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RCom net dips

Reliance Communications has reported a 3.2 per cent dip in consolidated net profit for the fourth quarter ended March 2009, impacted by increased costs and several one-time charges.

Its wireless revenue showed a muted growth of eight per cent year-on-year as the company inducted some GSM subscribers under a promotional plan, which offered free minutes of usage for 90 days, Mr S.P. Shukla, President-Personal Business, said in a conference call with analysts.

Total expenditure for the quarter shot up by 29.7 per cent to Rs 4,883 crore, against Rs 3,764.3 crore reported in the year ago quarter.

Profit from operations, excluding financial charges, and one-time items, slumped by 38 per cent, to Rs 915 crore (Rs 1,486 crore).

Financial charges for the quarter rose from Rs 8 crore to Rs 168 crore. Amortisation of compensation under its ESOP programme cost the company Rs 157 crore during the quarter.

It has reported a 10.7 per cent dip in wireless average revenue per user to Rs 224 from Rs 251 reported in the previous sequential quarter.

The company had followed Schedule VI of the Companies Act instead of Accounting Standard 11 in the matter related to forex fluctuations with respect to liabilities and borrowings for acquisition of fixed assets, since it had funded its capex initiatives primarily by long-term borrowings in foreign currency convertible bonds.

Had the company followed AS-11, its net profit would have been lower by Rs 471.9 crore for realised and Rs 322.4 crore for unrealised currency fluctuations during the quarter, said the company’s notes to the accounts.

This could exclude an amount of Rs 319.03 crore on FCCBs if the bonds are converted on or before their due dates.

(Pursuant to the amendment of schedule 6 with effect from March 31, 2009, RCom has adopted the accounting restatement according to AS11.)

For the full year, the company has reported a 9.3 per cent rise in net profit to Rs 5,907. 5 crore (Rs 5,401.1 crore). Revenues went up by 18 per cent to Rs 22,234.6 crore (Rs 18,827.4 crore).
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