MUMBAI, January 30, 2017 /PRNewswire/ --
Adjusted
EBITDA[1] grew
33.2% year on year to
INR 2.67 billion
Net
subscriber[2] base stood
at 12.77 million
Videocon d2h Limited (NASDAQ: VDTH) ("Videocon d2h" or the
"Company") announced its financial results for the quarter ended
December 31, 2016. These results
reflect the Company's change in accounting treatment of
entertainment tax effective April 1,
2016.
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Highlights for the quarter ended
December 31,
2016:
- Revenue from operations came in at INR 7.77 billion. On a like
to like basis, revenue from operations would have been up 14.2%
year on year if the Company was to compute its revenue from
operations for Q3 FY17 under its former accounting
treatment[1].
- Subscription and activation revenue came in at INR 7.11
billion.
- Adjusted EBITDA grew 33.2% year on year to INR 2.67
billion.
- Adjusted EBITDA margin came in at 34.4%. On a like to like
basis, adjusted EBITDA margin would have been up 460 basis points
year on year if the Company was to compute its revenue from
operations for Q3 FY17 under its former accounting treatment*.
- Gross subscribers[3] and net subscribers
increased by 0.58 million and 0.25 million subscribers,
respectively, during the quarter; Net subscribers base stood at
12.77 million.
- Free cash flow[4] came in at INR 514
million.
Key metrics Q3 FY17
Gross subscriber additions (million) 0.58
Net subscriber additions (million) 0.25
Adjusted EBITDA (INR million) 2,672
Profit after tax (INR million) 218
Commenting on the results, Executive Chairman of Videocon d2h,
Mr. Saurabh Dhoot, said: "I am
delighted to report that we have delivered a strong quarter,
despite the moderation due to currency demonetization, which
temporarily affected consumer sentiments and consumption. Our
adjusted EBITDA grew over 33% year on year, which clearly
demonstrates the strength of our distribution and customer service
network and above all our team's strong execution. We are entering
2017 in a whole new mode and are excited about the business
fundamentals and growth opportunities supported by our healthy
balance sheet and growing free cash flows."
1. The Company adopted a change in the accounting treatment of
entertainment tax effective April 1,
2016. This change resulted in operating revenue being
presented net of entertainment tax, effective from April 1, 2016. Prior to April 1, 2016, entertainment tax was accounted
for under operating expenses, thus operating revenue was presented
without deduction of entertainment tax. For more information
regarding this change of accounting treatment, see the Company's
Form 6-K dated August 5, 2016. As a
result, the Company's financials and operating highlights for
periods after April 1, 2016 are not
comparable with its financials and operating highlights for periods
prior to April 1, 2016 due to this
change in accounting treatment of entertainment tax effective
April 1, 2016. Using the Company's
former accounting treatment of entertainment tax which the Company
applied prior to April 1, 2016,
revenue from operations would have been INR 8.35 billion and EBITDA
margin would have been 32.0% for Q3 FY17, respectively.
Speaking on the business outlook, Mr. Anil Khera, CEO of
Videocon d2h said "I am happy to share that the digitization
process has kick started once again as the Delhi High Court cleared
all stay orders and ordered switch off of analog signals in Phase
III digitization areas by January 31,
2017. We remain excited about the significant Phase IV
digitization opportunity, the new deadline for which is
March 31, 2017."
Financial Summary:
(In INR million, unless
otherwise indicated)
Q1 FY17
Financial highlights (Adjusted)[(1)] Q2 FY17[(1)] Q3 FY17[(1)]
Revenue from operations 7,633 7,762 7,774
Subscription and activation revenue 6,970 7,107 7,112
Adjusted EBITDA 2,519 2,625 2,672
Adjusted EBITDA margin (%) 33.0% 33.8% 34.4%
Profit after tax (loss) 27 148 218
Content cost (% of revenue) 38.7% 38.7% 39.6%
Adjusted EBITDA less capex 887 907 1,157
Q1 FY17
Operating highlights (Adjusted)[(1)] Q2 FY17[(1)] Q3 FY17[(1)]
Net subscribers (million) 12.29 12.52 12.77
ARPU[5] (INR) 211 209 205
Churn[6] per month (%) 0.49% 0.95% 0.87%
(1) The Company adopted a change in the accounting
treatment of entertainment tax effective April 1, 2016. This change resulted in operating
revenue being presented net of entertainment tax, effective from
April 1, 2016. The Company's
financial and operating highlights for Q1 FY17 have been adjusted
to reflect this change. Prior to April 1,
2016, entertainment tax was accounted for under operating
expenses, thus operating revenue was presented without deduction of
entertainment tax. For more information regarding this change of
accounting treatment, see the Company's Form 6-K dated August 5, 2016. As a result, the Company's
financial and operating highlights for periods after April 1, 2016 are not comparable with its
financial and operating highlights for periods prior to
April 1, 2016 due to this change in
accounting treatment of entertainment tax effective April 1, 2016.
During the quarter ended December 31,
2016, subscription and activation revenue came in at INR
7.11 billion. Revenue from operations came in at INR 7.77 billion.
On a like to like basis, using the Company's former accounting
treatment of entertainment tax which it applied prior to
April 1, 2016, and revenue from
operations for Q3 FY17 would have been INR 8.35 billion, which is
up 14.2% year on year.
Adjusted EBITDA grew 33.2% year on year to INR 2.67 billion.
Adjusted EBITDA margin came in at 34.4% during the quarter. On a
like to like basis, using the Company's former accounting treatment
of entertainment tax which it applied prior to April 1, 2016, EBITDA margin for Q3 FY17 would
have been 32.0%, which is up 460 basis points year on year. Content
cost came in at 39.6% of revenue.
The Company reported profit after tax of INR 218 million during
the quarter. This compares to a net loss of INR 220 million during
the third quarter of fiscal 2016.
The Company added 0.58 million gross subscribers and 0.25
million net subscribers during the third quarter of fiscal 2017.
Net subscribers totaled 12.77 million as of December 31, 2016. Churn came in at 0.87% per
month for the quarter.
ARPU came in at INR 205.
Subscriber acquisition costs in the form of hardware subsidies
were INR 1,924 per subscriber.
The Company had term loans of INR 18.29 billion and total cash
and short term investments of INR 3.82 billion as of December 31, 2016.
The Board of Directors of the Company, at their meeting held on
January 30, 2017, allotted 1,400,000
equity shares to Mr. Saurabh P Dhoot by way of sweat equity
pursuant to the terms of the Contribution Agreement dated
December 31, 2014, as amended from
time to time, between the Company and Silver Eagle Acquisition
Corp.
The Company previously announced that the Initial Performance
Hurdle had been achieved pursuant to a Form 6-K, which was filed on
July 22, 2015.
Conference Call: Dial-in Details
The results conference call time and details are provided
below.
Call #1 Call #2
Date Tuesday, January 31, 2017 Tuesday, January 31, 2017
Time 11:00 AM India time 07:30 PM India time
01:30 PM HK time 10:00 PM HK time
05:30 AM UK time 02:00 PM UK time
12.30 AM NYC time 09:00 AM NYC time
Dial in details
India +91 22 3960 0752/ 1 800 120 1221 +91 22 3960 0752/ 1 800 120 1221
Hong Kong 800 964 448 / +852 3018 6877 800 964 448 / +852 3018 6877
Singapore 800 101 2045 / +65 3157 5746 800 101 2045 / +65 3157 5746
USA 1866 746 2133 / +1 323 386 8721 1866 746 2133 / +1 323 386 8721
UK 0808 101 1573 / +44 20347 85524 0808 101 1573 / +44 20347 85524
Pin code Not required Not required
Playback details
India +91 22 3065 2322 / +91 22 6181 3322 +91 22 3065 2322 / +91 22 6181 3322
USA 1 855 4360 715 / 1 863 9490 105 1 855 4360 715 / 1 863 9490 105
Playback ID 76076 03597
Forward looking statements
This earnings release may contain forward-looking statements, as
defined in the safe harbor provisions of the US Private Securities
Litigation Reform Act of 1995. In addition to statements which are
forward-looking by reason of context, the words "may", "will",
"should", "expects", "plans", "intends", "anticipates", "believes",
"estimates", "predicts", "potential", or "continue" and similar
expressions identify forward-looking statements. We caution you
that reliance on any forward-looking statement involves risks and
uncertainties that might cause actual results to differ materially
from those expressed or implied by such statements. These and other
factors are more fully discussed in the Videocon d2h's registration
statement on Form F-4 filed with the SEC and available at
http://www.sec.gov. All information provided in this earnings
release is as of the date hereof, unless the context otherwise
requires. Other than as required by law, Videocon d2h does not
undertake to update any forward-looking statements or other
information in this earnings release.
Q3 FY17 financial
results are available on the SEC web
site and company web site
http://www.ir.videocond2h.com
1. The Company calculates EBITDA by calculating profit or loss
after tax as increased by income tax expense, net finance costs,
depreciation, amortization and impairment and reduced by other
income. Adjusted EBITDA is EBITDA adjusted for the recognition of
fair value of the Employee Stock Option Plan 2014 recognized as an
expense over the vesting period which amounted to INR 21.01 million
for the first, second and third quarters of fiscal year 2017,
respectively. Adjusted EBITDA presented in this earnings release is
a supplemental measure of performance and liquidity that is not
required by or represented in accordance with the IFRS.
Furthermore, Adjusted EBITDA is not a measure of financial
performance or liquidity under IFRS and should not be considered as
an alternative to profit after tax, operating income or other
income or any other performance measures derived in accordance with
the IFRS or as an alternative to cash flow from operating
activities or as a measure of liquidity. In addition, Adjusted
EBITDA is not a standardized term, hence direct comparison between
companies using the same term may not be possible. Other companies
may calculate Adjusted EBITDA differently from the Company,
limiting their usefulness as comparative measures. The Company
believes that Adjusted EBITDA helps identify underlying trends in
the Company's business that could otherwise be distorted by the
effect of the expenses that are excluded when calculating Adjusted
EBITDA. The Company believes that Adjusted EBITDA enhances the
overall understanding of its past performance and future prospects
and allows for greater visibility with respect to key metrics used
by its management in its financial and operational
decision-making.
2. Net subscriber means subscribers authorized to receive DTH
broadcasting services on account of payment of subscription charges
or any entry offer at the time of initial connection, as well as
subscribers who are temporarily disconnected due to non-payment of
subscription charges for a period not exceeding 120 days.
3. Gross subscribers means total registered subscribers.
4. The Company calculates free cash flow as Adjusted EBITDA less
capital expenditure and net interest expense, as increased by other
income. Free cash flow is not an IFRS measure and should not be
construed as an alternative to any IFRS measure such as cash flow
from operating activities. Free cash flow should not be considered
in isolation and is not a measure of the Company's financial
performance or liquidity under IFRS and should not be considered as
an alternative to cash flow from operating, investing or financing
activities or any other measure of its liquidity derived in
accordance with IFRS. Free cash flow does not necessarily indicate
whether cash flow will be sufficient or available for cash
requirements and may not be indicative of the Company's results of
operations. Free cash flow as defined herein may not be comparable
to other similarly titled measures used by other companies.
5. For Q1 FY17, Q2 FY17 and Q3 FY17, Average Revenue Per User
("ARPU") is calculated by dividing revenue from operations by the
average of the Company's net subscribers for the period. For prior
periods, ARPU was calculated by dividing the Company's subscription
and activation revenue by the average of its net subscribers for
the periods. Subscription and activation charges were considered on
a gross basis without netting off the recharge margins or discounts
provided to the distributors. As a result, ARPU for periods after
April 1, 2016 are not comparable with
ARPU for periods prior to April 1,
2016 due to this change in the Company's definition of ARPU
effective April 1, 2016.
6. Churn has been calculated as the number of subscribers who
have not made payment for at least 120 days and is the difference
between the number of gross subscribers and the number of net
subscribers.
SOURCE Videocon d2h