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UCN Cable’s revenue expected to improve in FY18

MUMBAI: Multi system operator (MSO) UCN Cable Network’s revenue is expected to rise in FY18 compared to the previous fiscal as the company booked revenue of Rs 75 crore in the first eight months (April-November) of the ongoing fiscal.

According to a report by a rating agency, UCN’s revenue to improve further post FY18, considering the company plans to increase its presence in the high definition (HD) segment further.

The plans would lead to a rise in average revenue per user (ARPU). The EBITDA margin in the medium term is expected to be in line with the FY17 level at about 18%, as the company plans to expand its scale of operations.

UCN’s revenue declined 14.45% YoY to Rs 91.33 crore in FY17 from Rs 106.7 crore in FY16 on account of a low subscriber base post digitisation.

Net income was down at Rs 41.5 lakh from Rs 3.3 crore. Operating EBITDA was at Rs 16.67 crore as against Rs 16.28 crore. EBITDA margin rose to 18.3% in FY17 from 15.2% in FY16, driven by a low operating cost.

UCN’s credit metrics are expected to remain strong in the medium term in view of rising EBITDA and the absence of any debt-funded capex plans.

Cash flow from operations was positive over FY15-FY17. The cash flow from operations is expected to remain positive in the medium term in view of a likely increase in EBITDA, as UCN plans to increase its presence in the HD segment.

UCN continues to have a small scale of operations, with a low subscriber base of 0.9 million. It has operations in Vidarbha and Madhya Pradesh.

After digitisation, the cable TV distribution industry has become organised. Cable operators face stiff competition from alternative TV distribution technologies, especially the rapidly growing direct-to-home service.