Rel Comm Q1 disappoints; profit falls 22%, MOU drops 2.9%

Consolidated operating profit (earnings before interest, tax, depreciation and amortisation) dropped 7.5 percent quarter-on-quarter to Rs 1,827 crore and margin declined 134 basis points to 33.3 percent in the quarter ended June against forecast of Rs 1,983 crore and 35.1 percent, respectively.

Indian operations' earnings before interest and tax (EBIT) jumped 16.3 percent to Rs 833 crore crore but global operations' EBIT plunged 74 percent to Rs 69 crore on sequential basis, said the company in its filing to the exchange.

Other income in Q1 shot up 5.3 times quarter-on-quarter to Rs 48 crore. Finance cost increased 5.7 percent to Rs 704 crore but tax expenses fell 97 percent to Rs 9 crore (Rs 306 crore) quarter-on-quarter.

Key performance indicators

Revenue per minute increased marginally to 44.5 paisa in June quarter against 44.4 paisa in March quarter, which was better than expectations of 43.5 paisa. However, average revenue per user (ARPU) dropped 4.8 percent quarter-on-quarter to Rs 140 crore, (which was lower than forecast of Rs 143).

Total minutes of usage also missed estimates, down 2.9 percent sequentially to 105 billion minutes. Analysts had estimated at 110.5 billion minutes.

Shares of Reliance Communications (which announced earnings post market hours) closed at Rs 60.90, up Rs 0.50, or 0.83 percent on the BSE.Posted by Sunil Shankar Matkar