has reported net profit for the full fiscal for the first time. The DTH arm of Videocon Group has also added 1.05 net subscribers in FY17, though at a slower pace than the earlier fiscal due to demonetisation of high-value currency notes in November.

Videocon d2h ended the fiscal with 12.91 million net subscribers compared to Dish TV’s base of 15.3 million. The combined strength of the merged entity would thus be a whopping 28.31 million net subscribers.

Videocon d2h posted net profit of Rs 30.4 crore in FY17 compared to a net loss of Rs 92.2 crore a year ago.

Adjusted EBITDA grew 27.1% to Rs 1,018 crore from Rs 801 crore a year ago. Adjusted EBITDA margin expanded 280 basis points on a like to like basis if the company was to compute its revenue from operations for FY17 under its former accounting treatment. Adjusted EBITDA margin was 33.1% during the year.

Revenue from operations grew 15.5% to Rs 3072 crore in FY17. Subscription and activation revenue came in at Rs 2808 crore.

Key metrics Fiscal 2017

The company 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, effective from 1 April 2016. Prior to 1 April 2016, entertainment tax was accounted for under operating expenses. Thus, operating revenue was presented without deduction of entertainment tax. The company’s financial and operating highlights for FY17 have been adjusted to reflect this change.

Subscriber growth in FY17

Videocon d2h added 1.05 million net subscribers during FY17 compared to 1.68 million a year ago. The company added 2.24 million gross subscribers in the fiscal as against 2.65 million in FY16.

Net subscribers totaled 12.91 million as of 31 March 2017.

Churn and subscriber acquisition cost in FY17

Monthly churn came in at 0.80% for the year as compared to a monthly churn of 0.73% in FY16.

Subscriber acquisition cost in the form of hardware subsidies stood at Rs 1,923 per subscriber during the fourth quarter of Fiscal 2017.

Financial Summary Q4 fy17

Performance in Q4 of FY17

  • Revenue from operations came in at INR 7.55 billion.
  • Subscription and activation revenue came in at INR 6.89 billion;
  • Adjusted EBITDA came in at INR 2.36 billion; Adjusted EBITDA margin came in at 31.3%;
  • Gross and net subscribers increased by 0.47 million and 0.14 million subscribers during the quarter, respectively.

Saurabh DhootCommenting on the results, Videocon d2h executive chairman Saurabh Dhoot said: “I am excited to share that Fiscal 2017 has been a yet another landmark year for Videocon d2h, as the company achieved net profit and free cash flow breakeven. The company reported 27.1% year on year growth in EBITDA, despite moderation due to Government of India’s demonetisation policy in November 2016, which also coincided with the seasonally stronger second half. More importantly, our adjusted EBITDA per subscriber per month grew a healthy 13.0% year on year to Rs 69. This clearly demonstrates the strength of our business and our ability to monetise the subscribers we added in Phase III and Phase IV digitisation markets.”

Regarding the merger, Dhoot added: “We have now received the necessary approvals from the equity shareholders of Videocon d2h and the Competition Commission of India. The company has started working on an integration plan and has appointed Price Waterhouse Coopers, Deloitte and Aon Hewitt to work on post-merger integration along with the management of Videocon d2h and Dish TV India.”

As of 31 March 2017, Videocon d2h’s term loans stood at Rs 1,995 crore and total cash and short term investments at Rs 461 crore.