Dish TV India Limited (BSE: 532839, NSE: DISHTV, LSE: DTVL) today reported fourth quarter fiscal 2020 audited consolidated subscription revenues of Rs. 7,766 million and operating revenues of Rs. 8,691 million. EBITDA for the quarter stood at Rs. 5,432 million, up 30.9% Y-o-Y. EBITDA margin was at an all-time high of 62.5%.
With programming cost becoming a pass-through item in the new tariff regime, subscription and operating revenues for the quarter and fiscal are not comparable with the corresponding period last year.
4Q FY20 Highlights
- Operating revenues of Rs. 8,691 million
- Subscription revenues of Rs. 7,766 million
- EBITDA of Rs. 5,432 million
- Highest ever EBITDA margin of 62.5%
- Operating revenues of Rs. 35,563 million
- EBITDA of Rs. 21,060 million
- EBITDA margin at 59.2%
The Board of Directors in its meeting held today, has approved and taken on record the audited consolidated financial results of Dish TV India Limited and its subsidiaries for the quarter and year ended March 31, 2020.
The fourth quarter had started on a modest note for Dish TV India Limited with the focus being subscriber retention and addition of quality subscribers. As the country slipped into a COVID-19 induced lockdown, television became the default fallback option for the population including some of those who had been irregular in recharging their DTH connections. News channels, followed by movies and general entertainment channels notwithstanding the re-runs of old shows witnessed high time-spent by viewers. Dish TV India witnessed a surge in renewals and recharges with digital mediums constituting 76% of all subscriptions received by the Company.
Unified Payments Interface (UPI) and e-wallets became the preferred online, real-time payment modes over cash and physical outlets for subscribers recharging their DTH accounts. Increasing proportion of renewals through digital mediums should be the new normal in the post-COVID-19 world.
The indispensability of television as a source of information and entertainment never needed substantiation and the current circumstances have only reiterated that.
Mr. Anil Dua, Group CEO, Dish TV India Limited, said, “Though our revenues were positively impacted by the higher number of win backs and recharges during the initial days of the lockdown, we could not be complacent during such trying times and went all out to scan every cost-centre for greater operational efficiencies. Our all-time high EBITDA and EBITDA margin recorded during the quarter was a result of operational resilience demonstrated by the business.”
Customer First is one of the core values at Dish TV India Limited. The DTH service provider had been doing a risk assessment of the pandemic and had started developing applications to migrate the entire customer-care module to a work-from-home setup in case of an emergency. As the nationwide lockdown came into effect, Dish TV's call centre agents used their pre-equipped smart phones to continue to address customer concerns from their existing location. The in-house developed app not only helped the Company keep its customer service up and running but also kept contract workers productive despite many of them being away from the city.
Dish TV India's post-COVID operational plan incorporates the touchless way of getting new acquisitions, installations and service. Guidelines emphasizing home-delivery of consumer premises equipment, online recharge and a contactless service experience have been notified and put into practice. Amongst its business partners, majority of the distributor and dealer community is already active and in sync with the new protocols.
On the content front, the Company remains optimistic about a full-fledged and safe resumption of shooting of television episodes so that TV channels can start airing fresh episodes at the earliest.
Dish TV India's in-house OTT platform, Watcho, leveraged its inventory of indigenous web series to launch four brand new series and two non-fiction originals at a time when most platforms and channels were running re-plays. The OTT platform is focused on original, short-format content and non-fiction shows that young subscribers can easily connect with. From 1 million plus in January 2020, Watcho subscriptions reached 3 million plus by the end of the fourth quarter and then 5 million plus by the end of May 2020. The Company had recently expanded the footprint of Watcho on leading technology platforms like Amazon Fire TV Stick, Dish SMRT Hub and the Dish SMRT stick. Soon, the OTT platform would be releasing content in different Indian languages to reach out to subscribers who prefer content in their local language.
Dish TV India Limited has become the first private sector Company in India to start a Ku band teleport. The service would place the Company in a unique position to uplink niche channels in the Ku band. When fully commercialized, the facility would help distribution of such channels in a highly cost effective manner.
Operating revenues for the quarter were Rs. 8,691 million. EBITDA at Rs. 5,432 million was the highest during the fiscal and was up by 7.4% Q-o-Q and 30.9% Y-o-Y. EBITDA margin at 62.5% was at an all-time high.
The Goodwill acquired pursuant to merger of the Company with erstwhile Videocon d2H Limited is periodically tested for impairment to ensure that it is carried at no more than its recoverable amount. Impairment testing of goodwill allocated to the d2h cash generating unit (CGU) was performed at the balance sheet date and an impairment loss amounting to Rs. 19,155 million was recognised in respect of d2h CGU.
Profit before exceptional items and tax for FY20 was Rs. 1,281 million as against Rs. 268 million in FY19.
Dish TV India Limited paid balance of the overdue loan amount of Rs. 2,500 million during the quarter. The Company paid Rs. 4,459 million in total during the quarter thus reducing its overall debt to Rs. 18,175 million at the end of fiscal 2020 as compared to Rs. 27,695 million at the close of fiscal 2019.
The Telecom Regulatory Authority of India, on January 1, 2020, had notified The Tariff (Second Amendment) Order, 2020, commonly referred to as NTO 2.0 to come into force on March 1, 2020.
The Tariff Order is pending Appeals before certain High Courts and its implementation is dependent on the outcome of the said Appeals.
During the quarter, d2h launched its new range of connected devices – an internet enabled Android based HD set-top-box and a voice enabled stick with Alexa built-in.
The Android set-top-box named 'd2h Stream' is an internet enabled Android box that runs on the latest Android TV 9.0 OS by Google and is available at a price of Rs. 3,999 for new subscribers and Rs. 2,499 for existing subscribers. Apart from live TV channels, the box would offer access to the Google Play Store allowing the viewer to download and stream content from OTT platforms like Watcho, Amazon Prime Video, Zee5, You Tube and more.
The voice enabled kit with a dongle and remote powered by Amazon Alexa is priced at Rs. 1,199 and is available for select d2h subscribers. The kit allows users to access popular OTT apps and thousands of Alexa skills through their existing set-top-box.
Earlier, the Dish TV brand of the Company had launched the Smart Connected Devices comprising of the Dish SMRT Hub Android set-top-box and Dish SMRT Kit – a voice enabled dongle with an Amazon Alexa powered remote.
The Year Ahead
COVID-19 has been an unprecedented event causing high intensity damage to both households and businesses. Though the future course of the pandemic is unpredictable, services like television should remain relevant even during the short to medium term when the pandemic could be at its worst.
Average subscription ticket size and average revenue per user could remain on the lower side as consumers may want to be conservative due to the fragile environment.
However, limited propensity to spend could cause migration of subscribers from costlier mediums like IPTV to more pocket-friendly options like DTH and cable TV.
The reverse migration trend, of workers moving back to villages from metro cities, could be a double-edged sword.
Mr. Jawahar Goel, CMD, Dish TV India Limited, said, “Brands like Dish TV and d2h which have a strong rural connect could hope to get new connections and re-activations as value conscious subscribers reach hinterlands where, unlike cities, cable television may not be an option.”
“The other scenario could be that we may have to fight for subscriber share with free-to- air platforms. Another challenge could be in the form of rural unemployment where the consumer is unable to spend on entertainment even if he wants to. We expect rural recovery to be a tailwind in either scenario,” added Mr. Goel.
Complete absence of or limited sporting events due to the pandemic would also be something to watch out for the industry that generally sees a spike in recharges during the cricketing season.
With consumer sentiment remaining cautious and a not so robust macro economy even otherwise, all businesses including the television distribution industry would have to find new ways to attract and retain customer loyalty.
Dish TV India sees opportunity in this adversity and looks forward to leverage its pan-India reach, brand strength, OTT platform - Watcho and its execution by running a tight ship to build resilience and closer connect with consumers.
Report By: Surbhi Shukla