RCom will be back in the black in Q4: Punit Garg

Rajesh Kurup Mumbai | Updated on January 29, 2018 Published on January 29, 2018

Punit Garg, Executive Director, Reliance Communications   -  Shashi Ashiwal

After firm narrows Q3 loss to ₹130 crore, Executive Director says company might report a net profit next quarter

Banking on its B2B businesses, debt-ridden Reliance Communications expects to emerge profitable in the fourth quarter of this financial year and start the next financial year with a clean slate.

The company, controlled by billionaire Anil Ambani, has posted a reduced net loss of ₹130 crore in the third quarter ended December 31, 2017.

“Very clearly, we will be back in the black in the fourth quarter itself. From April 1, we will be a business-to-business company without any luggage. And will be comparing ourselves with other companies in the enterprise business space, but with Mobile Virtual Network Operator (MVNO) offerings for B2B segment,” RCom Executive Director Punit Garg told BusinessLine over the telephone.

B2B push

“It is a blessing in disguise that we took this decision to exit consumer business at the right time. I think B2B is the future, with the maximum growth coming in from this segment, while there will be a bloodbath in consumer businesses,” Garg said.

RCom will continue to be listed on the bourses, much like the global B2B telecom majors, he added.

In December, RCom entered into an agreement to sell its wireless assets — spectrum, towers and fibre — to Reliance Jio Infocomm for an undisclosed sum.

Following the deal, RCom became a company offering services to B2B company, but it continues to focus on 4G MVNO (data-oriented business) to corporates.

“Shutting off the consumer part has shown this improvement. The wireless services, which was still operational in October and November, had a trickling effect till now. And we have concluded the entire process of signing the agreement with RJIo; so the numbers are going to be better. Next time, we might not say the net loss has reduced, but we might say we made a net profit,” Garg said.

Q3 results

On Monday, RCom said it pared third-quarter net loss to ₹130 crore, compared with a net loss of ₹2,712 crore recorded in the trailing quarter.

Its new business portfolio reported consolidated revenues of ₹1,176 crore and EBITDA (earnings before interest, taxes, depreciation, and amortisation) of ₹252 crore. The EBITDA margin stood at 21.4 per cent.

Indian operations’ revenues and EBITDA stood at ₹596 crore and ₹95 crore, respectively, while global business revenues and EBITDA at ₹ 709 crore and ₹157 crore, respectively.

‘Desired results’

“RCom’s planned exit from the consumer business has achieved more than the desired results. RCom has reduced its net loss by over 95 per cent (QoQ). RCom expects to deliver even better financial performance in the coming quarters,” Ambani said in a statement.

RCom’s asset monetisation is on track to close by March, subject approvals, the statement said.

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Published on January 29, 2018
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