The Hindu Business Line : RCom net rises 17%

Mumbai, Oct. 31 Reliance Communications has reported a 17.3 per cent rise in net profit for the second quarter ended September 2008, as revenues rose across business segments. However this is the lowest profit growth in several quarters for the Anil Ambani-group company.

The company’s net profit for the quarter stood at Rs 1,531 crore, against Rs 1,305 crore in the same quarter a year ago.

The company had followed Schedule VI of the Companies Act, instead of Accounting Standard 11 for related to forex fluctuations with respect to liabilities and borrowings for acquisition of fixed assets.

Had the company followed AS-11, its net profit would have been lower by Rs 284 crore for realised and Rs 1,451 crore for unrealised currency fluctuations during the quarter, said the company’s notes to the accounts.

The city-based firm reported a revenue growth of 23.3 per cent at Rs 5,645 crore from Rs 4,579 crore.

While the company’s broadband business grew by 37.8 per cent, its wireless and global practices recorded growth of 16.5 and 28.6 per cent respectively

The company is pursuing aggressive capex plans, which are being funded primarily through long-term borrowings and foreign currency convertible bonds. “The current fiscal year represents the peak of our capex cycle,” Mr Anil Ambani, Chairman, told analysts in a conference call here on Friday.

Slowest growth

This quarter’s growth is the slowest recorded by the company, in comparison with the previous nine quarters, largely due to constantly declining average revenue per user or ARPU, analysts said.

For RCom, ARPU fell by 3.9 per cent to Rs 271 from Rs 282 in the previous sequential quarter. Also, average minutes of use a customer (on a per-month basis) were almost flat at 423 (424).

The RCom share hit an intra day high of Rs 234.5 , before settling at Rs 220.7, 13 .7 per cent higher than the previous close on the Bombay Stock Exchange.

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