Reliance Communications Q4 net up 47%, beats forcasts
Wednesday, 30 April , 2008, 14:50
Last Updated: Wednesday, 30 April , 2008, 15:10
New Delhi: Reliance Communications, India's No 2 mobile operator, beat forecasts with a 47 per cent jump in quarterly net profit as it added more users in the world's fastest-growing wireless market, sending its shares up 2 per cent.
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India overtook the United States as the biggest market for wireless services after China, with a record 10.2 million people signing up for mobile phones in March.
Local call tariff of as low as U.S. 1 cent a minute and availability of cheaper handsets has seen India's mobile phone users soaring 25 times between 2002 and 2007.
Yet, only 22 per cent of India's more than a billion people own mobile phones and operators have started expanding to smaller towns and to rural areas where 70 per cent of the people live.
Reliance Communications, part of the Anil Dhirubhai Ambani Group, added 4.8 million mobile users between January and March taking its total to 45.8 million subscribers.
The company, which lags leader Bharti Airtel, said on Wednesday net profit rose to 15.03 billion rupees ($372 million) in the fiscal fourth quarter ended March 31 from 10.24 billion reported a year earlier.
"We are confident of improved performance in the future," Chairman Anil Ambani said in a statement.
Earnings before interest, tax, depreciation and amortization (EBITDA), a key performance gauge, rose 41.7 per cent to 23.16 billion rupees, while EBITDA margins rose to 43.6 per cent from 41.5 per cent in the year-ago quarter.
Revenue rose to 53.11 billion rupees from 39.37 billion.
A Reuters poll of 10 analysts had forecast net profit of 13.31 billion rupees on sales of 52.58 billion.
Most of Reliance's users are on CDMA platform and Reliance is expanding the popular GSM-based services to all 23 service areas from the current 8 circles.
Ambani said in January the company would spend about $6 billion in the year to March 2009 as it expands its GSM network and builds mobile phone towers, on the top of a $5.3 billion investment in fiscal 2008.
For the full year ended March, profit rose 70.8 per cent to 54.01 billion rupees on revenue of 190.68 billion, the company said.
Bharti Airtel last week reported a forecast-beating 37 per cent rise in quarterly net profit to 18.53 billion rupees. Bharti had almost 62 million mobile users at end-March, a third more than Reliance's.
Shares in Reliance Communications were up 2.1 per cent at 586.60 rupees by 0751 GMT in a Mumbai market that was down 0.1 per cent. Bharti was up 1 per cent at 910.70 rupees.
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Reliance Communications shares lost 32 per cent between January and March, underperforming the main index that fell 23 per cent.
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