ITV

Category: Financials

  • Q3-2016: Godrej Consumer Products marketing spend up 15%

    Q3-2016: Godrej Consumer Products marketing spend up 15%

    BENGALURU: Godrej Consumer Products Limited (GCPL) reported 15.1 per cent year-on-year (YoY) growth in advertisement and publicity expenses (Ad, marketing) in Q3-2016 (quarter ended 31 December, 2015, current quarter) at Rs 250.69 crore (10.6 per cent of net Total Income from Operations or TIO) as compared to Rs 217.89 crore (9.7 per cent of TIO), but 1.3 per cent lower quarter-on-quarter (QoQ) than Rs 253.99 crore (11.3 per cent of TIO).

    Note: 100,00,000 = 100 lakhs = 10 million = 1 crore

    Godrej group chairman Adi Godrej said, “In a challenging operating environment, we have delivered a resilient and competitive performance in Q3-2016. Our consolidated organic constant currency sales growth of nine per cent and EBITDA growth of 19 per cent are well ahead of the market growth. Our India business sustained its volume growth leadership with a growth of nine per cent. Our international business too delivered healthy performance, with an organic constant currency sales growth of nine per cent. Operating earnings growth was ahead of sales growth across most of our geographies, aided by lower commodity costs, calibrated price hikes, stringent cost management and the effective leveraging of brand platforms.”

    “While the pace of economic recovery is slower than anticipated, we are hopeful of continuing our relative outperformance in the quarters ahead. Over the next few quarters, we will be introducing several exciting new launches to stimulate demand and extend leadership in our core categories. We are also enhancing our go-to-market infrastructure and investing strategically for the future. Overall, we expect our focus on innovation, distribution initiatives and superior on-ground execution to aid growth ahead of the market. The medium and long-term growth prospects in India and our other emerging markets remain robust. We believe that there is still a lot of headroom for growth across these markets, given the low penetration and consumption rates in our core categories. I am confident that with our clear strategic focus, differentiated product portfolio, superior execution and top-notch team, we will continue to deliver industry-leading results in the future,” concluded Godrej.

    Trends

    Please refer to Fig A below. GCPL’s Q2-2016 ad spends mentioned above were the highest in absolute rupees during the 15 quarter period starting Q1-2013 until Q3-2016 in this report. Its highest ad spend in terms of percentage of TIO was in Q1-2014 at 13.8 per cent (Rs 239.06 crore). During the period under consideration in this report, its lowest ad spends both in absolute rupees and in terms of percentage of TIO was in Q2-2014 at Rs 145.78 crore and 7.5 per cent. It must be noted that in the nine month period ended 31 December, 2016 (9M-2016), the company has spent Rs 755.80 crore towards marketing expenses as compared to Rs 679.78 crore in 9M-2015, Rs 687.19 crore in 9M-2014 and Rs 486.09 crore in 9M-2013.

    During the period under consideration in this report, ad spends in terms of absolute rupees and percentage of TIO shows a linear increasing trend as indicated by the broken blue and maroon trend lines in Fig A below.

    GCPL reported 5.4 per cent YoY growth in TIO in Q3-2016 at Rs 2,356.15 crore as compared to Rs 2,235.71 core and five per cent higher QoQ as compared to Rs 2,244.94 crore. During the 15 quarter period under consideration in this report, TIO shows a linear increasing trend as indicated by the broken green trend line.

    Profit after tax (PAT) in Q3-2016 at Rs 322.95 crore (13.7 per cent margin) was 22.5 per cent higher YoY as compared to 263.57 crore (11.8 per cent margin) and 12.5 per cent higher QoQ as compared to Rs 287.16 crore (12.8 per cent margin). During the 15 quarter period in this report, PAT shows a linear increasing trend both in terms of absolute rupees and percentage of TIO as in obvious from the broken red and black trend lines in Fig B below.

    Category review by GPCL

    Household Insecticides

    Household Insecticides sustained its double-digit volume growth momentum with a sales growth of 15 per cent. The company attributes growth to the success of its new launches, effective communication and superior on-ground execution. GCPL says that it has consistently gained market share across formats and ended the quarter with its highest ever market share. Good Knight continues to lead category penetration and drive market development initiatives

    Soaps

    GCPL’s Soaps business maintained its robust mid-single digit volume growth in a highly competitive environment. This was offset by deflationary pressures, resulting in a value growth of two per cent. As part of its focus to premiumise its portfolio, GPCL launched Godrej No. 1 Nature Soft – Glycerin & Honey variant in the winter soap space. It says that its premium soap brand Cinthol continues to lead volume and value growth. GPCL claims that it remains competitive on sales promotion investments, in a low commodity cost environment.

    Hair Colours

    The sales of Hair Colours declined by one per cent in Q3-2016. While Godrej Expert Rich Crème recorded a growth in the high teens, powder hair colour growth declined due to channel de-stocking. This was caused by up-stocking towards the end of the previous quarter, ahead of price hikes and a decline in value growth due to price-off trade offers. Godrej Expert Rich Crème continues to gain market share and lead distribution reach and household penetration in the crème category. GCPL introduced Godrej Expert Rich Crème in a multi-application pack priced at Rs 120 and also launched a new advertisement campaign.

    Liquid Detergents

    Liquid Detergents delivered a double-digit, volume driven sales growth of 11 per cent, despite the late onset of the winter. During the quarter, GCPL restaged our Ezee brand with a newly designed bottle. New insight driven communication was also launched to drive brand relevance and penetration.

    Air Fresheners

    Godrej Aer continues to perform well, aided by innovative product offerings and various consumer engagement initiatives. GPCL says that it has continued to gain market share and Aer is now the number one player in the home sprays air care market (on an exit market share basis). It recently launched Aer pocket, which targets the bathroom air care segment.

    Health and Wellness

    The company says that its Health and Wellness portfolio of hand washes and hand sanitiser, under Godrej Protekt, has been successfully introduced in the general trade. The initial response has been encouraging.

    Premium Hair Care

    BBLUNT, GCPL’s range of premium hair care products, has been launched in modern trade and premium general trade outlets.

  • Q3-2016: Godrej Consumer Products marketing spend up 15%

    Q3-2016: Godrej Consumer Products marketing spend up 15%

    BENGALURU: Godrej Consumer Products Limited (GCPL) reported 15.1 per cent year-on-year (YoY) growth in advertisement and publicity expenses (Ad, marketing) in Q3-2016 (quarter ended 31 December, 2015, current quarter) at Rs 250.69 crore (10.6 per cent of net Total Income from Operations or TIO) as compared to Rs 217.89 crore (9.7 per cent of TIO), but 1.3 per cent lower quarter-on-quarter (QoQ) than Rs 253.99 crore (11.3 per cent of TIO).

    Note: 100,00,000 = 100 lakhs = 10 million = 1 crore

    Godrej group chairman Adi Godrej said, “In a challenging operating environment, we have delivered a resilient and competitive performance in Q3-2016. Our consolidated organic constant currency sales growth of nine per cent and EBITDA growth of 19 per cent are well ahead of the market growth. Our India business sustained its volume growth leadership with a growth of nine per cent. Our international business too delivered healthy performance, with an organic constant currency sales growth of nine per cent. Operating earnings growth was ahead of sales growth across most of our geographies, aided by lower commodity costs, calibrated price hikes, stringent cost management and the effective leveraging of brand platforms.”

    “While the pace of economic recovery is slower than anticipated, we are hopeful of continuing our relative outperformance in the quarters ahead. Over the next few quarters, we will be introducing several exciting new launches to stimulate demand and extend leadership in our core categories. We are also enhancing our go-to-market infrastructure and investing strategically for the future. Overall, we expect our focus on innovation, distribution initiatives and superior on-ground execution to aid growth ahead of the market. The medium and long-term growth prospects in India and our other emerging markets remain robust. We believe that there is still a lot of headroom for growth across these markets, given the low penetration and consumption rates in our core categories. I am confident that with our clear strategic focus, differentiated product portfolio, superior execution and top-notch team, we will continue to deliver industry-leading results in the future,” concluded Godrej.

    Trends

    Please refer to Fig A below. GCPL’s Q2-2016 ad spends mentioned above were the highest in absolute rupees during the 15 quarter period starting Q1-2013 until Q3-2016 in this report. Its highest ad spend in terms of percentage of TIO was in Q1-2014 at 13.8 per cent (Rs 239.06 crore). During the period under consideration in this report, its lowest ad spends both in absolute rupees and in terms of percentage of TIO was in Q2-2014 at Rs 145.78 crore and 7.5 per cent. It must be noted that in the nine month period ended 31 December, 2016 (9M-2016), the company has spent Rs 755.80 crore towards marketing expenses as compared to Rs 679.78 crore in 9M-2015, Rs 687.19 crore in 9M-2014 and Rs 486.09 crore in 9M-2013.

    During the period under consideration in this report, ad spends in terms of absolute rupees and percentage of TIO shows a linear increasing trend as indicated by the broken blue and maroon trend lines in Fig A below.

    GCPL reported 5.4 per cent YoY growth in TIO in Q3-2016 at Rs 2,356.15 crore as compared to Rs 2,235.71 core and five per cent higher QoQ as compared to Rs 2,244.94 crore. During the 15 quarter period under consideration in this report, TIO shows a linear increasing trend as indicated by the broken green trend line.

    Profit after tax (PAT) in Q3-2016 at Rs 322.95 crore (13.7 per cent margin) was 22.5 per cent higher YoY as compared to 263.57 crore (11.8 per cent margin) and 12.5 per cent higher QoQ as compared to Rs 287.16 crore (12.8 per cent margin). During the 15 quarter period in this report, PAT shows a linear increasing trend both in terms of absolute rupees and percentage of TIO as in obvious from the broken red and black trend lines in Fig B below.

    Category review by GPCL

    Household Insecticides

    Household Insecticides sustained its double-digit volume growth momentum with a sales growth of 15 per cent. The company attributes growth to the success of its new launches, effective communication and superior on-ground execution. GCPL says that it has consistently gained market share across formats and ended the quarter with its highest ever market share. Good Knight continues to lead category penetration and drive market development initiatives

    Soaps

    GCPL’s Soaps business maintained its robust mid-single digit volume growth in a highly competitive environment. This was offset by deflationary pressures, resulting in a value growth of two per cent. As part of its focus to premiumise its portfolio, GPCL launched Godrej No. 1 Nature Soft – Glycerin & Honey variant in the winter soap space. It says that its premium soap brand Cinthol continues to lead volume and value growth. GPCL claims that it remains competitive on sales promotion investments, in a low commodity cost environment.

    Hair Colours

    The sales of Hair Colours declined by one per cent in Q3-2016. While Godrej Expert Rich Crème recorded a growth in the high teens, powder hair colour growth declined due to channel de-stocking. This was caused by up-stocking towards the end of the previous quarter, ahead of price hikes and a decline in value growth due to price-off trade offers. Godrej Expert Rich Crème continues to gain market share and lead distribution reach and household penetration in the crème category. GCPL introduced Godrej Expert Rich Crème in a multi-application pack priced at Rs 120 and also launched a new advertisement campaign.

    Liquid Detergents

    Liquid Detergents delivered a double-digit, volume driven sales growth of 11 per cent, despite the late onset of the winter. During the quarter, GCPL restaged our Ezee brand with a newly designed bottle. New insight driven communication was also launched to drive brand relevance and penetration.

    Air Fresheners

    Godrej Aer continues to perform well, aided by innovative product offerings and various consumer engagement initiatives. GPCL says that it has continued to gain market share and Aer is now the number one player in the home sprays air care market (on an exit market share basis). It recently launched Aer pocket, which targets the bathroom air care segment.

    Health and Wellness

    The company says that its Health and Wellness portfolio of hand washes and hand sanitiser, under Godrej Protekt, has been successfully introduced in the general trade. The initial response has been encouraging.

    Premium Hair Care

    BBLUNT, GCPL’s range of premium hair care products, has been launched in modern trade and premium general trade outlets.

  • Q3-2016: B.A.G. Films revenue up 12.5%

    Q3-2016: B.A.G. Films revenue up 12.5%

    BENGALURU: B A G Films and Media Limited (BAG Films) reported 12.5 per cent higher quarter-on-quarter (QoQ) revenue (net Total Income from Operations, TIO) for the quarter ended 31 December, 2016 (Q3-2016, current quarter) at Rs 28.07 crore as compared to Rs 24.95 crore. Year-on year (YoY) TIO in the current quarter however declined 8.6 per cent from Rs 30.70 crore.

    Note: 100,00,000 = 100 lakh = 10 million = 1 crore

    BAG Films reported Profit after Tax (PAT) for the current quarter at Rs 0.48 crore (1.7 per cent margin) as compared to a loss of Rs 3.66 crore in the immediate trailing quarter and more than double YoY profit as compared to Rs 0.22 crore (0.7 per cent margin) in Q3-2015. EBIDTA in the current quarter at Rs 8.97 crore (31.9 per cent margin) was more than double (2.3 times) the Rs 3.93 crore (15.8 per cent margin) in Q2-2016 and 10.4 per cent more than the Rs 8.12 crore (26.4 per cent margin) in the corresponding prior year quarter.

    BAG Films major segment, Television Broadcasting (TV segment) reported four per cent QoQ growth in segment revenue at Rs 22.53 crore (80.3 per cent of TI) as compared to Rs 21.66 crore (86.8 per cent of TIO), but a 6.5 per cent YoY revenue decline from Rs 24.08 crore (82.8 per cent of TIO).

    BAG Films TV segment reported 45.9 per cent QoQ growth in operating profit at Rs 7.40 crore as compared to Rs 5.07 crore, but a 20.5 per cent YoY drop in operating profit as compared to the Rs 59.30 crore.

    Its other major segment, FM Radio (Radio Dhamaal) reported 1.8 per cent QoQ drop in operating revenue growth at Rs 2.18 crore (7.8 per cent of TIO) as compared to Rs 2.22 crore (8.9 per cent of TIO) and 10 per cent YoY decline in revenue as compared to Rs 2.43 crore (7.9 per cent of TIO).

    Operating profit in Q3-2016 was less than a third (down 68.1 per cent) QoQ at Rs 0.23 crore as compared to Rs 0.73 crore and less than a fourth (down 75.5 per cent) YoY as compared to Rs 0.94 crore in Q2-2015.

    Let us look at the other numbers reported by B. A. G. Films:

    B. A. G. Films total expenditure in the current quarter at Rs 23.12 crore (82.4 per cent of TIO) was 6.1 per cent lower QoQ than Rs 24.62 crore (98.7 per cent of TIO) and was 12.4 per cent lower than the Rs 26.40 crore (98.4 per cent of TIO), but increased four per cent YoY from Rs 23.67 crore (86 per cent of TIO).

    Employee Cost in Q3-2016 at Rs 5.03 crore (17.9 per cent of TIO) was 4.3 per cent higher QoQ than Rs 4.82 crore (19.3 per cent of TIO) and almost flat YoY (increased 0.1 per cent higher) that Rs 5.02 crore (17.1 per cent of TIO).

    Segment Numbers

    The company has mentioned five segments in its financial results. They are Audio-Visual Production (AVP); Movies: Leasing; FM Radio; and Television Broadcasting. While B.A.G. Films Movies segment made no contribution to the company’s revenue or operating results in the current quarter, Q2-2015 or Q2-2016, FM Radio and TV Broadcasting segment numbers have already been mentioned above.

    Audio Visual Production segment (AVP segment)

    AVP segment reported a more than triple (3.3 times) revenue in Q3-2016 at Rs 3.29 crore as compared to Rs 1 crore in Q2-2016, but a 17.6 per cent YoY decline as compared to the Rs 4 crore in Q3-2015. The segment reported an operating profit in Q3-2016 of Rs 1.72 crore as compared to a loss of Rs 0.66 crore in the previous quarter, but a 15.2 per cent YoY decline as compared to an operating profit of Rs 2.03 crore in Q3-2015.

    Leasing segment (The numbers for this segment are mentioned in lakh – 100 lakh = 1 crore)

    BAG Films leasing segment reported revenue of just Rs 6.4 lakh in the current quarter as compared to Rs 6.95 lakh in the previous quarter and Rs 19.8 lakh in Q3-2015. The segment reported an operating loss of Rs 110.23 lakh as compared to an operating loss of Rs 82.63 lakh in Q2-2016 and an operating loss of Rs 83.46 lakh in Q3-2015.

  • Q3-2016: B.A.G. Films revenue up 12.5%

    Q3-2016: B.A.G. Films revenue up 12.5%

    BENGALURU: B A G Films and Media Limited (BAG Films) reported 12.5 per cent higher quarter-on-quarter (QoQ) revenue (net Total Income from Operations, TIO) for the quarter ended 31 December, 2016 (Q3-2016, current quarter) at Rs 28.07 crore as compared to Rs 24.95 crore. Year-on year (YoY) TIO in the current quarter however declined 8.6 per cent from Rs 30.70 crore.

    Note: 100,00,000 = 100 lakh = 10 million = 1 crore

    BAG Films reported Profit after Tax (PAT) for the current quarter at Rs 0.48 crore (1.7 per cent margin) as compared to a loss of Rs 3.66 crore in the immediate trailing quarter and more than double YoY profit as compared to Rs 0.22 crore (0.7 per cent margin) in Q3-2015. EBIDTA in the current quarter at Rs 8.97 crore (31.9 per cent margin) was more than double (2.3 times) the Rs 3.93 crore (15.8 per cent margin) in Q2-2016 and 10.4 per cent more than the Rs 8.12 crore (26.4 per cent margin) in the corresponding prior year quarter.

    BAG Films major segment, Television Broadcasting (TV segment) reported four per cent QoQ growth in segment revenue at Rs 22.53 crore (80.3 per cent of TI) as compared to Rs 21.66 crore (86.8 per cent of TIO), but a 6.5 per cent YoY revenue decline from Rs 24.08 crore (82.8 per cent of TIO).

    BAG Films TV segment reported 45.9 per cent QoQ growth in operating profit at Rs 7.40 crore as compared to Rs 5.07 crore, but a 20.5 per cent YoY drop in operating profit as compared to the Rs 59.30 crore.

    Its other major segment, FM Radio (Radio Dhamaal) reported 1.8 per cent QoQ drop in operating revenue growth at Rs 2.18 crore (7.8 per cent of TIO) as compared to Rs 2.22 crore (8.9 per cent of TIO) and 10 per cent YoY decline in revenue as compared to Rs 2.43 crore (7.9 per cent of TIO).

    Operating profit in Q3-2016 was less than a third (down 68.1 per cent) QoQ at Rs 0.23 crore as compared to Rs 0.73 crore and less than a fourth (down 75.5 per cent) YoY as compared to Rs 0.94 crore in Q2-2015.

    Let us look at the other numbers reported by B. A. G. Films:

    B. A. G. Films total expenditure in the current quarter at Rs 23.12 crore (82.4 per cent of TIO) was 6.1 per cent lower QoQ than Rs 24.62 crore (98.7 per cent of TIO) and was 12.4 per cent lower than the Rs 26.40 crore (98.4 per cent of TIO), but increased four per cent YoY from Rs 23.67 crore (86 per cent of TIO).

    Employee Cost in Q3-2016 at Rs 5.03 crore (17.9 per cent of TIO) was 4.3 per cent higher QoQ than Rs 4.82 crore (19.3 per cent of TIO) and almost flat YoY (increased 0.1 per cent higher) that Rs 5.02 crore (17.1 per cent of TIO).

    Segment Numbers

    The company has mentioned five segments in its financial results. They are Audio-Visual Production (AVP); Movies: Leasing; FM Radio; and Television Broadcasting. While B.A.G. Films Movies segment made no contribution to the company’s revenue or operating results in the current quarter, Q2-2015 or Q2-2016, FM Radio and TV Broadcasting segment numbers have already been mentioned above.

    Audio Visual Production segment (AVP segment)

    AVP segment reported a more than triple (3.3 times) revenue in Q3-2016 at Rs 3.29 crore as compared to Rs 1 crore in Q2-2016, but a 17.6 per cent YoY decline as compared to the Rs 4 crore in Q3-2015. The segment reported an operating profit in Q3-2016 of Rs 1.72 crore as compared to a loss of Rs 0.66 crore in the previous quarter, but a 15.2 per cent YoY decline as compared to an operating profit of Rs 2.03 crore in Q3-2015.

    Leasing segment (The numbers for this segment are mentioned in lakh – 100 lakh = 1 crore)

    BAG Films leasing segment reported revenue of just Rs 6.4 lakh in the current quarter as compared to Rs 6.95 lakh in the previous quarter and Rs 19.8 lakh in Q3-2015. The segment reported an operating loss of Rs 110.23 lakh as compared to an operating loss of Rs 82.63 lakh in Q2-2016 and an operating loss of Rs 83.46 lakh in Q3-2015.

  • November 2015: ACT, Airtel lead subscriber additions for wireline broadband in India

    November 2015: ACT, Airtel lead subscriber additions for wireline broadband in India

    BENGALURU: Until 30 October, 2015 (Oct-15), ACT Broadband was leading in wireline broadband internet subscriber additions in India. November 2015 numbers released by the Telecom Regulatory Authority of India (TRAI) indicate that as on 30 November, 2015 (Nov-15), both ACT and Bharti Airtel have added 2.3 lakh subscribers (subject to a granularity of 10,000) each in the period between 31 December, 2014, hence 1 January, 2015 (Dec-14,) and Nov-15. In terms of wireline internet subscription numbers, Airtel had 16.4 lakh subscribers as on Nov-15, almost double the 8.4 lakh subscribers that ACT Broadband had.

    The top five players in India in the wireline broadband internet space in pecking order are the public sector Bharat Sanchar Nigam Limited (BSNL), Bharti Airtel Limited (Airtel), public sector Mahanagar Telephone Nigam Limited (MTNL), Atria Convergence Technologies Private Limited (ACT, ACT Broadband) and You Broadband (You BB). Among these five, only BSNL and Airtel can be termed national players at present. BSNL, Airtel and MTNL also provide wireline and mobile services while Airtel also has a direct to home (DTH) segment. ACT started off as an MSO with operations concentrated in a few major cities and towns located mainly in South India. It started internet services (ACT Broadband) a little later and has grown its broadband internet subscriber base over time, to the extent that it is quite likely the biggest private wireline broadband player in South India. You BB offers broadband operations in a few cities in Maharashtra, Gujarat the NCR region Andhra Pradesh and Karnataka. 

    Overall, November 2015 saw 140,000 wireline subscriber additions, of which 30,000 were added by Airtel and 20,000 by ACT; 10,000 by You Broadband, while the public sector behemoth BSNL saw a decline of 10,000 subscribers. MTNL did not have any new additions, taking the contribution of the top five wireline broadband players to 50,000 (or 35.57 per cent of overall additions) during Nov-15.

    Note: (1) 100,00,000 = 100 Lakh = 10 million = 1 crore
    (2) TRAI reports indicate data in millions of numbers up to 2 decimal places. Hence it is assumed in this report that a figure of 0.47 million (4.7 lakh) subscribers for You BB for July-2015 would be granular to the nearest 10,000. While percentages perforce have been mentioned up to two decimal places, the accuracy may vary, depending upon the exact number.
    (3) Industry sources say that TRAI numbers in the case of ACT for May-2015 are incorrect at 0.66 million and the correct number would be 0.693 million. This report considers the number as 6.93 lakh or 0.693 million.
    (4) MSOs have a number of subsidiaries and alliances, hence broadband numbers are split as applicable. The consolidated subscription numbers of these entities could be larger. Hathway is a case in point.
    (5) Ortel’s numbers for Q3-2015 have been estimated from the numbers released by it for Q1-2015, Q2-2015, Q4-2015 and FY-2015.
    (6) The term ‘operating revenue’ in this report indicates ‘total income from operations.’

    Please refer to Fig 1 below. 

    Over an 11 month period, the subscriber numbers share of the top five wired broadband players in the country has reduced from 88.45 per cent from Dec-14 to 85.56 per cent as on Nov-15. During the same period All India wireline internet subscriber base has grown 7.11 per cent from 153.2 lakh to 164.1 lakh.

    The average all India subscriber growth rate per month for the period 1 January, 2015 to 30 November, 2015 was 0.62 per cent. During the period Dec-14 to May-15, the maximum growth was 0.46 per cent in Feb-15 with 70,000 net new broadband connections. Apr-15 saw nil growth rate and witnessed a decline in growth rate of 0.07 per cent in subscribers in the case of the top five wireline players in India. The average subscriber growth rate in the first five month period of the previous year was 0.31 per cent per month. The average subscriber growth during the next six month period including June-15 until Nov-15 was 0.89 per cent, with the highest in Aug-15 at 1.01 per cent. Please refer to Fig 1A below. Overall, the all India subscriber base has been growing at a faster pace than growth rate of the subscriber base of the top five wireline internet service providers in India.

    Fig 2 below indicates the subscriber details of the top five wired broadband internet service providers. While ACT has shown the highest growth during the period in this report, BSNL has had the steepest fall in subscription numbers during the first 11 month period of calendar year 2015. ACT’s share of All India wireline broadband internet subscribers has increased from 3.98 per cent at the start of the year to 5.12 per cent until Nov-15, while BSNL’s share has declined from 65.14 per cent in Dec-14 to 60.51 per cent in Nov-15. By its very stagnancy, MTNL’s share of All India wireline broadband internet subscribers has reduced from 7.38 per cent to 6.89 per cent during the same period. Airtel’s share has increased from 9.20 per cent to 9.99 per cent, while You BB’s share has increased from 2.74 per cent to 3.05 per cent during the same period.

    As is obvious from Fig 1A above, the share of new subscriber additions by the top five players has been reducing. MSOs in India have started providing internet services on the back of their cable networks using Docsis technology. In general, they have started reporting double digit YoY increase in internet subscribers and revenue. Three of the major MSOs and a regional MSO, whose results are available in the public domain for the quarter ended 31 December, 2016 (Q3-2016 current quarter) have been showing steady growth in their broadband segment over the past few quarters.

    In this report, let us look at how these television cable industry players have performed in the broadband space in Q3-2016. The four are: Hathway Cable and Datacom Limited (Hathway), Den Networks Ltd (Den), Siti Cable Network Limited (Siti Cable), and the regional player Ortel Communications Limited (Ortel).

    Hathway’s consolidated broadband subscribers increased by 50,000 or 9.31 per cent more QoQ, in Q3-2015 to 5.67 lakh. Hathway’s Broadband subscription revenue in Q3-2016 increased 53.4 per cent YoY to Rs 78.7 crore as compared to Rs 57.7 crore and increased 9.5 per cent QoQ as compared to Rs 57.7 crore. Hathway’s broadband standalone ARPUs increased 3.8 per cent QoQ from Rs 658 to Rs 683.

    Siti Cable Broadband revenue in the current quarter almost doubled (grew 99 per cent) at Rs 13.9 crore (3.8 per cent of OPREV) as compared to Rs 7 crore (3.2 per cent of OPREV) in Q3-2015 and increased 49.5 per cent QoQ as compared to Rs 9.3 crore (four per cent of OPREV). Broadband subscribers in the current quarter increased 17 per cent to 1,07,000 from 91,450 in Q2-2016.

    Den has also ramped up its broadband subscribers by 33.3 per cent to 76,000 in the current quarter from 57,000 in the immediate trailing quarter. The company’s broadband segment revenue increased by over five times YoY (5.5 times) at Rs 11.96 crore (3.4 per cent of TIO) as compared to Rs 2.17 crore (0.8 per cent of TIO) in corresponding prior year quarter and increased 58 per cent QoQ as compared to Rs 8.23 crore (three per cent of TIO). The segment’s YoY operating loss increased to Rs 19.57 crore as compared to Rs 12.37 crore, but reduced QoQ as compared to Rs 23.07 crore. The company says that broadband ARPU has declined by Rs 10 in the current quarter to Rs 760 from Rs 770 in the previous quarter.

    Den’s Broadband Post Activation EBIDTA in Q3-2016 was negative Rs 16 crore as compared to the negative Rs 11 crore in Q3-2015 and negative Rs 20 crore in Q2-2016.

    Ortel’s broadband segment reported 16.3 per cent higher revenue at Rs 8.28 crore as compared to Rs 7.12 crore in the corresponding year ago quarter and 1.7 per cent more than the Rs 8.14 crore in Q2-2016. The broadband segment reported an operating profit of Rs 4.78 crore in the current quarter as compared to Rs 4.52 crore in Q3-2015 and 9.1 per cent higher than the Rs 438 crore in Q2-2016.

    Ortel’s broadband customers in the current quarter grew 16.2 per cent YoY to 67,709 as compared to 58,277 and grew 6.4 per cent QoQ as compared to 63,663. Broadband ARPU in Q3-2016 was higher at Rs 396, in Q3-2015 it was Rs 394 and in Rs Q2-2016 it was Rs 395.

  • November 2015: ACT, Airtel lead subscriber additions for wireline broadband in India

    November 2015: ACT, Airtel lead subscriber additions for wireline broadband in India

    BENGALURU: Until 30 October, 2015 (Oct-15), ACT Broadband was leading in wireline broadband internet subscriber additions in India. November 2015 numbers released by the Telecom Regulatory Authority of India (TRAI) indicate that as on 30 November, 2015 (Nov-15), both ACT and Bharti Airtel have added 2.3 lakh subscribers (subject to a granularity of 10,000) each in the period between 31 December, 2014, hence 1 January, 2015 (Dec-14,) and Nov-15. In terms of wireline internet subscription numbers, Airtel had 16.4 lakh subscribers as on Nov-15, almost double the 8.4 lakh subscribers that ACT Broadband had.

    The top five players in India in the wireline broadband internet space in pecking order are the public sector Bharat Sanchar Nigam Limited (BSNL), Bharti Airtel Limited (Airtel), public sector Mahanagar Telephone Nigam Limited (MTNL), Atria Convergence Technologies Private Limited (ACT, ACT Broadband) and You Broadband (You BB). Among these five, only BSNL and Airtel can be termed national players at present. BSNL, Airtel and MTNL also provide wireline and mobile services while Airtel also has a direct to home (DTH) segment. ACT started off as an MSO with operations concentrated in a few major cities and towns located mainly in South India. It started internet services (ACT Broadband) a little later and has grown its broadband internet subscriber base over time, to the extent that it is quite likely the biggest private wireline broadband player in South India. You BB offers broadband operations in a few cities in Maharashtra, Gujarat the NCR region Andhra Pradesh and Karnataka. 

    Overall, November 2015 saw 140,000 wireline subscriber additions, of which 30,000 were added by Airtel and 20,000 by ACT; 10,000 by You Broadband, while the public sector behemoth BSNL saw a decline of 10,000 subscribers. MTNL did not have any new additions, taking the contribution of the top five wireline broadband players to 50,000 (or 35.57 per cent of overall additions) during Nov-15.

    Note: (1) 100,00,000 = 100 Lakh = 10 million = 1 crore
    (2) TRAI reports indicate data in millions of numbers up to 2 decimal places. Hence it is assumed in this report that a figure of 0.47 million (4.7 lakh) subscribers for You BB for July-2015 would be granular to the nearest 10,000. While percentages perforce have been mentioned up to two decimal places, the accuracy may vary, depending upon the exact number.
    (3) Industry sources say that TRAI numbers in the case of ACT for May-2015 are incorrect at 0.66 million and the correct number would be 0.693 million. This report considers the number as 6.93 lakh or 0.693 million.
    (4) MSOs have a number of subsidiaries and alliances, hence broadband numbers are split as applicable. The consolidated subscription numbers of these entities could be larger. Hathway is a case in point.
    (5) Ortel’s numbers for Q3-2015 have been estimated from the numbers released by it for Q1-2015, Q2-2015, Q4-2015 and FY-2015.
    (6) The term ‘operating revenue’ in this report indicates ‘total income from operations.’

    Please refer to Fig 1 below. 

    Over an 11 month period, the subscriber numbers share of the top five wired broadband players in the country has reduced from 88.45 per cent from Dec-14 to 85.56 per cent as on Nov-15. During the same period All India wireline internet subscriber base has grown 7.11 per cent from 153.2 lakh to 164.1 lakh.

    The average all India subscriber growth rate per month for the period 1 January, 2015 to 30 November, 2015 was 0.62 per cent. During the period Dec-14 to May-15, the maximum growth was 0.46 per cent in Feb-15 with 70,000 net new broadband connections. Apr-15 saw nil growth rate and witnessed a decline in growth rate of 0.07 per cent in subscribers in the case of the top five wireline players in India. The average subscriber growth rate in the first five month period of the previous year was 0.31 per cent per month. The average subscriber growth during the next six month period including June-15 until Nov-15 was 0.89 per cent, with the highest in Aug-15 at 1.01 per cent. Please refer to Fig 1A below. Overall, the all India subscriber base has been growing at a faster pace than growth rate of the subscriber base of the top five wireline internet service providers in India.

    Fig 2 below indicates the subscriber details of the top five wired broadband internet service providers. While ACT has shown the highest growth during the period in this report, BSNL has had the steepest fall in subscription numbers during the first 11 month period of calendar year 2015. ACT’s share of All India wireline broadband internet subscribers has increased from 3.98 per cent at the start of the year to 5.12 per cent until Nov-15, while BSNL’s share has declined from 65.14 per cent in Dec-14 to 60.51 per cent in Nov-15. By its very stagnancy, MTNL’s share of All India wireline broadband internet subscribers has reduced from 7.38 per cent to 6.89 per cent during the same period. Airtel’s share has increased from 9.20 per cent to 9.99 per cent, while You BB’s share has increased from 2.74 per cent to 3.05 per cent during the same period.

    As is obvious from Fig 1A above, the share of new subscriber additions by the top five players has been reducing. MSOs in India have started providing internet services on the back of their cable networks using Docsis technology. In general, they have started reporting double digit YoY increase in internet subscribers and revenue. Three of the major MSOs and a regional MSO, whose results are available in the public domain for the quarter ended 31 December, 2016 (Q3-2016 current quarter) have been showing steady growth in their broadband segment over the past few quarters.

    In this report, let us look at how these television cable industry players have performed in the broadband space in Q3-2016. The four are: Hathway Cable and Datacom Limited (Hathway), Den Networks Ltd (Den), Siti Cable Network Limited (Siti Cable), and the regional player Ortel Communications Limited (Ortel).

    Hathway’s consolidated broadband subscribers increased by 50,000 or 9.31 per cent more QoQ, in Q3-2015 to 5.67 lakh. Hathway’s Broadband subscription revenue in Q3-2016 increased 53.4 per cent YoY to Rs 78.7 crore as compared to Rs 57.7 crore and increased 9.5 per cent QoQ as compared to Rs 57.7 crore. Hathway’s broadband standalone ARPUs increased 3.8 per cent QoQ from Rs 658 to Rs 683.

    Siti Cable Broadband revenue in the current quarter almost doubled (grew 99 per cent) at Rs 13.9 crore (3.8 per cent of OPREV) as compared to Rs 7 crore (3.2 per cent of OPREV) in Q3-2015 and increased 49.5 per cent QoQ as compared to Rs 9.3 crore (four per cent of OPREV). Broadband subscribers in the current quarter increased 17 per cent to 1,07,000 from 91,450 in Q2-2016.

    Den has also ramped up its broadband subscribers by 33.3 per cent to 76,000 in the current quarter from 57,000 in the immediate trailing quarter. The company’s broadband segment revenue increased by over five times YoY (5.5 times) at Rs 11.96 crore (3.4 per cent of TIO) as compared to Rs 2.17 crore (0.8 per cent of TIO) in corresponding prior year quarter and increased 58 per cent QoQ as compared to Rs 8.23 crore (three per cent of TIO). The segment’s YoY operating loss increased to Rs 19.57 crore as compared to Rs 12.37 crore, but reduced QoQ as compared to Rs 23.07 crore. The company says that broadband ARPU has declined by Rs 10 in the current quarter to Rs 760 from Rs 770 in the previous quarter.

    Den’s Broadband Post Activation EBIDTA in Q3-2016 was negative Rs 16 crore as compared to the negative Rs 11 crore in Q3-2015 and negative Rs 20 crore in Q2-2016.

    Ortel’s broadband segment reported 16.3 per cent higher revenue at Rs 8.28 crore as compared to Rs 7.12 crore in the corresponding year ago quarter and 1.7 per cent more than the Rs 8.14 crore in Q2-2016. The broadband segment reported an operating profit of Rs 4.78 crore in the current quarter as compared to Rs 4.52 crore in Q3-2015 and 9.1 per cent higher than the Rs 438 crore in Q2-2016.

    Ortel’s broadband customers in the current quarter grew 16.2 per cent YoY to 67,709 as compared to 58,277 and grew 6.4 per cent QoQ as compared to 63,663. Broadband ARPU in Q3-2016 was higher at Rs 396, in Q3-2015 it was Rs 394 and in Rs Q2-2016 it was Rs 395.

  • FY-2015: Technicolor reports improved numbers

    FY-2015: Technicolor reports improved numbers

    BENGALURU: Technicolor revenues increased 12 per cent at current currency and 4.7 per cent at constant currency for the year ended 31 December, 2015 (current year, FY-2015). The company says that its growth reflects growth across the Entertainment Services and Technology segments and broadly stable Connected Home revenues. Technicolor revenue for the current year was €3,652 million as compared to €3,332 million in FY-2014.

    Technicolor CEO Frederic Rose said, “In 2015, our teams closed successfully, and in parallel, a number of large acquisitions, while remaining focused on delivering a very strong free cash flow. Moving forward, Technicolor is a much more balanced company built on three leading operating businesses and a core licensing business underpinning our material upgrade of Drive 2020 objectives.”   

    Adjusted EBITDA from continuing operations reached €565 million in FY-2015, up 3.1 per cent at constant currency compared to 2014, representing a margin of 15.5 per cent, down by one point year-on-year (YoY). Technicolor says that the adjusted EBITDA increase reflected a solid Licensing revenue performance, combined with strong organic growth in Production Services, partially offset by a weak DVD Services performance in the first half, the impact of unfavourable € versus US$ exchange rate fluctuations on procurements for Connected Home in the second half, as well as a lower contribution from exited activities.

    Segment performance

    Connected Homes

    Connected Homes segment revenues totalled €1,451 million in FY-2015, up five per cent at current currency and, and up 0.3 per cent as compared to the reported €1,382 million in FY-2014. Excluding Cisco Connected Devices (CCD), revenue declined 1.2 per cent as reported and declined 5.7 per cent at constant currency in FY-2015 to €1,3,65 million as compared to $1,382 million in the previous fiscal.

    Technicolor says that even without the contribution of CCD, Connected Home continued to outpace the global CPE market despite adverse business conditions experienced in some regions, driven by a number of new awards and customer wins, including high-end products. The segment achieved in particular a sustained performance in Europe, Middle-East & Africa and Asia-Pacific, both regions reporting a double digit YoY growth in revenues, benefiting notably from a mix improvement associated with the introduction of new products and a further ramp up in the value chain. Connected Home faced however lower levels of activity in both North and Latin America, primarily reflecting cautious customer approach towards product orders and inventory management, due to pending industry consolidation in the US and unfavourable macroeconomic conditions in Brazil.

    Adjusted EBITDA reached €76 million in FY-2015 compared to €77 million in FY-2014, with a negative forex impact of €6 million. At constant currency, adjusted EBITDA was €82 million, up by 5.8 per cent compared to 2014, with a margin of 5.9 per cent, up by 0.3 point YoY.

    Entertainment Services

    Entertainment Services revenue, excluding exited activities, was €1,639 million, up 10 per cent YoY in FY-2015 at constant currency, resulting from strong organic growth, the contribution from recent acquisitions in Production Services and solid revenues recorded by DVD Services.

    Production Services recorded a strong double-digit increase in revenues in FY-2015 compared to FY-2014 says Technicolor. Revenues expanded by almost 40 per cent YoY at constant currency, as a result of a strong double digit organic revenue growth, mostly due to a record level of activity in Visual Effects for feature films, and the additions of Mr. X, OuiDo Productions, Mikros Images and The Mill.

    The company says that VFX for commercials and Animation activities also recorded higher revenues, resulting from increased levels of activity across facilities, while Postproduction revenues improved year-on-year.

    Technicolor provided VFX and/or Postproduction services to 10 of the top-16 grossing films of the year worldwide, including some of the best box office performers such as Furious 7 (Universal), Avengers: Age of Ultron (Disney), Spectre (Sony) and The Hunger Games: Mockingjay – Part 2 (Lionsgate).

    DVD Services revenues were generally stable at constant currency in FY-2015 compared to FY-2014, driven by resilient total Standard Definition DVD, Blu-ray and CD disc volumes, which were down less than one per cent YoY, reflecting a marked improvement compared to the 11 per cent volume decline recorded in FY-2014. Blu-ray disc volumes were up by eight per cent in FY-2015 compared to FY-2014, supported by the aforementioned factors and the ongoing growth in Xbox One games volumes, while Standard-Definition discs declined by five per cent YoY. Overall FY-2015 volume trends in Europe continued to be generally better than in North America, mostly due to regionally specific promotional activity for selected studio customers, as well as to the ongoing adoption of Blu-ray in this region (as compared to the more mature and stable US Blu-ray market).

    Total Games volumes declined by 11 per cent YoY, with ongoing erosion in prior generation video game console demand outpacing growth for the current generation Xbox One platform. Going forward, prior generation video games volumes have now reached an immaterial level and should not influence future trends to the same degree.

    Excluding exited activities, Adjusted EBITDA was €190 million, down 2.1 per cent at constant currency YoY, as the stronger Production Services contribution was almost fully offset by lower DVD Services performance. However, the free cash flow generation in DVD Services was stable year-over-year notwithstanding the adjusted EBITDA decline says the company.

    Technology

    Technology revenues excluding M-GO, which was sold in early January 2016 to Fandango, a business unit of NBCUniversal, amounted to €490 million, up 3.3 per cent year-over-year at constant currency, primarily driven by higher revenues from the MPEG LA pool, which represented 59 per cent of total Licensing revenues in FY-2015 compared to 45 per cent in FY-2014. The Group’s direct licensing programs recorded a solid performance in the first half, particularly for Digital TV, which benefited from the strong level of new contracts and contract renewals in the course of 2014. In the second half, direct licensing programs posted a lower performance as the Group did not sign any major contract renewal or new contract as some ongoing discussions with manufacturers were delayed to leverage the joint licensing program with Sony in Digital TV (DTV) and Computer Display Monitor (CDM) that was announced in September.

    Excluding M-GO, Adjusted EBITDA reached €389 million, up 3.4 per cent at constant currency year-on-year, driven by the strong contribution of the MPEG LA patent pool.

  • FY-2015: Technicolor reports improved numbers

    FY-2015: Technicolor reports improved numbers

    BENGALURU: Technicolor revenues increased 12 per cent at current currency and 4.7 per cent at constant currency for the year ended 31 December, 2015 (current year, FY-2015). The company says that its growth reflects growth across the Entertainment Services and Technology segments and broadly stable Connected Home revenues. Technicolor revenue for the current year was €3,652 million as compared to €3,332 million in FY-2014.

    Technicolor CEO Frederic Rose said, “In 2015, our teams closed successfully, and in parallel, a number of large acquisitions, while remaining focused on delivering a very strong free cash flow. Moving forward, Technicolor is a much more balanced company built on three leading operating businesses and a core licensing business underpinning our material upgrade of Drive 2020 objectives.”   

    Adjusted EBITDA from continuing operations reached €565 million in FY-2015, up 3.1 per cent at constant currency compared to 2014, representing a margin of 15.5 per cent, down by one point year-on-year (YoY). Technicolor says that the adjusted EBITDA increase reflected a solid Licensing revenue performance, combined with strong organic growth in Production Services, partially offset by a weak DVD Services performance in the first half, the impact of unfavourable € versus US$ exchange rate fluctuations on procurements for Connected Home in the second half, as well as a lower contribution from exited activities.

    Segment performance

    Connected Homes

    Connected Homes segment revenues totalled €1,451 million in FY-2015, up five per cent at current currency and, and up 0.3 per cent as compared to the reported €1,382 million in FY-2014. Excluding Cisco Connected Devices (CCD), revenue declined 1.2 per cent as reported and declined 5.7 per cent at constant currency in FY-2015 to €1,3,65 million as compared to $1,382 million in the previous fiscal.

    Technicolor says that even without the contribution of CCD, Connected Home continued to outpace the global CPE market despite adverse business conditions experienced in some regions, driven by a number of new awards and customer wins, including high-end products. The segment achieved in particular a sustained performance in Europe, Middle-East & Africa and Asia-Pacific, both regions reporting a double digit YoY growth in revenues, benefiting notably from a mix improvement associated with the introduction of new products and a further ramp up in the value chain. Connected Home faced however lower levels of activity in both North and Latin America, primarily reflecting cautious customer approach towards product orders and inventory management, due to pending industry consolidation in the US and unfavourable macroeconomic conditions in Brazil.

    Adjusted EBITDA reached €76 million in FY-2015 compared to €77 million in FY-2014, with a negative forex impact of €6 million. At constant currency, adjusted EBITDA was €82 million, up by 5.8 per cent compared to 2014, with a margin of 5.9 per cent, up by 0.3 point YoY.

    Entertainment Services

    Entertainment Services revenue, excluding exited activities, was €1,639 million, up 10 per cent YoY in FY-2015 at constant currency, resulting from strong organic growth, the contribution from recent acquisitions in Production Services and solid revenues recorded by DVD Services.

    Production Services recorded a strong double-digit increase in revenues in FY-2015 compared to FY-2014 says Technicolor. Revenues expanded by almost 40 per cent YoY at constant currency, as a result of a strong double digit organic revenue growth, mostly due to a record level of activity in Visual Effects for feature films, and the additions of Mr. X, OuiDo Productions, Mikros Images and The Mill.

    The company says that VFX for commercials and Animation activities also recorded higher revenues, resulting from increased levels of activity across facilities, while Postproduction revenues improved year-on-year.

    Technicolor provided VFX and/or Postproduction services to 10 of the top-16 grossing films of the year worldwide, including some of the best box office performers such as Furious 7 (Universal), Avengers: Age of Ultron (Disney), Spectre (Sony) and The Hunger Games: Mockingjay – Part 2 (Lionsgate).

    DVD Services revenues were generally stable at constant currency in FY-2015 compared to FY-2014, driven by resilient total Standard Definition DVD, Blu-ray and CD disc volumes, which were down less than one per cent YoY, reflecting a marked improvement compared to the 11 per cent volume decline recorded in FY-2014. Blu-ray disc volumes were up by eight per cent in FY-2015 compared to FY-2014, supported by the aforementioned factors and the ongoing growth in Xbox One games volumes, while Standard-Definition discs declined by five per cent YoY. Overall FY-2015 volume trends in Europe continued to be generally better than in North America, mostly due to regionally specific promotional activity for selected studio customers, as well as to the ongoing adoption of Blu-ray in this region (as compared to the more mature and stable US Blu-ray market).

    Total Games volumes declined by 11 per cent YoY, with ongoing erosion in prior generation video game console demand outpacing growth for the current generation Xbox One platform. Going forward, prior generation video games volumes have now reached an immaterial level and should not influence future trends to the same degree.

    Excluding exited activities, Adjusted EBITDA was €190 million, down 2.1 per cent at constant currency YoY, as the stronger Production Services contribution was almost fully offset by lower DVD Services performance. However, the free cash flow generation in DVD Services was stable year-over-year notwithstanding the adjusted EBITDA decline says the company.

    Technology

    Technology revenues excluding M-GO, which was sold in early January 2016 to Fandango, a business unit of NBCUniversal, amounted to €490 million, up 3.3 per cent year-over-year at constant currency, primarily driven by higher revenues from the MPEG LA pool, which represented 59 per cent of total Licensing revenues in FY-2015 compared to 45 per cent in FY-2014. The Group’s direct licensing programs recorded a solid performance in the first half, particularly for Digital TV, which benefited from the strong level of new contracts and contract renewals in the course of 2014. In the second half, direct licensing programs posted a lower performance as the Group did not sign any major contract renewal or new contract as some ongoing discussions with manufacturers were delayed to leverage the joint licensing program with Sony in Digital TV (DTV) and Computer Display Monitor (CDM) that was announced in September.

    Excluding M-GO, Adjusted EBITDA reached €389 million, up 3.4 per cent at constant currency year-on-year, driven by the strong contribution of the MPEG LA patent pool.

  • FY-2015: Forex retards Discovery Communications revenue, lowers adjusted OIBDA

    FY-2015: Forex retards Discovery Communications revenue, lowers adjusted OIBDA

    BENGALURU: Discovery Communications Inc. (Discovery) US Networks segment reported 6.1 per cent growth in revenue for the year ended 31 December, 2015 (FY-2015, current year) at $3,131 million as compared to $2,950 million in the previous year. These gains were offset by a 2.1 per cent decline in revenues in FY-2015 by its International Networks segment to $3,092 million as compared to $3,157 million in the previous year, primarily due to currency effects. Discovery reported revenue of $6,394 million in the current year as compared to $6,265 million in the previous year. 

    Adjusted Operating Income Before Depreciation and Amortisation (OIBDA) declined 3.7 per cent in FY-2015 to $2,398 million as compared to $2,491 million in the previous year. Net income available to Discovery in FY-2015 declined 9.2 per cent to $1,034 million ($1.58 per diluted share) compared to $1,139 million ($1.66 per diluted share) for FY-2014, primarily due to currency exchange rates, higher losses associated with the sale of businesses and lower equity earnings, partially offset by a decrease in taxes, restructuring costs and equity-based compensation.

    Discovery president and CEO David Zaslav said, “In 2015, Discovery Communications continued to build momentum with our unmatched worldwide brands and leading multiplatform distribution network. We surpassed three billion cumulative viewers, launched more new networks and increased audience and market share, all of which helped to drive steady global growth and strong financial results. Propelled by our category leadership, broad rights ownership and content and brand expansion across platforms, Discovery is well positioned to thrive in the rapidly evolving media landscape and to drive continued shareholder value in the years ahead.”

    For the quarter ended 31 December, 2015 (Q4-2015, current quarter), the company reported 1.8 per cent decline in revenue to $1,646 million as compared to $1,676 in the corresponding prior year quarter also primarily due to currency effects says Discovery. While US Networks reported 5.6 per cent increased revenues for Q4-2015 at $787 million from $745 million, International Networks revenue declined 7.7 per cent to $816 million from $884 million in Q4-2014. Adjusted OIBDA declined 10 per cent to $574 million in Q4-2015 from $638 million in Q4-2014. US Networks adjusted OIBDA in the current quarter increased 1.2 per cent to $410 million from $405 million. International Networks adjusted OIBDA declined 20.2 per cent to $262 million from $329 million in the corresponding prior year quarter.

    In Q4-2015, net income available to Discovery stockholders decreased to $219 million ($0.34 per diluted share) compared to $250 million ($0.38 per diluted share) for Q4-2014, primarily due to foreign currency exchange rates, losses associated with the sale of businesses and higher net income attributable to non-controlling interests, partially offset by a decrease in restructuring costs and higher earnings related to equity-method instruments says the company.

    Advertising and Distribution numbers

    Distribution revenues in FY-2015 increased eight per cent to $3,068 million from $2,842 in the previous year. Advertising revenues in FY-2015 declined 2.8 per cent to $3,004 million from $3,089 million in FY-2014. Discovery says that Distribution revenues, excluding the impact of Eurosport and currency effects, grew primarily due to increased rates and subscribers in Latin America as well as increased subscribers in CEEMEA. Advertising revenues, excluding the impact of Eurosport, SBS Radio and currency effects, were up primarily due to higher pricing and ratings in Southern Europe, higher pricing, volume and ratings in Latin America, and higher pricing in Northern Europe. 

    Excluding the impact of Eurosport, SBS Radio and foreign currency exchange rates, Adjusted OIBDA was up reflecting the revenue growth partially offset by an 11 per cent increase in operating expenses. The higher operating expenses were primarily due to increased content expenses and personnel costs.

    Distribution revenues in Q4-2015 increased 1.8 per cent to $759 million from $745 million in Q4-2014. Advertising revenues in the current quarter declined 3.2 per cent to $804 million from $831 million in the corresponding quarter of 2014.

    Discovery says that Distribution revenues, excluding the impact of Eurosport and currency effects, grew mainly from increased rates and subscribers in Latin America. Advertising revenues, excluding the impact of Eurosport, SBS Radio and currency effects, were up, primarily due to higher pricing and ratings in Southern Europe, higher pricing and volume in Latin America, and higher pricing and volume in Asia.

    Excluding the impact of Eurosport, SBS Radio and currency, Adjusted OIBDA was up one per cent, reflecting the revenue growth partially offset by an 18 per cent increase in operating expenses. The higher operating expenses were primarily due to increased content expenses and personnel costs.

  • FY-2015: Forex retards Discovery Communications revenue, lowers adjusted OIBDA

    FY-2015: Forex retards Discovery Communications revenue, lowers adjusted OIBDA

    BENGALURU: Discovery Communications Inc. (Discovery) US Networks segment reported 6.1 per cent growth in revenue for the year ended 31 December, 2015 (FY-2015, current year) at $3,131 million as compared to $2,950 million in the previous year. These gains were offset by a 2.1 per cent decline in revenues in FY-2015 by its International Networks segment to $3,092 million as compared to $3,157 million in the previous year, primarily due to currency effects. Discovery reported revenue of $6,394 million in the current year as compared to $6,265 million in the previous year. 

    Adjusted Operating Income Before Depreciation and Amortisation (OIBDA) declined 3.7 per cent in FY-2015 to $2,398 million as compared to $2,491 million in the previous year. Net income available to Discovery in FY-2015 declined 9.2 per cent to $1,034 million ($1.58 per diluted share) compared to $1,139 million ($1.66 per diluted share) for FY-2014, primarily due to currency exchange rates, higher losses associated with the sale of businesses and lower equity earnings, partially offset by a decrease in taxes, restructuring costs and equity-based compensation.

    Discovery president and CEO David Zaslav said, “In 2015, Discovery Communications continued to build momentum with our unmatched worldwide brands and leading multiplatform distribution network. We surpassed three billion cumulative viewers, launched more new networks and increased audience and market share, all of which helped to drive steady global growth and strong financial results. Propelled by our category leadership, broad rights ownership and content and brand expansion across platforms, Discovery is well positioned to thrive in the rapidly evolving media landscape and to drive continued shareholder value in the years ahead.”

    For the quarter ended 31 December, 2015 (Q4-2015, current quarter), the company reported 1.8 per cent decline in revenue to $1,646 million as compared to $1,676 in the corresponding prior year quarter also primarily due to currency effects says Discovery. While US Networks reported 5.6 per cent increased revenues for Q4-2015 at $787 million from $745 million, International Networks revenue declined 7.7 per cent to $816 million from $884 million in Q4-2014. Adjusted OIBDA declined 10 per cent to $574 million in Q4-2015 from $638 million in Q4-2014. US Networks adjusted OIBDA in the current quarter increased 1.2 per cent to $410 million from $405 million. International Networks adjusted OIBDA declined 20.2 per cent to $262 million from $329 million in the corresponding prior year quarter.

    In Q4-2015, net income available to Discovery stockholders decreased to $219 million ($0.34 per diluted share) compared to $250 million ($0.38 per diluted share) for Q4-2014, primarily due to foreign currency exchange rates, losses associated with the sale of businesses and higher net income attributable to non-controlling interests, partially offset by a decrease in restructuring costs and higher earnings related to equity-method instruments says the company.

    Advertising and Distribution numbers

    Distribution revenues in FY-2015 increased eight per cent to $3,068 million from $2,842 in the previous year. Advertising revenues in FY-2015 declined 2.8 per cent to $3,004 million from $3,089 million in FY-2014. Discovery says that Distribution revenues, excluding the impact of Eurosport and currency effects, grew primarily due to increased rates and subscribers in Latin America as well as increased subscribers in CEEMEA. Advertising revenues, excluding the impact of Eurosport, SBS Radio and currency effects, were up primarily due to higher pricing and ratings in Southern Europe, higher pricing, volume and ratings in Latin America, and higher pricing in Northern Europe. 

    Excluding the impact of Eurosport, SBS Radio and foreign currency exchange rates, Adjusted OIBDA was up reflecting the revenue growth partially offset by an 11 per cent increase in operating expenses. The higher operating expenses were primarily due to increased content expenses and personnel costs.

    Distribution revenues in Q4-2015 increased 1.8 per cent to $759 million from $745 million in Q4-2014. Advertising revenues in the current quarter declined 3.2 per cent to $804 million from $831 million in the corresponding quarter of 2014.

    Discovery says that Distribution revenues, excluding the impact of Eurosport and currency effects, grew mainly from increased rates and subscribers in Latin America. Advertising revenues, excluding the impact of Eurosport, SBS Radio and currency effects, were up, primarily due to higher pricing and ratings in Southern Europe, higher pricing and volume in Latin America, and higher pricing and volume in Asia.

    Excluding the impact of Eurosport, SBS Radio and currency, Adjusted OIBDA was up one per cent, reflecting the revenue growth partially offset by an 18 per cent increase in operating expenses. The higher operating expenses were primarily due to increased content expenses and personnel costs.