Reliance Communications Profit Drops Less Than Analyst Estimates
November 14, 2011, 2:11 AM ESTBy Ketaki Gokhale
Nov. 12 (Bloomberg) -- Reliance Communications Ltd., India’s second-largest mobile phone operator by subscribers, posted a 43 percent drop in profit, beating analyst estimates for the first time in three quarters.
Second-quarter net income fell to 2.52 billion rupees ($50 million) in the three months ended Sept. 30, from 4.46 billion rupees a year earlier, Mumbai-based Reliance Communications said in a statement today. Profit exceeded the 1.67 billion-rupee median of 14 analysts’ estimates compiled by Bloomberg.
Billionaire Anil Ambani’s flagship company joined competitors Bharti Airtel Ltd. and Vodafone Group Plc in starting third-generation wireless services this year to win subscribers with features such as streaming video and music downloads. Reliance, which spent 85.9 billion rupees last year at auctions of airwaves to start faster wireless services, is seeking to sell its tower unit to reduce debt.
Reliance had 147 million connections at the end of September, up from 117 million last year, according to the statement.
Revenue fell 4.6 percent to 47.9 billion rupees from a year earlier, according to the statement. That’s lower than the 50.2 billion-rupee median of 16 analysts’ estimates.
Earnings before interest, tax, depreciation and amortization, or Ebitda, declined 3 percent to 16.1 billion rupees, while the Ebitda margin, or ratio of earnings to sales, dropped to 31.8 percent from 32.4 percent a year earlier.
Reliance was little changed at 83.65 rupees at the close of trading in Mumbai yesterday, while the benchmark Sensitive Index fell 1 percent. The stock has declined 42 percent this year, compared with a 16 percent drop in the key index. Bharti has gained 10 percent.
--Editors: John Chacko, Amanda Jordan
To contact the reporter on this story: Ketaki Gokhale in Mumbai at kgokhale@bloomberg.net
To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net
