Reliance Communications net up sixfold on write-back

Higher call tariffs and reduced competition led to the first gain in five quarters

Anil Ambani-led Reliance Communications on Tuesday posted a sixfold increase in second quarter net profit at Rs 675 crore against Rs 102 crore in the same quarter last year. Most of the increase is due to a provisional writeback of Rs 441 crore, on account of business restructuring. Excluding the write-back, R-Comm's profit was up 1.3 times at Rs 234 crore, mostly because of the benefits of outsourcing 10,000 employees. Revenue was up 12 per cent at Rs 5,835 crore against Rs 5,202 crore in the same quarter last year.

Operating earnings before interest, taxes, depreciation and amortisation (Ebitda) was up 15.2 per cent at Rs 1,887 crore against Rs 1,638 crore. The dual-technology operator's Ebitda margin was 35 per cent in the quarter. The company said the margin was among the highest in the industry.

Revenue per minute (RPM) is 43.4 paise, up 7.7 per cent from last year. Average revenue per user also increased 26 per cent at Rs 120. Total minutes of use, however, was down 1.7 per cent because of a traditionally weak second quarter.

“The total data traffic went up 116 per cent from last year. The traffic increased due to increase in data subscribers and higher data use per customer. The total data customer base has grown 30.8 per cent to 34 million, which includes 9.1 million 3G customers,” R-Comm said.

RCom also generated operational cash flow (EBITDA) of Rs 2,328 crore, and paid net finance charges of Rs 676 crore. It also invested Rs 364 crore on capex during the quarter. “It remains free cash flow (FCF) positive and this is expected to continue,” the company said.

RCom's stock went down seven% in today's trade, before the announcement of results, to close at Rs 129.