BENGALURU: Higher competitive intensity in the market, delay in collections and issues pertaining to debt repayment are some of the reasons that Indian regional cable and broadband player Ortel Communications Ltd (Ortel) says that it has incurred a loss of Rs 95.28 crore for the year ended 31 March 2018 (FY 2018, year, fiscal under review).
Ortel president and CEO Bibhu Prasad Rath said, “Our FY 2018 was very challenging for the company due to delay in collections, higher competitive intensity in the marketplace as well as issues pertaining to debt repayment. We have been working on all these parameters with an objective to improve our overall performance in the future. As intimated in the previous quarter, the management reviewed the details of receivables and took a firm step by creating provision of Rs 679.4 million (Rs 67.94 crore) against doubtful receivables. This amount is primarily on account of disruption of services during the process of digitisation and acquisition of local operators. This significantly impacted our P&L in FY 2018.”
However, Rath is confident of a brighter 2019. He added, “We want to start afresh in FY2019 and restore our business momentum. We have also taken many steps for increasing the net growth of our broadband business. This will result in lesser churn and higher sales thereby increasing our subscriber base and broadband revenue.”
Segment numbers
Three segments contribute to Ortel’s revenue. They are cable TV; broadband; and infrastructure leasing. Revenues from both cable TV and broadband segments declined in FY 2018 as compared to FY 2017.
Ortel’s cable TV segment’s revenue declined 5.1 per cent in fiscal 2018 to Rs 145.41 crore from Rs 153.19 crore. The segment reported an operating loss of Rs 15.54 crore in FY 2018 as compared to an operating profit of Rs 61.48 crore in FY 2017.
Broadband segment’s revenue declined 35.5 per cent in FY 2018 to Rs 23.16 crore from Rs 35.91 crore in FY 2017. The segment’s operating profit declined to less than a sixth (declined 83.5 per cent) in FY 2018 to Rs 3.13 crore as compared to Rs 18.96 crore in the previous fiscal.
Ortel’s infrastructure and leasing segment had operating revenue of Rs 11.72 crore in FY 2018 which was 5.6 per cent more than the Rs 11.10 crore in FY 2017. The segment’s operating profit declined 15.5 percent in FY 2018 to Rs 8.92 crore from R 10.55 crore in FY 2017.
Let us look at the other numbers reported by Ortel
Ortel operating revenue for the year under review declined 9.4 per cent in FY 2018 to Rs 184.04 crore as compared to Rs 203.21 crore in the previous year. Total income including other income for fiscal 2018 reduced 10.1 per cent to Rs 186.20 crore as compared to Rs 207.07 crore in the previous fiscal. The company incurred an operating loss (negative EBITDA including other income) of Rs 34.85 crore in FY 2018 as compared to a positive EBITDA including other income of Rs 53.88 crore in the previous fiscal. As mentioned above, net loss for the period under review was Rs 95.28 crore as compared to a profit after tax of Rs 0.50 crore in FY 2017.
Ortel’s total expenditure in FY 2018 declined two per cent to Rs 202.63 crore from Rs 206.81 crore in fiscal 2017. Programming costs increased 17.7 per cent in FY 2018 to Rs 45.26 crore from Rs 38.45 crore in FY 2017. Bandwidth costs in the year under review increased 6.1 per cent to Rs 18.03 crore from Rs 16.99 crore. Finance costs in FY 2018 increased 9.7 per cent to Rs 29.19 crore from Rs 26.62 crore in FY 2017.
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