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Press Release

Videocon d2h Limited Quarter Ended September 30, 2015 Earnings Release

Subscription and activation revenue grew 24.6% year on year to INR 6.29 billion

Adjusted EBITDA(1) grew 32.3% year on year to INR 1.91 billion

Gross subscriber base stands at 14.27 million and net subscriber base at 10.84 million

Market leader in India for four consecutive years based on gross and net subscriber additions(2)

Company Release - 10/20/2015 12:08 PM ET

MUMBAI, India, Oct. 20, 2015 /PRNewswire/ -- Videocon d2h Limited (NASDAQ: VDTH) ("Videocon d2h" or the "Company") announced its financial results for the quarter ended September 30, 2015.

Videocon d2h Logo

Key highlights for the quarter ended September 30, 2015:

  • Subscription and activation revenue grew 24.6% year on year to INR 6.29 billion;
  • Revenue from operations grew 20.3% year on year to INR 6.90 billion;
  • Adjusted EBITDA grew 32.3% year on year to INR 1.91 billion;
  • Adjusted EBITDA margin expanded by 250 basis points year on year to 27.7%;
  • ARPU3 grew 7.9% year on year to INR 205;
  • Gross and net subscribers increased by 0.57 million and 0.20 million subscribers during the quarter, respectively;
  • Closing gross subscribers at 14.27 million and net subscribers base at 10.84 million; and
  • Churn came in at 1.19% per month

Commenting on the results, Mr. Dhoot said "I am happy to share that we have achieved EBITDA growth of 30.3% in the first half of the current fiscal as against our guidance of 25-30% growth. We are on track to deliver even stronger growth in the second half of this year, in line with the guidance shared earlier. During the quarter, we focused on enhancing our channel offering and added 14 Standard Definition and 4 High Definition channels. We have recently launched two proprietary services, namely d2h Hollywood HD and Darshan. With more than 50 million eye balls we also continue to gain traction on advertising revenue with marque advertisers coming on our platform."

Speaking on the near term subscriber growth outlook, Mr. Anil Khera, CEO of Videocon d2h, said "We estimate around 50 million television homes come under Phase III digitization, of which 24-25 million television homes are already on the digital platform. Thus, the target market under Phase III digitization is the remaining 25-26 million television homes that are currently on analog cable."

The Company continues to be the fastest growing Pay TV operator in India, with an estimated market share of 21% of the DTH net subscriber market share as on September 30, 2015 up from nine percent in the fiscal year ended March 2011.

Investor Meet and Reception

The Company will host an Investor Meet and Reception on Thursday, October 29, 2015 in New York. The event, hosted by the Executive Chairman, Saurabh Dhoot, commences at 5:30pm EST. The agenda of the investor meet is set out below.

Time

Agenda

5:30-6:00 PM

Registration & High Tea

6:00-6:10 PM

Welcome Address

6:10-6:30 PM

Presentation by Executive Chairman

6:30-6:50 PM

Q&A Session

6:50-7:00 PM

Closing Remarks

7:00 PM onwards

Cocktails

Financial Summary (Unaudited)

(In INR million, unless otherwise indicated)


Q2FY15

Q2FY16

% growth

Key financial metrics




Revenue from operations

5,734

6,901

20.3%

Subscription and activation revenue

5,047

6,290

24.6%

Adjusted EBITDA (1)

1,445

1,912

32.3%

Adjusted EBITDA margin (%)

25.2%

27.7%


Net loss

-614

-246

59.9%

Content cost (% of revenue)

34.8%

38.1%


Key operating metrics




Gross subscribers(million)

11.82

14.27

20.8%

Net subscribers (million)

9.46

10.84

14.6%

ARPU (Rs)

190

205

7.9%

Churn (%)

0.85%

1.19%


(1) Adjusted EBITDA is calculated after accounting for impact of the Videocon d2h ESOP Plan 2014 which amounted to Rs. 29.44 million.

The Company achieved strong subscription and activation revenue growth of 24.6% year on year to INR 6.29 billion in the second quarter of the 2016 fiscal year as compared to INR 5.05 billion in the second quarter of the 2015 fiscal year, primarily as a result of higher net subscribers and ARPU growth. Revenue from operations grew 20.3% year on year to INR 6.90 billion. Subscriber acquisition costs in the form of hardware subsidies were INR 1,775 per subscriber during the second quarter of the 2016 fiscal year.

Videocon d2h achieved Adjusted EBITDA of INR 1.91 billion for the second quarter of the 2016 fiscal year compared to INR 1.45 billion for the second quarter of the 2015 fiscal year, a growth of 32.3%. Adjusted EBITDA margin expanded 250 basis points year on year to 27.7% in the second quarter of the 2016 fiscal year, despite significant increase in content costs as a percentage of revenue. The Company began operating under new long term content agreements in the second half of the 2015 fiscal year.

Net loss for the second quarter of the 2016 fiscal year came in at INR 246 million, a 59.9% improvement over the second quarter of the 2015 fiscal year.

The Company added 0.57 million gross subscribers and 0.20 million net subscribers during the quarter. Gross subscribers totaled 14.27 million and net subscribers totaled 10.84 million as of September 30, 2015. Churn came in at 1.19% for the quarter and 0.84% for H1.

Capital Structure and Balance Sheet

During the quarter under review, the shareholders of the Company accorded their approval, subject to the receipt of the Ministry of Information and Broadcasting (MIB) approval and such other approvals as may be required, for issue and allotment of 23,360,000 Bonus equity shares credited as fully paid up to existing shareholders of the company on the date of contribution agreement and 3,999,984 Bonus equity shares of Rs. 10 each, credited as fully paid up, equivalent to 999,996 ADSs to Deutsche Bank Trust Company Americas, the Depository for the benefit of Global Eagle Acquisition LLC, the Sponsor. This is pending the necessary approvals from the MIB. Post issue, the Company will have 421,759,584 equity shares outstanding (Our 1ADSs is equivalent to 4 equity shares).

The company had gross debt of INR 24.86 billion and total cash and short term investments of INR 8.75 billion as of September 30, 2015.

Conference call dial in details

The results conference call time and details are provided below.


Call #1

Call #2

Date

October 21, 2015

October 21, 2015




Time

11:00 am India time

6:30 pm India time


1:30pm HK time

9:00pm HK time


6:30am UK time

2:00pm UK time


1:30am NYC time

9:00am NYC time




Dial in details



India

+91 22 6746 8349 / +91 22 3938 1074

+91 22 6746 8349 / +91 22 3938 1074

Hong Kong

800 964 448

800 964 448 / +852 3018 6877

Singapore

800 101 2045

800 101 2045 / +65 3157 5746

USA

1 866 746 2133 / +1 323 386 8721

1 866 746 2133 / +1 323 386 8721

UK

0 808 101 1573 / +44 20347 85524

0 808 101 1573 / +44 20347 85524

Pin code

Not required

Not required




Playback details



Dial in

+91 22 3065 2322 / +91 22 6181 3322

+91 22 3065 2322 / +91 22 6181 3322

Playback ID

52593

95182


Forward looking statements
This announcement may contain forward-looking statements, as defined in the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. In addition to statements which are forward-looking by reason of context, the words "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions identify forward-looking statements. We caution you that reliance on any forward-looking statement involves risks and uncertainties that might cause actual results to differ materially from those expressed or implied by such statements. These and other factors are more fully discussed in the Videocon d2h's registration statement on Form F-4 filed with the SEC and available at http://www.sec.gov. All information provided in this announcement is as of the date hereof, unless the context otherwise requires. Other than as required by law, Videocon d2h does not undertake to update any forward-looking statements or other information in this announcement.

Detailed Q2FY16 financial results (unaudited) are available on SEC web site and company web site ir.videocond2h.com

______________________________

1 Adjusted EBITDA is calculated after accounting for impact of Employee Stock Option Plan 2014 ("ESOP 2014") which amounted to Rs29.44 million

2 Market share is calculated based on MPA data and company estimates

3 Average Revenue Per User ("ARPU") is calculated after adding back distribution margin of approximately 5%

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SOURCE Videocon d2h Limited