Mumbai: Reliance Communications, India’s second-biggest mobile phone carrier by subscribers, reported its fiscal fourth-quarter profit nearly doubled on sharply lower costs, in what is its first profit rise in 11 quarters.
Reliance Communications, controlled by billionaire Anil Ambani, said consolidated net profit jumped about 98% for the three months ended March from a year earlier, smashing street estimates, even as revenue fell nearly a third.
The market is however keenly watching for any progress in the company’s talks to raise funds through asset sales to cut its heavy debt load - $6.9 billion as of December - that has been a drag on its earnings in the past quarters.
Reliance Communications has been in talks with US buyout giants Blackstone and Carlyle to sell its telecoms tower arm in what could fetch it about $3 billion, sources have said, but a deal is yet to be sealed even after several months of talks.
Separately, Reliance Communications also expects to raise about $1 billion from a planned listing of its undersea cable assets in Singapore, sources have said.
Consolidated net profit rose to Rs 332 crore ($60 million) for the quarter ended March, from Rs 168 crore a year earlier, the Mumbai-based company said late on Saturday.
Revenue fell nearly a third from a year earlier to Rs 5310 crore. The year-ago quarter revenue had been boosted by an accounting change.
Analysts in a Reuters poll of brokerages had on average expected net profit of Rs 143 crore on revenue of Rs 5087 crore for the company, which had 153 million mobile customers at end-March.
Depreciation and amortisation for the quarter fell almost 73% from a year earlier to Rs 970 crore, lowering the total expenditure by more than a third. Reliance Communications said depreciation and amortisation in the year-ago quarter included a one-time adjustment due to the accounting change.
Interest costs more than doubled from a year earlier to Rs 579 crore.
Reliance Communications competes with 14 other rivals in India’s crowded telecoms market, which is the world’s second-biggest by subscribers but companies operate under wafer-thin margins as they offer some of the world’s cheapest call prices.