Reliance Comm profit plunges on finance costs
NEW DELHI (Reuters) - Reliance Communications Ltd (RLCM.NS) reported a larger-than-expected 60 percent drop in quarterly profit, dragged down by the cost of its debt.
Consolidated net profit at the country's No.3 mobile phone carrier by customers fell to 1.02 billion rupees for its financial second quarter through September from 2.52 billion a year earlier.
A jump in finance charges including interest costs hurt the company's net profit, Gurdeep Singh, chief executive of Reliance Communications' wireless business, said in a phone interview.
He said the company, controlled by billionaire Anil Ambani, saw key operating metrics such as average revenue per user improving quarter on quarter.
Saddled with net debt of $6.4 billion as of June, more than five times its annual operating profit, Reliance Communications has so far failed to raise funds through selling stakes in its units.
A planned sale of its telecommunication tower unit that had been expected to raise about $3 billion has dragged on for more than two years. In July, Reliance Communications was forced to shelve a Singapore public offering of its undersea cable unit due to weak investor demand.
Reliance Communications and its main rivals Bharti Airtel (BRTI.NS) and Vodafone's (VOD.L) local unit are seen benefiting from a court order to revoke the permits of several smaller carriers which will shrink competition in a market that once boasted more than a dozen players.
But the bigger carriers, including Reliance Communications, face the risk of additional regulatory fee payouts as India's cabinet earlier on Thursday approved a surcharge on airwaves these companies already hold.
Reliance Communications, which had been the most aggressive among its rivals to cut call prices, in September raised prices by a quarter in a bold move as it saw competition tapering off.
Finance costs more than doubled to 5.93 billion rupees in the September quarter from 2.59 billion rupees a year earlier, Reliance Communications said in a filing to stock exchanges.
Revenue rose 3.2 percent from a year earlier to 52.02 billion rupees. Analysts had expected the company to report a net profit of 1.64 billion rupees on revenue of 52.75 billion rupees, according to Thomson Reuters I/B/E/S.
Monthly average revenue per user rose to 102 rupees for the September quarter from 98 rupees in the previous three months, Singh said. Average usage per user grew to 236 minutes from 228 minutes in the previous quarter, while average realisation per minute was stable at 43 paisa, he said.
A paisa is 1/100th of a rupee.
Shares in Reliance Communications, valued at $2.2 billion, closed 1.4 percent higher ahead of the earnings announcement. The stock is down 16 percent this year, underperforming the benchmark Mumbai index, which is up 22 percent.
(Editing by Erica Billingham)
- Tweet this
- Share this
- Digg this
- Boxer Sarita Devi faces action after refusing medal at Asian Games
- Boxer Sarita Devi showed lack of sportsmanship, say organisers
- UPDATE 8-Dallas Ebola patient vomited outside apartment on way to hospital
- Appointment of Arvind Subramanian as chief economic adviser hits Modi hurdle
- Amazon to sell packaged food and beverages in India - Economic Times
BACK IN JAIL
Subrata Roy, the jailed chief of India's Sahara conglomerate, is back in a cell after living in a makeshift prison office for two months as he tried to negotiate the sale of his luxury hotels, a jail official said. Full Article