Ortel swings into profit in Q4

MUMBAI: After reporting loss for the third quarter, Ortel Communications has swung back into profit. The multi-system operator (MSO) has posted a net profit of Rs 8 million in the fiscal fourth quarter compared to a net loss of Rs 2.8 crore in the preceding quarter.

EBITDA for the quarter ended 31 March 2017 increased 3.7% to Rs 12.3 crore compared to Rs 11.8 crore in the preceding quarter. EBITDA margin stood at 25.4% from 22.8% a quarter ago.

Revenue from operations fell 9.9% to Rs 46.1 crore compared to Rs 51.2 crore. Total expenditure decreased 10.2% to Rs 35.9 crore from Rs 40 crore.

Programming cost increased 16% to Rs 10.7 crore from Rs 9.2 crore. The pay channel cost per customer increased to Rs 47.67 from Rs 41.81.

Cable TV revenue de-grew 9.2% to Rs 36.3 crore compared to the preceding quarter due to a drop in carriage revenue by 33.6% to Rs 5 crore. Cable subscription revenue fell 3.6% to Rs 28.9 crore.

Broadband revenue declined 17.9% to Rs 7.1 crore. Internet subscription fee fell 17.4% to Rs 7 crore.

Total cable TV universe comprised 750,471 subscribers while the broadband subscriber base was 73,087. In the previous quarter, the same was 738,963 and 72,503 respectively. Subscriber churn was 0.7% as opposed to 1% in previous quarter.

The company’s cable TV as well as broadband ARPU saw a decline for a second straight quarter. Cable TV ARPU was down to Rs 147 from Rs 150, while broadband ARPU was down to Rs 375 from Rs 394.

Ortel’s EBITDA from Odisha fell 45.5% to Rs 7.4 crore while revenue was down 13.6% to Rs 32.7 crore. From emerging markets (Chhattisgarh, Madhya Pradesh, Andhra Pradesh, Telangana and West Bengal), the EBITDA jumped 8.1 times to Rs 5.1 crore while revenue increased 4.1% to Rs 13.3 crore.

Ortel Q4 FY2017 Emerging Markets (Chhattisgarh, Madhya Pradesh, Andhra Pradesh, Telengana & West Bengal)
Full-fiscal performance

The company’s net profit for FY17 fell 88% to Rs 1.4 crore from Rs 11.9 crore a year ago.

EBITDA decreased 21.6% to Rs 55.1 crore compared to Rs 70.3 crore in the earlier year. EBITDA margin was 26.6% compared to 35.8%.

Revenue from operations grew 8.4% to Rs 20.34 crore while expenditure increased by 20.7% to Rs 15.21 crore.

Programming cost increased 2.5% to Rs 38.4 crore while pay channel cost per customer decreased to Rs 46.46 compared to Rs 56.82.

Cable TV revenue during the fiscal period jumped 22.3% to Rs 159.6 crore. Subscription fees increased 34.3% to Rs 116.2 crore while carriage fee declined 16.8% to Rs 29.6 crore. Broadband revenue increased 7.3% to Rs 35.3 crore. Subscription fee jumped 11.4% to Rs 33.8 crore.

Ortel Q4 FY2017 Segment-wise Revenue break-up
Total subscribers increased to 823,558 from 701,192. Cable subscribers increased from 628,710 to 750,471 while broadband subscriber base moved from 72,482 to 73,087.

Ortel Q4 FY2017 Key Operating HighlightsOrtel Q4 FY2017 Key Operating Highlights (Cont’d.)
EBITDA from the Odisha market saw a 28.7% decline to Rs 55.6 crore while revenue fell 7.9% to Rs 154.4 crore. Emerging market EBITDA turned positive at Rs 5.8 crore compared to negative EBITDA of Rs 5.7 crore. Revenue zoomed 150.7% to Rs 47.6 crore.

Ortel Q4 FY2017 Core Market (Odisha)

Odisha and emerging market closing subscriber base stood at 535,126 and 166,066 respectively.

Bibhu-Prasad-Rath-insideCommenting on the performance, Ortel Communications president & CEO Bibhu Prasad Rath said, “Second half of FY2017 has been a challenging period for the company with key operating parameters performing below our expectations. However, I am happy to share that we have reported some improvement during Q4, and the management’s thrust in the coming quarters will be to significantly enhance the overall operational performance.

“We have sustained the positive EBITDA momentum in the non-Odisha markets. As we consolidate our new subscriber base in relatively new states like Andhra and Telangana and improve key metrics, we hope to continue delivering similar results.

“We have consciously slowed inorganic acquisitions as we look to first demonstrate the strength of owning and controlling the ‘last mile’ from the existing subscriber base. So, on the back of our exceptional ‘last mile’ business model, we anticipate a marked improvement in financial and operational performance in FY18.”