MUMBAI: Impairment of trade receivables, advances and exposure to certain entities including Joint Ventures to the extent of Rs 333.92 crore for the financial year ended 31 March 2019 (FY 2019, year or fiscal under review) along with other exceptional items pulled down Hathway Cable and Datacom Limited (Hathway Cable) numbers. Exceptional items in FY 2019 impacted the company to the extent of Rs 429.62 crore as compared to just 5.34 crore in FY 2018. The company says that in view of the New Regulatory Framework for Broadcasting & Cable services sector notified by the Telecom Regulatory Authority of India (TRAI), which has come into effect during the fourth quarter of 2019 resulted into changes in pricing mechanism and arrangements amongst the Company, LCOs and Broadcasters as well as equity infusion ; Hathway Cable says that these adjustments, having one-time impact on financial statements, have hence been disclosed as 'Exceptional Item in its Financial Results' for the period. It must be noted that all figures in this reported are consolidated numbers unless stated otherwise.
Already reeling under lower operating revenue and result for its broadband segment and higher operating loss from its cable business, Hathway reported a higher loss after tax of Rs 187.67 crore in FY 2019 as compared to a net loss of Rs 107.86 crore.
The loss for FY 2019 would be even higher, were it not for deferred taxes to the extent of Rs 438.95 crore. Hathway Cable says that the deferred tax assets recognised during the period are mainly in respect of unabsorbed depreciation allowance available for set off for an indefinite period in terms of applicable tax laws. Considering the revision in business plans and growth strategy of the group, pursuant to fresh infusion of equity capital and implementation of NTO; the Hathway Cable management is reasonably certain of future taxable income and hence recovery of such deferred tax assets.
Other exceptional items include write down to property plant and equipment to the extent of Rs 69.83 crore while expenses relating to equity infusion cost the company Rs 25.87 crore. During the quarter ended 31 March 2019 (Q4 2019), Hathway Cable had allotted, on preferential basis, 908,810,000 equity shares of Rs 2 each at a premium of Rs 30.35 per share to its acquirers (Jio Content Distribution Holdings Private Ltd, Jio Internet Distribution Holdings Private Ltd and Jio Cable and Broadband Holdings Private Ltd) aggregating to Rs 2,940 crores representing 51.34 percent of post allotment equity share capital of the company:
Hathway cable has two segments – broadband and cable TV. Broadband segment revenue in FY 2019 was 3.1 percent lower at Rs 527.63 crore as compared to Rs 544.54 crore in FY 2018. The segment’s operating result fell to less than a third (declined by 67.7 percent) in FY 2019 at Rs 42.01 crore as compared to Rs 130.25 crore in FY 2018.
Cable TV segment revenue in FY 2019 increased 4.1 percent to Rs 1,030.66 crore from Rs 990.08 crore in FY 2018. The segment’s operating loss in FY 2019 increased to Rs 457.46 crore from Rs 129.33 crore in FY 2018.
Let us look at the other numbers reported by Hathway Cable
Hathway Cable reported slightly higher revenue from operations (higher by 1.5 percent) for FY 2019 at Rs 1,558.29 crore as compared to Rs 1,534.62 crore for FY 2018. Total Income for the period under review at Rs 1,619.20 crore was 4.8 percent higher as compared to Rs 1,544.36 crore for FY 2018.
Simple calculated EBITDA for FY 2019 at Rs 308.78 crore was 8 percent lower as compared to Rs 335.63 crore in FY 2018. Total comprehensive loss (TCL) in FY 2019 was Rs 186.53 crore as compared to TCL of Rs 105.21 crore in FY 2018.
Total expenses for FY 2019 at Rs 1,822.72 crore were 8.1 percent higher as compared to Rs 1,686.45 crore for FY 2018. Pay channel costs in FY 2019 at Rs 609.85 crore were 8.1 percent than Rs 569.35 crore in FY 2018. Operational expenses in FY 2019 at Rs 253.30 crore were 3 percent lower than Rs 263.90. crore in FY 2018.
Employee benefits expenses in FY 2019 at Rs 82.86 crore was 7.6 percent higher than Rs 76.99 crore in FY 2018. Finance costs in FY 2019 at Rs 220.8 crore were 44.5 percent higher than Rs 152.76 crore in FY 2018. Other expenses in FY 2019 were 5.1 percent higher at Rs 303.50 crore as compared to Rs 288.75 crore in FY 2018.
