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Reliance Communications Ltd, India's fourth-biggest cellular carrier, reported a surge in quarterly net profit, smashing analysts' estimates, lifted by higher call tariffs and reduced competition.
The Mumbai-based Reliance Communications Ltd, controlled by billionaire Anil Ambani, said consolidated net profit was 6.75 billion rupees ($106.7 million) for its fiscal second quarter to Sept. 30, helped by a provision write-back of 4.41 billion rupees.
Excluding the write-back, net profit was 2.34 billion rupees, higher than analysts' estimate of 1.46 billion rupees on average. Profit rose for the first time in five quarters.
Reliance Communications Ltd had posted a net profit of 1.02 billion rupees in the year-earlier period.
Reliance Communications is the most-leveraged listed phone carrier in India and profits had fallen in 14 of the 16 quarters to end-June, mainly due to high financing costs.
($1 = 63.2750 rupees)
Reliance Communications net profit up six-fold to Rs 675 crore in Sept quarter
(PTI) Reliance Communications today reported over six-fold jump in its net profit at Rs 675 crore for the quarter ended September 30, 2013.
The company had reported a net profit of Rs 102 crore in the corresponding period last financial year, the company said in a statement.
Total income from operations rose 6.55 per cent to Rs 5,361 crore for the reported quarter as compared to Rs 5,031 crore for the same period last year.
Reliance Communications said the net profit includes Rs 441 crore from a write back provision.
"The company has, during the quarter, reassessed the requirement of maintaining balance of Rs 441 crore of provision for business restructuring created pursuant to the schemes of amalgamation approved by High Court in financial year
2006-07 and as determined by the board, credited to other income as no longer required," it said.
The employee cost of Reliance Communications also declined to Rs 224 crore for the reported quarter as compared to Rs 344 crore in the same period last year.
The company said it remains free cash flow (FCF) positive and this is expected to continue.
"Reliance Communications generated operational cash flow (EBITDA) of Rs 2,328 crore in Q2, paid net finance charges of Rs 676