RCom net falls 43% on finance costs

Anil Ambani’s Reliance Communications (RCom) saw a 43.5 per cent decline in consolidated third quarter net profit to Rs 105 crore, from Rs 186 crore in the same quarter last year.

According to Thomson Reuters, analysts had expected the company to report a net profit of Rs 183 crore.

“This is due to increase in finance charges for refinancing foreign currency convertible bonds (FCCBs) with interest-bearing loans,” said Gurdeep Singh, president and chief executive officer of the wireless business at RCom. Net debt was Rs 37,361 crore.

The company refinanced a tranche of FCCBs worth $1.1 billion in February last year. It had also re-financed yet another worth $500 million in May 2011.

Total income grew five per cent to Rs 5,301 crore, from Rs 5,055 crore in the same quarter last year. Earnings before interest, taxes, depreciation and amortisation (Ebitda) grew 2.4 per cent. The company says its Ebitda margin at 31.2 per cent is among the highest in the sectory. “This is with strong contribution from both the wireless and global enterprise business,” it stated.

RCom’s revenue per minute or RPM was 44 paise. “We have successfully achieved RPM stability for 11 consecutive quarters, amidst increasing competition and oversupply of minutes in the market place,” it said.

On a quarter-on-quarter basis, average revenue per user increased 17 per cent to Rs 119. Minutes of usage went up 15 per cent to 271 minutes per user per month.

The company has around 27.6 million data customers. Of these, 6.1 million use their third-generation (3G) services. “The total data traffic at 22,512 tera bytes and data usage per subscriber at 280 mb, are the highest in the industry,” it claimed.

RCom’s stock traded flat in on Wednesday’s trade, going up 0.6 per cent to close at Rs 88 a share, showed data on the Bombay Stock Exchange.