MSO KCCL FY19 net profit drops 36.1% to Rs 4.92 cr

MUMBAI: Cable and broadband service provider Kerala Communicators Cable Limited (KCCL) has posted a net profit of Rs 4.92 crore for the fiscal ended 31st March 2019 which is a decline of 36.1% compared to Rs 7.70 crore in the previous fiscal.

The Profit before interest, lease, depreciation, and tax (PBILDT) dropped by 8.42% to Rs 30.01 crore as against Rs 32.77 crore. The PBIDLT margin of KCCL dropped from 63.85% in FY18 to 21.57% in FY19.

Since Kerela became fully digitised, there has been a decline in the activation charges in the last two years. Further, post the revised regulations of TRAI, there has been a revision in revenue sharing between LCO and MSO as well as changes in the rates of most channels. The revenue sharing was revised to 85:15 when compared to 65:35 between LCO’s and MSO’s coupled with rate revision of channels had affected the profit margins of KCCL.

The scale of operations of the company witnessed a growth of 33% to Rs. 139 crore in FY19 against Rs. 104 crore in FY18. The subscription revenue grew by around 22% in FY19 vis-à-vis FY18 on account of the migration of subscribers from SD (Standard Definition) to HD (High Definition) channels. With a captive dealer network and subscriber base, KCCL offers broadband services at competitive rates, as it saves cost on marketing and distribution overheads.

KCCL has a presence in all the 14 districts of Kerala and as of March 2019 has more than 25 lakh net subscribers. Long established relationship with customers maintained by LCOs provides the company with a competitive edge over other players.

KCCL was promoted by the Cable Operators Association (COA) in Kerala which is a conglomeration of more than 4,000 independent local cable operators (LCOs) spread across all the 14 districts of Kerala. KCCL is a registered multi-system operator (MSO) offering digital cable services through the brand name ‘Kerala Vision Digital TV’ (KVDT). KCCL operates a Malayalam general entertainment channel ‘Kerala Vision’. The company also commenced broadband services from September 2016.

The company’s capital structure continued to remain comfortable with nil gearing as on 31st March 2019 with neither short-term nor long-term debt on a net worth base of Rs. 132.40 crore. The company’s liquidity profile was also comfortable with a current ratio of 1.05.

Liquidity is adequate marked by zero repayment obligations and a cash balance of Rs. 11.78 crore as on 31st March 2019. KCCL had unutilised CC lines, for 12 month period ended February 2020. KCCL procures set top boxes (STBs) from Logic Eastern and MyBox with an advance payment of 30% and 40% respectively. The balance payment is made in 11 installments.

The distributors/sub-distributors pay 10% advance to KCCL for the STBs. The balance is paid in about 6 installments. KCCL holds no inventory, as STBs are ordered based on requirements of the distributors, who pay the proportionate advance amount.

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