The Hindu Business Line : Reliance Comm Q1 net up at Rs 513 cr

Reliance Communications Ltd announced a consolidated net profit of Rs 513 crore for the quarter ended June 30, 2006, its first full quarter after it was listed on the exchanges.

This is against a net loss of Rs 250 crore a year ago, said a statement from the company summarising the pro-forma results. (Reliance Communications received approvals a week ago for the name change; earlier it was Reliance Communications Ventures Ltd.)

Revenues up 42%

Revenues for the quarter increased 42 per cent to Rs 3,250 crore (Rs 2,283 crore). Revenues from free incoming lifetime plans had been deferred over a period of 48 months, as a conservative measure, said the statement.

Earnings before interest, depreciation and taxation were around seven-fold higher, at Rs 1,206 crore (Rs 159 crore).

"Driven by a strong focus on improving product portfolio and on driving cost efficiencies, we achieved significant growth in profitability," said the statement.

The results relate to Reliance Communications and its operating companies Reliance Infocomm Ltd, Reliance Communications Infrastructure Ltd, Reliance Telecom Ltd and FLAG Telecom Ltd.

The numbers were prepared as if the proposed corporate reorganisation had been implemented for the quarter, said the statement. The company's scrip gained on the bourses. It closed on Monday at Rs 262.75, gaining by Rs 4.15 or 1.6 per cent over the previous close.

While Reliance Infocomm and Reliance Infrastructure were formally merged with the company around ten days ago, FLAG and Reliance Infrastructure are still fully owned subsidiaries.

The profitability shown by Reliance Communications in the quarter was across all its businesses, including wireless, broadband and global, said the statement.

Wireless segment market share at 20%

The wireless segment reported 22.52 million customers, representing a market share of 20.6 per cent. Revenues from this segment amounted to Rs 2,432 crore. The global business reported an EBITDA margin of 23 per cent. The company's broadband business reported the number of access lines at 2.56 lakh and EBITDA margins at 38.8 per cent.

The company provided Rs 15 crore on a conservative basis during the quarter to meet the cost of verification of subscribers, as may be required now by the regulatory authorities. "The company estimates the cost of such an exercise in a full year at Rs 60 crore," said the release.

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