IMCL FY19 net loss widens to Rs 318.4 cr; subscriber base crosses 5 mn mark

MUMBAI: Hinduja Ventures Ltd (HVL)-owned distribution platform operator (DPO) IndusInd Media and Communications Ltd’s (IMCL) consolidated net loss for fiscal 2019 has widened by 45% to Rs 318.4 crore from Rs 219.8 crore in the previous fiscal.

Revenue from operations grew 6.68% to Rs 630.8 crore compared to Rs 591.3 crore. Total income jumped 5.28% to Rs 653.3 crore compared to Rs 620.5 crore. Total expenses declined by 1.93% to Rs 1007.5 crore from Rs 1027.4 crore.

The company’s subscription revenue saw a 6.8% increase to Rs 396.9 crore from Rs 371.6 crore. Channel placement fees was up 22% at Rs 116.2 crore from Rs 95.3 crore. Income from installation charges grew 18.31% to Rs 113.8 crore compared to Rs 96.18 crore.

In terms of expenses, the pay channel cost increased 1.8% to Rs 456.5 crore from Rs 448.4 crore. Transponder charges dropped by 16.25% to Rs 23.28 crore from Rs 27.8 crore. Lease rental – duct stood at Rs 48.8 crore.

During the year under review, IMCL had posted a positive operating profit in the last quarter of the year. It recorded 10% growth in subscriber base over FY2018 to end the fiscal with 5.1 million subscribers. The company achieved a collection to billing ratio at 99.5% which is highest in the industry. IMCL expects to achieve a positive Profit after Tax for the year 2019-20.

It is the only DPO to have a dual delivery platform – digital cable through fiber and HITS (Headend in the Sky) through satellite. The HITS and digital cable services provided under NXT Digital and IN Digital brands. Its HITS services are connected to 1,500+ points-of-presence in India – covering 2,000+pin codes in the country.

“During the year gone by in 2018-19, the NXT Digital and IN Digital – distribution platforms of IMCL have taken giant strides not only in terms of the subscriber base but also in terms of its subscription revenue. While the subscription revenue grew by 11%, there was an increase in the subscriber base by 10% over FY 2018,” HVL chairman Ashok P Hinduja said.

He further stated, “IMCL along with its subsidiary companies have an active subscriber base of 5.1 million. This is expected to grow substantially in the coming years. With all these positive developments, IMCL is expected to return a positive Profit after Tax in the years ahead.”

The HVL chairman also said that the successful implementation of the New Tariff Order will lead to significant improvement of the performance in the media business segment, which is substantiated by the operating results of the quarter ending 31st March and will be maintained in future quarters.

The Board of Directors of the company at its meeting held on 12th August accorded in-principle approval for reorganisation of the Media and Communications undertaking of IMCL into HVL subject to all statutory/regulatory approvals and approval of the esteemed shareholders.

On completion of reorganisation, HVL will transit from a holding company to an operating Media Company, resulting in substantial value unlocking, Hinduja stated. “In view of the above, HVL’s name will be suitably changed to reflect the focus on the Media business,” he stated.

He also noted that the expansion of the business by leveraging technology and partnerships will be a key focus of the media business. Further, the company will give emphasis to debt reduction by dilution of its non-media investments with the aim of the Company becoming debt-free in the near future.

IMCL in the month of August 2018, came out with the issue of 608,22,070 equity shares on rights basis to its existing shareholders in the ratio of 5 shares for every 11 shares held i.e. (5:11) for debt repayments and funding for expansion plan of IMCL.

Subsequently, HVL had subscribed for 5,23,73,505 equity shares in various tranches. Post rights issue of IMCL, the company’s shareholding in IMCL stood at 77.55% of the enhanced paid-up equity capital of IMCL.