Den Networks reports 70.3% EBITDA decline while 1.2% Revenue growth
11-05-2015 • About Den Networks (
$DEN) • By InTwits
Den Networks reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Den Networks doesn't have a profitable business model yet: FY2015 ROIC is -4.0%
- EBITDA Margin is quite volatile: 7.3% in FY2015, 24.8% in FY2014, 22.5% in FY2013, 7.3% in FY2012, 13.2% in FY2011
- Den Networks has high CAPEX intensity: 5 year average CAPEX/Revenue was 32.6%. At the same time it's a lot of higher than industry average of 17.9%.
- CAPEX is quite volatile: 3,168 in FY2015, 5,840 in FY2014, 5,312 in FY2013, 1,414 in FY2012, 854 in FY2011
- The company has unprofitable business model: ROIC is at -4.0%
- It operates with high leverage: Net Debt/EBITDA is 6.0x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Den Networks ($DEN) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10,210 | 11,234 | 8,793 | 10,978 | 11,107 | 1.2% |
| EBITDA | 1,348 | 825 | 1,974 | 2,725 | 809 | -70.3% |
| Net Income | 375 | 143 | 623 | 384 | -1,440 | -475.1% |
Balance Sheet
|
|---|
| Cash | 2,684 | 2,976 | 2,834 | 2,470 | 1,504 | -39.1% |
| Short Term Debt | 788 | 680 | 3,465 | 2,558 | 2,950 | 15.3% |
| Long Term Debt | 785 | 1,902 | 4,010 | 4,464 | 3,380 | -24.3% |
Cash flow
|
|---|
| Capex | 854 | 1,414 | 5,312 | 5,840 | 3,168 | -45.7% |
Ratios
|
|---|
| Revenue growth | -22.4% | 10.0% | -21.7% | 24.8% | 1.2% | |
| EBITDA growth | 66.3% | -38.8% | 139.3% | 38.0% | -70.3% | |
| EBITDA Margin | 13.2% | 7.3% | 22.5% | 24.8% | 7.3% | -17.5% |
| Net Income Margin | 3.7% | 1.3% | 7.1% | 3.5% | -13.0% | -16.5% |
| CAPEX, % of revenue | 8.4% | 12.6% | 60.4% | 53.2% | 28.5% | -24.7% |
| ROIC | 9.2% | 2.7% | 8.1% | 5.6% | -4.0% | -9.6% |
| ROE | 4.9% | 1.8% | 7.4% | 2.8% | -8.1% | -10.9% |
| Net Debt/EBITDA | -0.8x | -0.5x | 2.4x | 1.7x | 6.0x | 4.3x |
Revenue and profitability
Den Networks's Revenue increased slightly on 1.2% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.2 pp from 14.4% to 9.2% in FY2015.
Net Income marign dropped on 16.5 pp from 3.5% to -13.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 28.5% in FY2015. CAPEX/Revenue jumped on 15.9 pp from 12.6% in FY2012 to 28.5% in FY2015. It's average level of CAPEX/Revenue for the last three years was 47.4%.The company maintained rich investment policy and has spent a lot to CAPEX (391% of EBITDA).
Return on investment
The company operates at negative ROIC (-3.97%) and ROE (-8.08%). ROIC decreased on 9.6 pp from 5.6% to -4.0% in FY2015. ROE dropped on 10.9 pp from 2.8% to -8.1% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 6.0x and Debt / EBITDA is 7.8x. Net Debt / EBITDA jumped on 4.3x from 1.7x to 6.0x in FY2015. Debt decreased on 9.9% in FY2015 while cash dropped on 39.1% in FY2015.
Management team
Shailender Nath Sharma is a Den Networks's CEO. Shailender Nath Sharma has spent 7 years at the company. Manish Dawar is a The company's CFO. Manish Dawar has spent 3 years at the company.
Appendix 1: Peers in Broadcasting & Cable TV
Below we provide Den Networks benchmarking against other companies in Broadcasting & Cable TV industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Balaji Telefilms ($BALAJITELE) | -53.5% | -2.3% | -1.0% | 119.1% | |
| Siti Cable Network ($SITICABLE) | -71.5% | 12.0% | 37.0% | 41.6% | |
| Hinduja Ventures ($HINDUJAVEN) | | 25.6% | 31.8% | 29.6% | 81.8% |
| B.A.G.Films & Media ($BAGFILMS) | -49.9% | 55.3% | 0.5% | 22.9% | |
| Zee Entertainment Enterprises ($ZEEL) | -48.4% | 0.6% | 21.7% | 18.6% | |
| |
|---|
| Median (9 companies) | -53.5% | 12.0% | 10.7% | 18.6% | 49.8% |
|---|
| Den Networks ($DEN) | | 10.0% | -21.7% | 24.8% | 1.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Entertainment Network (India) ($ENIL) | 21.9% | 32.1% | 30.8% | 32.4% | |
| Zee Entertainment Enterprises ($ZEEL) | 27.3% | 24.4% | 25.9% | 27.6% | |
| Dish Tv India ($DISHTV) | 17.8% | 25.5% | 27.3% | 26.4% | |
| Siti Cable Network ($SITICABLE) | 3.7% | 1.6% | 17.5% | 19.9% | |
| Hinduja Ventures ($HINDUJAVEN) | 22.5% | 27.7% | 21.0% | 18.2% | 54.7% |
| |
|---|
| Median (9 companies) | 16.6% | 18.6% | 17.5% | 18.2% | 32.9% |
|---|
| Den Networks ($DEN) | 13.2% | 7.3% | 22.5% | 24.8% | 7.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Siti Cable Network ($SITICABLE) | 10.2% | 10.6% | 80.9% | 73.0% | |
| Zee Media Corporation ($ZEEMEDIA) | 3.8% | 3.4% | 5.9% | 31.6% | |
| Hinduja Ventures ($HINDUJAVEN) | 8.8% | 11.6% | 65.8% | 14.2% | 7.1% |
| Dish Tv India ($DISHTV) | 70.0% | 33.5% | 32.2% | 11.9% | |
| Zee Entertainment Enterprises ($ZEEL) | 1.3% | 2.7% | 2.0% | 3.4% | |
| |
|---|
| Median (8 companies) | 6.7% | 3.5% | 4.1% | 7.7% | 5.6% |
|---|
| Den Networks ($DEN) | 8.4% | 12.6% | 60.4% | 53.2% | 28.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Zee Entertainment Enterprises ($ZEEL) | 21.6% | 21.1% | 24.2% | 25.5% | |
| Entertainment Network (India) ($ENIL) | 13.4% | 15.2% | 14.8% | 16.7% | |
| Raj Television Network ($RAJTV) | -9.1% | 10.1% | 10.3% | 11.5% | |
| Dish Tv India ($DISHTV) | -14.4% | -2.5% | -4.6% | 8.7% | |
| Zee Media Corporation ($ZEEMEDIA) | 11.9% | 18.8% | 11.9% | 5.2% | |
| |
|---|
| Median (12 companies) | -1.3% | 1.0% | 3.3% | 4.6% | 22.4% |
|---|
| Den Networks ($DEN) | 9.2% | 2.7% | 8.1% | 5.6% | -4.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hinduja Ventures ($HINDUJAVEN) | 0.8x | 0.7x | 5.9x | 5.6x | 1.1x |
| Siti Cable Network ($SITICABLE) | 23.2x | 56.0x | 9.5x | 5.6x | |
| Zee Media Corporation ($ZEEMEDIA) | -0.6x | 0.2x | 0.3x | 3.0x | |
| Dish Tv India ($DISHTV) | 2.1x | 2.1x | 2.6x | 2.0x | |
| Raj Television Network ($RAJTV) | | 0.6x | 0.7x | 1.6x | |
| |
|---|
| Median (9 companies) | 0.8x | 0.2x | 1.6x | 1.6x | 1.2x |
|---|
| Den Networks ($DEN) | -0.8x | -0.5x | 2.4x | 1.7x | 6.0x |
