Tuesday, May 18, 2010

Reliance Communications Q4 Results: Profit Falls around 16%

With pressure of competition visible on revenues and margins, RCom witnessed 6% sequential drop in revenue to Rs 4992 crore in Q4 FY10. The OPM also dipped by 370 bps sequentially to 30.1% mainly due to increase in access charges (increased 220 bps Q-o-Q to 12.6%) and other expenses (280 bps increase to 14.6%), partly offset by 110 bps drop in network operation cost to 30.6%. The PBIT dipped across all the segments as the PBIT in wireless, global and broadband business came down by 10%, 27% and 14% respectively on Q-o-Q while in others segment the loss has mounted up further. The resultant operating profit was down 16% Q-o-Q to Rs 1500.82 crore. The ARPU dipped 8% Q-o-Q to Rs 139 per user and minutes of usage per user came down 4% Q-o-Q to 318 minutes resulting in drop in revenue per minute by 1 paisa to 44 paisa.

Higher other income (286% higher Q-o-Q at Rs 101.17 crore) and net finance income (including undisclosed exchange gain) at Rs 813.40 crore (Rs 407.55 crore in Q3 FY10), boosted the profitability of the company as even after considering about 211.70 crore EO loss (including Rs 210 crore impairment loss in Flag Telecom), the PAT after minority interest and share of associates stood 10% higher Q-o-Q to Rs 1219.50 crore.

For FY10, the company registered 3% drop in revenue to Rs 21496 crore. In wireless business, the revenue was down 4% Y-o-Y to Rs 16640 crore. The OPM dipped 590 bps Y-o-Y to 33.4% as a combined effect of increase in access charges and staff cost. The resulted operating profit stood 18% lower at Rs 7185 crore. The PAT (after minority interest and share of associates) stood at Rs 4655 crore, down 23% Y-o-Y.

The company has added 8.62 million wireless subscribers during the quarter (7.68 in sequential quarter) with total subscriber base crossing 100 million mark to 102.42 million.

The company has not recognized mark-to-market (MTM) gains of Rs 191.74 crore on valuation of derivative contracts outstanding at the end of March 2010. Otherwise the net profit would have been higher by the same amount.


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