RCom's Q3 net profit plummets 61 % as debt costs weigh
11 Feb 2012
Reliance Communications (RCom), India's second-biggest mobile phone operator, plunged 61 per cent to Rs186 crore for the October-December quarter compared to Rs480 crore in the previous year's period, thanks to higher debt costs.
This is the 10th straight quarter of decline for Anil Ambani's flagship company, as average revenues per user (ARPU) stayed flat at 0.45 paise.
Reliance follows bigger rival Bharti Airtel in reporting earnings that fell short of expectations after phone usage slowed and costs increased.
Reliance, which spent 85.9 billion rupees in 2010 at auctions to buy airwaves for third-generation services, is refinancing foreign-currency loans to extend their maturity.
Operating profit or EBITDA fell to Rs1,610 crore from Rs1,670 crore a year earlier, while the EBITDA margin declined to 31.9 per cent from 33.3 per cent.
Net sales fell to Rs4,824 crore from Rs4,865 crore a year earlier; while financial charges almost tripled to Rs378 crore in the third quarter.