Idea Q4 Net Falls 39%, But Beats Es­ti­mates Con­sol­i­dated net for Jan-Mar quar­ter dips to 575.6 cr from 941.8 cr a year ago

.₹ .₹

The Economic Times - - Companies: Pursuit Of Profit - Our Bureau

New Delhi: Idea Cel­lu­lar posted a 39% fall in con­sol­i­dated fourth-quar­ter net profit, hurt by higher in­ter­est and spec­trum costs, al­though im­proved voice and data pric­ing helped the com­pany to beat earn­ings es­ti­mates.

Net profit fell to .₹ 575.6 crore in the Jan­uary-March quar­ter from .₹ 941.8 crore a year ear­lier and .₹ 764.2 crore in the Oc­to­ber-De­cem­ber pe­riod. Reuters ex­pected earn­ings at .₹ 527 crore. Profit was also af­fected by a cut in in­ter­con­nect charges and a cap on roam­ing rates.

Rev­enue for In­dia’s No. 3 car­rier in­creased al­most 13% to .₹ 9,483.9 crore, mainly on the back of a 184-mil­lion sub­scriber base and an in­crease in re­alised rates on both voice and data ser­vices.

Af­ter six quar­ters of de­clin­ing voice and mo­bile data re­alised rates, Idea cut pro­mo­tional of­fers for new and ex­ist­ing cus­tomers, im­prov­ing its voice rate by 4.4% and data by 2.9% se­quen­tially, the com­pany said on Thurs­day.

Growth in earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (Ebitda) was 38.1% com­pared with 34.7% in the pre­vi­ous quar­ter.

“Profit has fallen in spite of a 16% Ebitda growth be­cause of amor­ti­sa­tion im­pact from spec­trum re­newals and the full ac­count­ing of the sec­ond car­rier on 3G in some cir­cles,” man­ag­ing di­rec­tor Hi­man­shu Ka­pa­nia told ET in an in­ter­view af­ter the re­sults.

“It has be­come more important for tele­com com­pa­nies to man­age items be­low the (Ebitda) line and the per­cep­tion that this is a highly prof­itable busi­ness needs to be seen in this con- text,” he added.

Quar­terly in­ter­est and fi­nance cost surged to .₹ 767.8 crore from .₹ 105.2 crore a year ago, mainly on debt taken to fi­nance buy­ing air­waves in the 2015 auc­tion. De­pre­ci­a­tion and amor­ti­sa­tion ex­penses jumped to .₹ 1,973.7 crore from .₹ 1,487.7 crore.

The Aditya Birla Group com­pany, al­most a fifth owned by Malaysia’s Ax­i­ata, said it plans to spend .₹ 6,500-7,000 crore in the cur­rent fi­nan­cial year, ex­clud­ing the cost of new spec­trum that may be ac­quired and the as­so­ci­ated ex­pen­di­ture.

Av­er­age rev­enue per user (ARPU) in­creased to .₹ 179 from .₹ 176 in the pre­vi­ous quar­ter, while voice ARPU rose by .₹ 4 se­quen­tially — both pa­ram­e­ters ex­pand­ing af­ter suc­ces­sive quar­ters of con­trac­tion.

Idea re­it­er­ated that wire­less broad­band con­sumer de­mand growth is slower than in­creased sup­ply from op­er­a­tors launch­ing or ex­pand­ing 3G and 4G foot­prints, which is in­creas­ing com­pet­i­tive in­ten­sity.

Data as a per­cent­age of ser­vice rev­enue fell a tad to 20.1% from 20.2% in the pre­vi­ous quar­ter. To­tal data volume was 82,236 mil­lion MB, up from 80,994 mil­lion MB, with the pace of growth sharply slower than pre­vi­ous quar­ters.

Idea ended the quar­ter with 44 mil­lion data cus­tomers, up from 41.4 mil­lion in the pre­vi­ous three-month pe­riod. It is try­ing to at­tract pre­mium 4G cus­tomers, hav­ing launched ser­vices in 10 cir­cles so far. “As of 31 March 2016, over 680,000 Idea cus­tomers are ac­tively us­ing the 4G ser­vices,” Idea said.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.