 "RCom Q1 net profit down 33% on higher finance costs")
Reliance Communications on Thursday reported a 33.33 percent drop in its net profit at Rs 108crore for the first quarter ended June 30, 2013,weighed down by higher finance costs even as pricing power improved due to reduced competition.
The company had reported a net profit of Rs 162 crore inthe corresponding period last financial year.Total income rose marginally to Rs 5,315 crore for the
reported quarter as compared to Rs 5,264 crore for the sameperiod last year.
That was the fourth consecutive quarter of declining profits at the company, controlled by billionaire Anil Ambani, with profits falling in 14 of the last 16 quarters.
Reliance Communications, like its main rivals, has raised call prices in recent months after competition eased due to the exit of some smaller players, but its debt load has hurt its profitability.
[caption id=“attachment_1004867” align=“alignleft” width=“380”]  Reliance Communications, like its main rivals, has raised call prices in recent months after competition eased due to the exit of some smaller players, but its debt load has hurt its profitability.[/caption]
The company has sealed two deals to lease its mobile phone towers and fibre optic network to a 4G venture of Reliance Industries, leading to a 76 percent surge in Reliance Communications’ stock price so far this year.
Impact Shorts
More ShortsThe company said revenue per minute (RPM) increased to45.7 paisa, up 4 percent quarter-on-quarter.
“We have significantly improved RPM with tariff hikes andstrong focus on paid and profitable minutes,” RCom said in astatement.The wireless revenue stood at Rs 4,816 crore and wirelessEBITDA at Rs 1,314 crore for the reported quarter, a growth of4.1 percent and 6.6 percent,respectively (Q-on Q). Thecompany termed it as the highest revenue and EBITDA growth inthe past 3 years.
The company said it generated operational cash flow of Rs1,701 crore in the first quarter.
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