BENGALURU: Hit by a double whammy–that of demonetisation and the implementation of the new goods and services tax (GST)–Indian media and entertainment (M&E) companies have been struggling to attain and/or maintain black in their financials. Direct to home or DTH was one of the components of the M&E industry that had slowly started reporting profits – operating or plain profits after tax. The Essel group’s DTH services company Dish TV India Ltd (DishTV) was one of the first companies from the Indian carriage industry that had started churning out profits until the aforementioned double whammy. Subscription collections were suddenly hit because people just didn’t have enough legal currency. Average revenue per user (ARPU) fell – last year in the quarter before demonetization, the company had reported ARPU of Rs 162. For the quarter ended 30 September 2017 (Q2-18, quarter under review), ARPU was Rs 149. In the immediate trailing quarter (Q1-18), ARPU was slightly lower at Rs 148.
Over the last few quarters post demonetisation, Dish TV’s net profits were in the red. However, during these quarters, operating profits (EBIDTA) were positive and that seems to have improved for the quarter under review as compared to the immediate trailing quarter (q-o-q, Q1-18). Year-over-year however, Dish TV has reported a net loss and lower operating profit for Q2-18 as compared to net profit and EBIDTA numbers of the corresponding year ago.
Dish TV reported 7.4 percent higher q-o-q EBIDTA for Q2-18 at Rs 2,160.8 million (28.9 percent margin - on operating revenue) as compared to Rs 2012.0 million (27.2 percent margin) for Q1-18. EBIDTA for Q2-17 was Rs 2,656.8 million (34.1 percent margin). The company’s net loss however widened q-o-q to Rs 178.7 million during the quarter under review as compared to a net loss of Rs 135.1 million in Q1-18 and a net profit after tax of Rs 689.6 million (8.8 percent margin) for Q2-17.
The silver lining for the company has been its growing subscriber base, and this despite lower ARPU has resulted in 1.3 percent q-o-q increase of operating revenue to Rs 7,585.80 million for Q2-18 as compared to Rs 7,388.8 in Q1-18. However, y-o-y operating revenue during the quarter under review was 3.9 percent lower as compared the Rs 7,792.8 million for Q2-17.
The company’s subscriber base has increased by 0.188 million subscribers during the quarter under review and it has reported a subscriber base of 15.9 million. The company had closed the corresponding year ago quarter with a subscriber base of 15.1 million – it had added 0.259 million subscribers in Q2-17. Consequently, Dish TV’s subscription revenue grew 1.9 percent q-o-q during the quarter under review to Rs 7,049 million. Year-on-year, subscription revenues were 3.3 percent lower than the Rs 7,288 million reported for Q2-17. Churn for Q2-18 was 0.8 percent
A look at the other numbers
Total expense in Q2-18 increased 6 percent y-o-y to Rs 7,834.7 million from Rs 7,393.1 million. Employee benefits expense was almost flat (declined 0.2 percent) y-o-y to Rs 366.3 million from Rs 367 million. Operating expenses in Q2-18 increased 6.6 percent y-o-y to Rs 3,893.4 million from Rs 3,651.9 million. Other expenses during the quarter under review declined 4.8 percent to Rs 1,038.0 million from Rs 1,090.8 million in Q2-17. Finance costs in Q2-18 increased 6.4 percent y-o-y to Rs 610.9 million from Rs 574.2 million.
Amalgamation of Videocon D2h into Dish TV
The proposed combination of Dish TV and Videocon d2h would create one of the world’s leading DTH platform.
Dish TV CMD Jawahar Goel said, “We have been eager to get back to our stakeholders with the news of the successful closure of the merger. With all other approvals in place, the only approval pending is from the Ministry of Information and Broadcasting. We are optimistic about hearing back from the MIB any moment now and hope to close the merger at the earliest thereafter.”
“We remain excited about the next phase of growth that the combined entity, Dish TV Videocon Limited, will go through and are committed to make the combination a mega success. On the synergy front, we stick to our guidance of Rs. 1,800 million for FY18 and Rs. 5,100 million for FY19,” he added.
