Mumbai: Subhash Chandra-owned direct-to-home television services provider Dish TV on Thursday reported a flat operating profit in the second quarter ended 30 September from a quarter earlier as fall in content costs was offset by a sharp rise in selling and distribution expenses other than commission.

Dish TV‘s Ebitda in the second quarter was Rs 1.55 billion, the same as in the first quarter but up 18.3 per cent from a year earlier. Ebitda margin for the second quarter was 29.2 per cent, at the same level as in the previous quarter.

The DTH service provider‘s average revenue per user (ARPU) was up by Rs 3 to Rs 159 in the second quarter compared to the previous quarter, following an increase in prices. This was reflected in a robust 4.73 per cent rise in subscription revenues in the second quarter to Rs 4.72 billion from Rs 4.55 billion a quarter earlier.

Dish TV managing director Jawahar Goel said, "In line with our expectation, the price hike initiated in the last quarter flowed through partially to deliver an encouraging ARPU increase."

Its programming and content costs was down to Rs 1.42 billion from Rs 1.51 billion in the first quarter but selling and distribution expenses other than commission rose 31 per cent to Rs 396.1 million in the second quarter from Rs 302.8 million a quarter earlier.

An exceptional gain of Rs 764 million in the second quarter resulted in Dish TV reporting a net profit of Rs 551 million, against a loss of Rs 323.2 million in the previous quarter. The exceptional gain was on account of a change in the accounting treatment of fluctuation in foreign currency rates following a clarification from the Ministry of Corporate Affairs.

Despite the push towards digitisation in the key markets of Mumbai, Delhi, Chennai and Kolkata from 1 November, Dish TV added only 477,000 new subscribers in the second quarter against 504,000 in the first quarter. The total number of subscribers of Dish TV as on 30 September was 13.9 million, of which 10 million were active subscribers.

Dish TV Q2 Performance:

Goel said, "The second quarter took off sluggishly, largely due to the macro headwinds and price hike at the entry level, however, our sound strategy and efficient on ground execution enabled a pickup in additions post the first month. Our launch of ‘Dish+‘, India‘s first standard definition recorder, helped us differentiate and attract consumer interest in a crowded market."

"In terms of digital conversions, despite regular data on steady growth in digital deployment flowing in, on ground implementation remains lukewarm and nowhere close to numbers doing the rounds. However, with the government sending firm signals against extension of the analog sunset date, we continue to target reasonable subscriber uptake going forward," he added.

Dish TV‘s total revenues in the second quarter at Rs 5.33 billion were up 2.56 per cent quarter-on-quarter up 2.56% and up 10 per cent from a year earlier.

Goel said "Dish TV continued to be free cash flow positive for the third consecutive quarter. Cost line items remained as projected; an expected hike in marketing cost came in due to additional spends around digitisation."

Subscriber churn remained at 1 per cent per month despite the package price increase last quarter," he added.