Idea Cellular profit jumps 57%

Profit rises on the back of higher call rates and growth in data usage

Idea Cellular, India’s third largest telecom operator by subscriber base, has reported a 57 per cent jump in profit after tax at Rs 728 crore in the quarter ended June, beating analysts’ estimates. The company’s profit increased on the back of higher call rates and a 11.5 per cent growth in data usage.

In June 2013, Idea had reported profit after tax of Rs 462.7 crore.

Analysts had expected the Aditya Birla Group company, which is partly owned by Malaysia’s Axiata, to report profit of Rs 600-650 crore for the April-June quarter.

Idea Cellular’s revenue for the quarter rose to Rs 7,561 crore from Rs 6,538 crore in the year-ago quarter. The telecom operator’s earnings before interest, tax, depreciation and amortisation (Ebitda) rose 33.2 per cent to Rs 2,510.6 crore.

The telco’s voice minutes rose 5.2 per cent quarter-on-quarter, while minutes of usage rose to 401 minutes during the quarter from 397 minutes in the previous quarter. The company’s revenue market share has increased to 16.6 per cent.

Monthly average revenue per user, a metric to assess the financial health of a telecom operator, increased 4.6 per cent to Rs 181 during the quarter, against Rs 173 in the previous quarter. Average realisation per minute, which determines the profitability of a telecom operator, rose to 45.1 paise in the first quarter from 43.6 paise in the previous quarter.

Idea Cellular also said that it has reduced its net debt by Rs 5,208 crore to Rs 13,977 crore at the end of June 2014. The reduction of debt will help the firm buy spectrum in the upcoming auction as some of its licences are coming up for renewal in 2015-16.

“The company is well geared to meet all volatile, uncertain, complex, and ambiguous developments and remain on course of its mission to improve its market standing both in mobile voice and data business,” it stated.

The firm raised Rs 3,000 crore in June through a qualified institutional placement and Rs 750 crore by issuing equity shares to Axiata Investments 2 (India) Ltd, a wholly-owned subsidiary of Axiata Group of Malaysia. The company’s shares traded at Rs 139.75 apiece on the BSE on Monday, up one per cent from the previous close.
NETWORKING IT RIGHT

• Idea Cellular’s revenue for the quarter rose to Rs 7,561 crore from Rs 6,538 crore in the year-ago quarter
• The telecom operator’s Ebitda rose 33.2 per cent to Rs 2,510.6 crore