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Lower revenues hit VSNL net


Our Bureau

MUMBAI, July 27

VIDESH Sanchar Nigam Ltd has ended the first quarter of the financial year with a 4.5 per cent fall in net profit at Rs 365.5 crore, compared with the net profit of Rs 382.9 crore of the previous corresponding quarter.

Net sales also diminished by more than 10 per cent to Rs 1,528.3 crore (Rs 1,701.8 crore), while total income fell 11.5 per cent to Rs 1,642.1 crore (Rs 1,857 crore).

The company said the lower figures were chiefly due to falling total accounting rates (TAR) for international telephony (which accounts for nearly 90 per cent of sales income), and non-inclusion of revenues from Intelsat which was corporatised effective this year.

Revenues from telephony fell 11 per cent, due to a 27 per cent to 28 per cent decrease in total accounting rates. Although traffic volumes grew 16.43 per cent, it only partially compensated for fall in total accounting rates.

The sales for the first quarter of the previous year also included Rs 21.1 crore received from Intelsat as revenue. Due to corporatisation of Intelsat effective this financial year, no such revenue has been received, said the company. Income from Intelsa t will henceforth be received as dividend.

Total expenditure amounted to Rs 1,109 crore (Rs 1,260.6 crore); with depreciation at Rs 30.7 crore (Rs 26.5 crore). Gross profit at Rs 501.5 crore (Rs 569.9 crore) decreased by 12 per cent. Provision for taxation amounted to Rs 158.9 crore (Rs 182.1 cro re).

Falling tariffs have affected VSNL earnings over some time now. Sales for the quarter ended March 31, 2001 amounted to Rs 1,997.7 crore (Rs 2,005.8 crore). However, the company ended with a higher net of Rs 447.3 crore (Rs 311.9 crore).

The VSNL Chairman and Managing Director, Mr S.K. Gupta, said the company was changing its basic business profile from that of an international telephony carrier to a complete communications solutions provider by increasing revenues from value-added servi ces from 9.75 per cent the previous corresponding quarter, to 11.9 per cent currently.

The VSNL scrip closed at Rs 264.5 per share on the BSE, lower than yesterday's close of Rs 271.2 per share. The scrip had already been battered on the exchange, falling more than 10 per cent recently when the Bharti-SingTel group pulled out of the race f or bidding for 25 per cent stake in the Government-owned company.

Related links:
Bharti-Singtel logs out of VSNL race
VSNL scrip falls on Bharti-SingTel news

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