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Business News/ Companies / R-Com Q4 profit nearly halves as costs rise
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R-Com Q4 profit nearly halves as costs rise

Net profit falls 48.5% to `156 crore in the three months ended 31 Mar from `303 crore in the year-ago period

R-Com incurred a tax expenditure of Rs1026 crore in the quarter, while total expenses were up 16% at Rs5586 crore compared to a year ago. Photo: MintPremium
R-Com incurred a tax expenditure of Rs1026 crore in the quarter, while total expenses were up 16% at Rs5586 crore compared to a year ago. Photo: Mint

Mumbai: Reliance Communications Ltd (R-Com), India’s fourth largest mobile-phone services provider by subscribers, said on Friday that its fourth-quarter profit fell by almost half because of a surge in costs.

The company, a part of Anil Ambani’s Reliance Group, said net profit fell 48.5% to 156 crore in the three months ended 31 March from 303 crore a year earlier. Revenue increased 5% from a year ago to 5,405 crore in the quarter.

A Bloomberg poll of analysts had pegged R-Com’s profit at 169.5 crore and revenue at 5529.6 crore.

The company’s profit in the year-ago period had been lifted by a one-off gain. Finance costs increased 21% to 907 crore. Total expenses were up 16% at 5,586 crore compared with a year ago. The company incurred a tax expenditure of 1,026 crore in the quarter.

“In the same period last year, there was a one-time income of about 550 crore due to some provision in business restructuring, which had impact on performance in that period. Otherwise, business is as usual," R-Com’s chief executive officer for the consumer business Gurdeep Singh told PTI.

On a sequential basis, R-Com’s revenue was up 4.8% and net profit was up 44%.

Shares of R-Com lost 0.41% to close at 122 per share on Friday on BSE, while the benchmark Sensex lost 0.06% to 22,403.89 points. The results were announced after trading ended for the day.

Market leader Bharti Airtel Ltd’s net profit surged 89% in the March quarter. Idea Cellular Ltd, India’s third largest mobile phone services provider by revenue and market share, reported a net profit increase of 91%. Both reported a surge in data traffic.

“The key performing indicators for R-Com are decent...Overall other players like Idea and Bharti are better placed than R-Com at present," said Ankita Somani, a telecom sector analyst at Angel Broking Pvt. Ltd.

Data traffic on R-Com’s network grew 20.5% compared with the previous quarter to 50.25 billion megabytes (MB), and data usage per subscriber improved 14.9% to 455MB. The traffic has increased due to increase in data subscribers and higher data usage per customer, the company said in a statement.

Average revenue per user (Arpu) rose 2.4% to 128 and revenue per minute was stable at 43.2 paise. R-Com’s Arpu for the quarter was lower than that of Idea Cellular and Bharti Airtel. In the quarter the total data customer base grew 3.3% sequentially to 37.4 million including 12.9 million 3G customers.

For the full year, R-Com reported a net profit of 1,047 crore, an increase of about 56%, on revenue of 22,321 crore, up 2.5%.

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Published: 02 May 2014, 06:24 PM IST
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