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Dish TV declares Q4FY21 results: Rising To The Challenges

Jul 02, 2021
Dish TV India Limited (BSE: 532839, NSE: DISHTV, LSE: DTVL) today reported fourth quarter fiscal 2021 audited consolidated subscription revenues of Rs. 6,852 million and operating revenues of Rs. 7,517 million. EBITDA for the quarter was Rs. 4,260 million. Net loss was Rs. 14,153 million as against a loss of Rs. 14,562 million in the same quarter last year.
 
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 ended March 31, 2021.

4Q FY21 Highlights

  • Operating revenues of Rs. 7,517 million
  • Subscription revenues of Rs. 6,852 million
  • EBITDA of Rs. 4,260 million

FY21 Highlights

  • Operating revenues of Rs. 32,494 million
  • Subscription revenues of Rs. 29,874 million
  • EBITDA of Rs. 20,170 million
  • EBITDA margin at 62.1% 

Profit before exceptional items and tax of Rs. 823 million

Rising to the Challenges

The tragic highs and deceptive lows of the pandemic kept businesses on the edge throughout FY21. Every activity that produced value was segregated into two – essential and non-essential. Those falling under essential were no-doubt better off, but lockdowns spared no one.

Large television distribution platforms like Dish TV India Limited, despite being an essential service, faced a pressing problem. The problem to keep running when everything else was shut. Fresh content from broadcasters, hardware import, local assembly lines, distributors, dealers, markets, call centres and all offices of the Company, everything was closed.

It was time for the Company to leverage its existing digital infrastructure and take it to the next level to keep going during the pandemic.
 
Mr. Anil Dua, Group CEO, Dish TV India Limited, said, “Dish TV India had been advancing its digital technology over the years but what the pandemic made us do was never really envisaged by anybody. The challenge was to do a fast track implementation of digital processes that may or may not have come to the drawing board even several years down the line. Effectively, the pandemic rushed the need to innovate. Be it Artificial Intelligence for resolving customer complaints, enabling work-from home for customer care agents and employees, developing set-top-boxes and other key accessories in India, moving trade partners to a fully digital recharge mode or upgrading our OTT platform, 'Watcho,' we rose to the challenges thrown by the trying year while touching new highs in EBITDA margins.”
 
The later part of the fourth quarter saw re-emergence of urban to rural migration, amongst migrant workers, due to spike in Covid infections in cities. As it is, sporadic lockdowns during the course of the year had left many in the aspiring class with reduced disposable incomes while taking a toll on overall consumer confidence. Subscriber churn, thus remained on the higher side during the quarter and full year.

The Company continued to utilize its internal cash flows for capital expenditure and debt repayments. Restricted capital expenditure limited new subscriber additions.
 
Overall, low subscriber additions and a high churn resulted in a net reduction in subscriber base.

Mr. Jawahar Goel, CMD, Dish TV India Limited, said, “Thanks to all the stakeholders of Dish TV, the Company has so far been able to rise to the challenges thrown by the pandemic. The year gone by was difficult but has left us stronger with all the innovations and process improvements in place. However, with continuing uncertainties, we maintain a cautious stand. A strong balance sheet boosts confidence in such tough times and our focus on paying down debt and other liabilities is in that direction only.”

On fresh Covid induced restrictions and their impact on the current fiscal, Mr. Anil Dua, said, “An increase in subscriber churn, possibly to free to air platforms, due to continuing economic hardship amongst the vulnerable sections of the population cannot be ruled out. We however remain optimistic about the virtually perpetual relevance of television and believe that a revival in discretionary spending, due to economic activity normalizing going forward, will improve business revenues.”

Financials
 
Operating revenues for the quarter and full year were Rs. 7,517 million and Rs. 32,494 million respectively. Corresponding EBITDA was Rs. 4,260 million and Rs. 20,170 million. EBITDA margin for the quarter and full year was at 56.7% and 62.1% respectively. Profit before exceptional items and tax for the quarter and full year was Rs. (1,993) million and Rs. 823 million respectively.

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. 5,790 million was recognised in respect of d2h CGU. In addition an impairment loss of Rs. 2,008 million was recognized on Trademark/Brand.
  
Net loss for the quarter and full year was Rs. 14,153 million and Rs. 11,899 million respectively.
 
The Company paid upwards of Rs. 2,130 million towards debt during the quarter thus reducing its overall leverage to Rs. 8,099 million at the end of fiscal 2021 as compared to Rs. 18,175 million at the close of fiscal 2020.

'Watcho' – Keeping Pace with Tomorrow

Content streaming on OTT platforms, to quiet an extent, has become a staple along with television viewing in most urban and upper tier homes. Dish TV India's home grown OTT platform – 'Watcho,' has helped the Company strengthen its bond with the millennials in such homes. The platform, unlike other OTT's, focuses on short format content and has been steadily building a niche for itself.
 
'Watcho,' has seen tremendous growth in its viewers since the beginning of the pandemic last year and has emerged as a fresh new platform for them.

Available across screens - Android and iOS devices, Dish SMRT devices, d2h Magic devices, Fire TV stick and on its dedicated website, 'Watcho' provides over 50 original shows and more than 800 hours of engaging content across diverse genres and in multiple Indian languages. It is a unique platform that not only enables consumption of content but also Live TV for Dish TV and d2h subscribers. The platform recently launched a user generated content offering called 'Watcho Swag' that provides a platform for content creation, learning and showcasing talent.
 
Early during the quarter, 'Watcho' crossed the milestone of 15 million user base. Soon thereafter, on April 7, 2021, 'Watcho' crossed yet another landmark of 25 million viewers.

The platform witnessed an explosive growth, recording 25 million plus viewers from just over 1 million users in January 2020.

Speaking on the achievement, Mr. Anil Dua, said, “We are thrilled to achieve the 25 million milestone in such a short span of time. At Dish TV India, it has always been our endeavor to meet the entertainment needs of all our subscribers all the time. 'Watcho,' is a step in that direction and delivers a seamless, streaming entertainment experience to viewers through future ready technology and diverse content.”
   
Looking Back – Notification of New DTH Guidelines

The year saw the long pending matter on the renewal/issue of license to Dish TV India Limited for providing Direct-to-Home (DTH) broadcasting services in India getting resolved.

The Union Cabinet on December 23, 2020 had approved the proposal for revision of the guidelines for obtaining license for providing DTH broadcasting services in India.
 
Dish TV India Limited received the in principle approval of the Ministry of Information and Broadcasting, for grant of provisional license for providing DTH broadcasting services in India, with effect from April 1, 2021 for a period of 20 years.

Dish TV India's DTH license was valid up to December 31, 2019, and the Company had duly filed the requisite applications for extension of the DTH license. Subsequently, on June 25, 2020, the Company had received interim extension of the DTH license from the Ministry with a validity till March 31, 2021, or till the date of notification of 'New DTH guidelines,' whichever is earlier.

The revised guidelines, amongst other features, provide for the issue of a DTH license for a period of 20 years as against the present 10 years. Further, the license period may be renewed by 10 years at a time. The Cabinet revised the license fees from 10% of Gross Revenues (GR) to 8% of Adjusted Gross Revenues (AGR) with AGR being calculated by deduction of Goods and Services Tax from GR. Further, license fee will be collected on a quarterly basis in lieu of the present annual basis. Also, the cap of 49% Foreign Direct Investment (FDI) in the existing DTH guidelines shall be aligned with the extant Government policy on FDI (100%).

Fund Raising

Keeping in mind the requirement for funds in the Company the Board of Directors of Dish TV India Limited, on February 17, 2021, had considered and approved a proposal for raising of funds.
 
The Board had considered various options for fund raising and had granted in principal approval to explore and initiate the process of fund-raising through permissible modes and issue of permissible securities, for an amount up to Rs. 1,000 crores, in one or more tranches, in accordance with applicable laws.
 
The Board had constituted a 'Fund Raising Committee' for recommending, taking actions and monitoring in the matters of raising funds and related matters thereof.

The 'Fund Raising Committee,' constituted by the Board, had been actively working and evaluating different modes of fund raising since then.

The Board of Directors of the Company at their meeting held on June 21, 2021 considered the recommendations of the 'Fund Raising Committee' and subject to receipt of necessary approvals, approved the fund raising of up to Rs. 1,000 crores through Rights Issue of equity shares.

Further, the Board authorized the 'Fund Raising Committee' to proceed with Rights Issue forthwith, and decide the other terms and conditions of the Rights Issue including setting the record date, appointment of intermediaries as may be required, finalization of the Letter of Offer and other related matters.

Report By: Surbhi Shukla
 
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