Anil Ambani-led Reliance Communications Ltd reported a sharper-than-expected 60 percent decline in quarterly profit as the country's No.3 mobile phone carrier by customers struggles with its heavy debt load.
Consolidated net profit fell to 1.02 billion rupees ($19 million) for its fiscal second quarter ended September, from 2.52 billion rupees reported a year earlier, Reliance Communications, controlled by billionaire Ambani, said in a statement on Thursday.
Analysts had expected the company to report a net profit of 1.64 billion rupees.
Shares in Reliance Communications, valued at $2.2 billion, closed 1.4 percent higher ahead of the earnings announcement. The stock is down 16 percent this year, underperforming the benchmark Mumbai index that is up 22 percent.
($1 = 54.0650 Indian rupees)
Company INFO More on Reliance Communications
RCom Q2 net dips by 59.5 per cent at Rs 102 crore
(PTI) Reliance Communications today reported a 60 per cent drop in its consolidated net profit at Rs 102 crore for the second quarter ended September 30.
The company had posted a net profit of Rs 252 crore in the corresponding period last fiscal.
RCom President and Chief Executive Officer for Wireless Business Gurdeep Singh said that profit after tax of the company is mainly down due to interest outgo on money the firm had borrowed to buy 3G spectrum two years ago.
The total income from operations increased by 4.98 per cent at Rs 5,031 crore for the July-September 2012 quarter compared to Rs 4,792 crore it registered during the corresponding period a year ago.
During the quarter, RCom raised pre-paid tariffs by 25 per cent across GSM and CDMA platforms.
"This decision is in line with our aim of maintaining a healthy RPM (revenue per minute) and improving average margin per user. We expect the full revenue impact of the tariff hike to reflect by next financial year," the company said in a statement.
RCom said its 3G customer based increased to 4.8 million and company now has over 26 million customers using data (internet) services.
"Rationalisation of 3G tariff has helped in uptake," Singh said.
Singh said that average revenue that company earns from its subscribers has reached Rs 102 crore.
RCom's subscriber base reached 13.48 crore at the end of September 2012.
Shares of the company closed at Rs 58.55 apiece, up by 1.3 per cent at BSE today.