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Our Bureau

Mumbai , June 23

THE continuing decline in revenues and profit from its international telephony business has more than halved VSNL's net profit for both the quarter as well as the year ended March 31, 2004.

Net profit for the quarter declined 56.9 per cent, to Rs 82.2 crore from Rs 191.1 crore which was reported for the corresponding quarter of the previous year. Net profit for the year as a whole declined 51.6 per cent, to Rs 377.7 crore from Rs 780 crore the previous year.

The company attributed the fall in performance to a drop in international voice revenue on account of a sharp decline in international settlement rates, domestic tariffs, competition, and also the "growing concern of the ILD grey market."

"The year witnessed a voluminous growth in the traffic routed into the country through grey market channels," said a news release issued by VSNL.

Net sales for the quarter dipped 14.9 per cent, to Rs 778 crore, from Rs 914.6 crore. Total income for the quarter fell 21.6 per cent, to Rs 813 crore (Rs 1,038 crore).

For the year-ended March 31, 2004, total income decreased 29.9 per cent, to Rs 3,371 crore (Rs 4,812.5 crore).

The board of directors has recommended a dividend of 45 per cent (Rs 4.5 per share).

However, the company has managed to actually lessen total expenditure during the year, bringing it down to Rs 2,648 crore from the year ago figure of Rs 3,398 crore.

Profit before tax for the year fell to Rs 543 crore, down from Rs 1,254 crore.

Speaking on the financial performance, Mr S.K. Gupta said: "The company is diversifying into other business areas to broadbase its business model so as to grow in the competitive environment. The share of enterprise data business is growing at a rapid pace and contributes around 30 per cent of the company's operating revenues."

Segment-wise, international telephony revenues dipped 34 per cent, but income from "other services" rose 6.2 per cent, to Rs 445.8 crore (Rs 419.6 crore).

More Stories on : Financial Performance | Telecommunications

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