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
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.