REUTERS – Reliance Communications(RLCM.NS), India’s second-biggest mobile phone carrier by subscribers, reported its fiscal fourth-quarter profit nearly doubled on sharply lower costs, in what is its first profit rise in 11 quarters.
The company, controlled by billionaire Anil Ambani, said consolidated net profit jumped about 98 percent for the three months ended March from a year earlier, smashing street estimates, even as revenue fell nearly a third.
The market is however keenly watching for any progress in the company’s talks to raise funds through asset sales to cut its heavy debt load — $6.9 billion as of December — that has been a drag on its earnings in the past quarters.
Reliance Communications has been in talks with U.S. buyout giants Blackstone (BX.N) and Carlyle CYL.UL to sell its telecoms tower arm in what could fetch it about $3 billion, sources have said, but a deal is yet to be sealed even after several months of talks.
Separately, Reliance Communications also expects to raise about $1 billion from a planned listing of its undersea cable assets in Singapore, sources have said.
Consolidated net profit rose to 3.32 billion rupees for the quarter ended March, from 1.68 billion rupees a year earlier, the Mumbai-based company said late on Saturday.
Revenue fell nearly a third from a year earlier to 53.10 billion rupees. The year-ago quarter revenue had been boosted by an accounting change.
Analysts in a Reuters poll of brokerages had on average expected net profit of 1.43 billion rupees on revenue of 50.87 billion rupees for the company, which had 153 million mobile customers at end-March.
Depreciation and amortisation for the quarter fell almost 73 percent from a year earlier to 9.7 billion rupees, lowering the total expenditure by more than a third. Reliance Communications said depreciation and amortisation in the year-ago quarter included a one-time adjustment due to the accounting change.
Interest costs more than doubled from a year earlier to 5.79 billion rupees.
Reliance Communications competes with 14 other rivals in India’s crowded telecoms market, which is the world’s second-biggest by subscribers but companies operate under wafer-thin margins as they offer some of the world’s cheapest call prices.
(Reporting by Devidutta Tripathy and Anurag Kotoky in NEW DELHI; editing by Keiron Henderson)
