Idea net dips 32%

The Aditya Birla group company, Idea Cellular, has reported a 32 per cent dip in consolidated net profit for the first quarter at Rs 201 crore, as compared to Rs 297 crore in the same quarter last year. The company's revenues, however, went up 22.7 per cent to Rs 3,654 crore from Rs 2,976 crore in the first quarter of last financial year.

The company's average revenue per user (ARPU), too, has fallen by 21.5 per cent to Rs 182 from Rs 232 in the the corresponding quarter last year. Ebitda margins fell to 24.3 per cent from 28.9 per cent.

Idea claims that the forthcoming quarters could yield better results. “The decline in ARR (average realised rate) was greater in the earlier quarters. The rate of decline has softened now. This points to stability, going ahead,” said Sanjeev Aga, MD. On a quarter-on-quarter basis, the average realised rate of the company has fallen by 5.4 per cent to 44 paise per minute.

“In spite of fall in margins and cash losses on account of new launches, our cash profits have been stable in Rs 700-800 crore range,” Aga said. This quarter, its cash profits stood at Rs 778 crore.

The telecom operator, which has recently started operations in seven new circles, is also investing in network, technology and management processes. It has also won 3G licences in 11 new circles in an auction, and plans to roll out by December this year.

Idea would incur network expenses on account of these rollouts as well. The capital expenditure for 2010-11 would account to as much as Rs 4,000-4,400 crore for both 2G and 3G expenses. This does not include the payment made for 3G licences.

Idea's net borrowings stand at Rs 9,700 crore. It raised new loans to the tune of Rs 3,600 crore for 3G licence payment. “We have sourced Rs 2,100 crore from the surplus funds we had for 3G licence expenses,” said Akshay Moondra, CFO, Idea Cellular. After these borrowings, the company still has credit lines in excess of $1 billion (Rs 4,730 crore).