DEN posts Rs 47 cr operating profit in Q1

MUMBAI: Cable TV and broadband service provider DEN Networks has posted a consolidated operating profit of Rs 47 crore for the quarter ended 30 June. In the sequential quarter, the company’s operating profit stood at Rs 59 crore. The FY19 Q1 consolidated EBITDA including associates was at Rs 57 crore.

The company’s revenue for the quarter was Rs 314 crore as against Rs 314 crore in the quarter ended 31 March. Cable subscription revenue stood at Rs 170 crore compared to Rs 175 crore in the sequential quarter. Broadband subscription revenue remained flat at Rs 16 crore. Placement revenue saw an uptick at Rs 85 crore from Rs 83 crore.

Expenditure for the quarter increased 4% to Rs 268 crore from Rs 257 crore a quarter ago. The content cost was up 6% at Rs 150 crore from Rs 142 crore. The company’s net loss for the quarter was Rs 28 crore compared to Rs 10 crore.

The company’s total billed customers for the quarter was 7.2 million a 3% drop from 7.4 million in the sequential quarter.

Blended average revenue per user (ARPU) for the quarter remained flat at Rs 79. The ARPU from the four digital addressable system (DAS) was Phase I (Rs 122), Phase II (Rs 93), and Phase III (Rs R67), and Phase IV (Rs 54).

The Cable EBITDA post activation was Rs 48 crore compared to Rs 59 crore in the previous quarter. The EBITDA including associates was at Rs 58 crore. Total income from cable business was flat at Rs 299 crore while costs increased 4% to Rs 251 crore. Net loss stood at Rs 19 crore as against Rs 2 crore.

The company’s broadband ARPU came in at Rs 552 compared to previous quarter’s Rs 565. The total homes passed increased 2% to 927,000 while broadband subscriber stood at 106,000.

As part of ambitious broadband roll-out in 100 cities, DEN has enabled broadband in 28 cities in Q1 FY19 garnering 8,424 subscribers at an ARPU of Rs 562. The average speed offered is 10-100 Mbps and the average data consumption is 64 GB.

Commenting on the results, DEN Networks CEO SN Sharma said, “Happy to share with you that we have already enabled 28 new cities out of the 100 cities fixed line broadband plan. Cable subscription rates have been increasing consistently year on year, further increases have been announced in July’ 18 to offset the impact of increased content costs. Also, the notification of TRAI order is expected to be a game changer for the industry.”

The Telecom Regulatory Authority of India (TRAI) has enforced the tariff order with effect from 3rd July to be implemented by 30th December after the Madras High Court has upheld the tariff order and the interconnection regulations in May 2018.

Star India has filed a Special Leave Petition in the Supreme court on 20th Jul, however, the apex court has refused to stay the order passed by the Madras High court. The next date of hearing is scheduled for 28 August.

The company believes that the tariff order will have huge upside Potential for the industry as content cost should become a pass through. With Tariff order coming in, the company believes that the relationship between MSOs and LCOs will further strengthen.

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