Den Networks eyes 2.5m new digital subscribers in FY13

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Den Networks eyes 2.5m new digital subscribers in FY13

Speaking to CNBC-TV18 MG Azhar, COO of Den Networks said, the company has clocked closer to Rs 30 crore in EBITDA (QoQ). "We expect to maintain similar kind of work for the rest of the year," he added.

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Den Networks posted 68% decline in its profit after tax (PAT) for the second quarter ended September 30, 2011 at Rs 5 crore, compared to the corresponding period last fiscal due to high employee cost, interest and tax.

Speaking to CNBC-TV18 MG Azhar, COO of Den Networks said, the company has clocked closer to Rs 30 crore in EBITDA (QoQ). "We expect to maintain similar kind of work for the rest of the year," he added.

Below is a verbatim transcript of the interview. Also watch the video.

Q: The performance at the bottomline level was not quite up to the mark. What were the key features of the second quarter performance?

A: If you look at quarter-on-quarter, we have grown about 4% EBITDA (QoQ). But if you compare it with last year and you normalise for the extraordinary income that we had last year, there is still a 2-3% growth.

Q: Is that sustainable you think?

A: Yes, if you look at the last two quarters, the way we have performed we have been closer to Rs 30 crore EBITDA level QoQ. We expect to maintain similar kind of work for the rest of the year.

Q: Your subscriber addition was not bad. What has been the run rate this time around? What do you expect in the full year?

A: As you are aware, we have grown mostly through acquisition and most of acquisition has stabilized. We are not incrementally adding any new subscribers. However, on the digital side, we expect after the digitisation mandate, we will see significant jump in subscriber numbers on the digital.

Q: How has the Star-Den joint venture performed? What's been the contribution from that joint venture this quarter?

A: Out of Rs 260 crore turnover that we have for the current quarter, close to about Rs 98 crore been contributed by Star-Den JV and about Rs 162 crore odd have been contributed by the cable revenues.

Q: What about interest cost they have risen year on year. Would you see that continuing to mount in the second half?

A: We will probably be on a similar pace where we are currently - Rs 12 crore in the first half. We will see similar trend for the rest of the year. This is all in preparation for the new impending digitisation mandate.

Q: How do you expect things to pan out in terms of subscriber additions or revenues? How FY13 look to you?

A: In FY13, it's a completely new paradigm where the entire under declaration or non-addressability goes out of the market and 100% of the subscribers are going to be addressable. It will get reported very transparently to our numbers. In the first phase, we are looking to add about 2.5 million digital subscriber additions.

Q: Will there be a spurt of capex before that, and therefore, some bit of trouble before all the subscriber addition and correct understanding of subscriber additions come in?

A: We are comfortably placed when it comes to capital that we are carrying on our books. We have currently about Rs 200 crore of equity capital that's sitting on the books and we have got about Rs 200 crore sanctioned loan from the banks. This is good enough to take care of the first phase of our digitization capex.

Q: You won't see a spurt of interest cost in first half of FY13?

A: Not significantly maybe 10% kind of increment from hereon.