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Dish TV cuts net loss to Rs 304 million in Q1 FY14

Generates free cash flow of Rs 484 million; gears up to reduce Rs 7,500 million debt on the book

BestMediaInfo Bureau | Delhi | July 29, 2013

Dish TV India Ltd has reported first quarter fiscal 2014 standalone operating revenues of Rs 5,784 million, a growth of 11.2 per cent over the corresponding period last fiscal. EBITDA of Rs 1,217 million was marginally higher than in the previous quarter, and the margin for the quarter stood at 21 per cent. Net loss was down to Rs 304 million compared to Rs 323 million in the corresponding quarter last fiscal and Rs 436 million in the previous quarter.

Subhash Chandra, Chairman, Dish TV India, said, “In an ever changing world, the Indian media industry is keeping pace. Of late topics varying from television viewership ratings to the cap on advertisement and the limit on foreign direct investment have maintained the spotlight on the media industry. Digitisation, which happens to be the most talked about subject, has still a lot to achieve even in the digitised towns and cities. Though it is comforting to see the evolution towards a transparent distribution environment, the distribution industry needs to act fast to leverage the opportunity to weed out the long standing inefficiencies in the system.”

“Too much focus on box seeding has diluted the addressability part of the digitisation mandate. In such a scenario, Dish TV’s focus on quality additions is a counter-intuitive move which has started delivering encouraging results. The first quarter saw the company deliver strong free cash flows while maintaining healthy customer retention and investing in brand equity,” Chandra added.

Jawahar Goel, Managing Director, Dish TV, said, “In line with our expectations, pack price hikes and improved subscriber quality in the recent months resulted in a strengthened ARPU. ARPU for the quarter increased 5.1 per cent to Rs 165 resulting in a 15.9 per cent YoY increase in subscription revenues. The resultant free cash flow of Rs 484 million compares favourably with Rs 220 million in the fourth quarter and Rs 650 million for the whole of fiscal 2013.”

“On the expenses front, higher investment in marketing, brand building and seasonal sports driven content along with the impact of a weak rupee on dollar denominated costs, resulted in a sequentially flat EBITDA margin,” Goel added.

“We remain committed to add quality subscribers who would be value accretive to the business. Our successful initiation of a series of entry level price hikes, even in a not so perfect macro environment, demonstrate our pricing power and resolve to eliminate subsidies in the medium term. At the same time, we continue to expand our distribution network and consider ourselves amongst the best placed to reach out to customers who fit the bill. We are also making strong progress towards lining up additional transponder capacity to beef up our existing, industry leading bandwidth. We intend to leverage the additional capacity for distributing localised content as well as strengthen carriage revenues,” Goel said.

Commenting on the persistent weakness in the rupee and its impact on the financials, Mr. Goel said, “A flagging rupee has been an industry-wide concern for some time now. To contain further widening of gap between the cost of the consumer premises equipment (CPE) and amount realised from the customer due to rupee depreciation, Dish TV initiated an acquisition price hike of Rs 250 on July 4. Sensing the need, other players in the DTH industry followed suit within the next few days.”

Talking about Dish TV’s overseas ventures, Goel confirmed, “Work on Dish TV Lanka (Pvt.) Limited, a company subsidiary, is progressing as per plan. Since it is going to be a zero subsidy model, it makes us all the more excited about the expansion.”

The company is well positioned, through its internal accruals, to repay approximately Rs 7,500 million of outstanding debt through the current fiscal.

Dish TV added five new HD channels in April 2013, thus offering the highest number of 25 HD channels and 17 HD services on its platform.

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