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Idea Cellular announces audited results for the fourth quarter (Q4) and year ended March 31, 2012

26th April, 2012

Highlights - Q4 FY12
Idea - Standalone 1 Revenue Rs. 5 4, 03 5 mn EBI TDA Rs. 1 2, 07 0 mn PAT Rs. 2, 0 16 mn




Idea - Consolidated 2 Revenue Rs. 5 3, 69 7 mn EBI TDA Rs. 1 3, 57 1 mn PAT Rs. 2, 3 90 mn





INR mn
 
Idea standalone1
Idea consolidated 2

Q4 FY12
Q3FY12
FY12
FY11
Q4 FY12
Q3 FY12
FY12
FY11
Revenues - established services areas 3
47,784
45,144
175,252
141,579

     
Revenues - new services areas 4
6,251
5,508
21,548
14,801

     
Total revenue
54,035
50,652
196,800
156,380
53,697
50,308
195,411
155,032
EBITDA - established services areas 3
13,671
13,708
51,655
38,648

     
EBITDA - new services areas 4
(1,601)
(1,722)
(6,496)
(5,386)        
Total EBITDA
12,070
11,986
45,159
33,262
1 3,571
1 3,446
5 0,924
3 7,907
EBITDA % - Established Service Areas 3 28.6% 30.4% 29.5% 27.3%        
EBITDA% - New Service Areas 4
-25.6%
-31.3%
-30.1%
-36.4%        
Total EBITDA%
22.3%
23.7%
22.9%
21.3%
25.3%
26.7%
26.1%
24.5%
Depreciation & Amortisation
7,211
6,952
27,277
21,728
7,844
7,575
2 9,813
2 3,973
EBIT
4,860
5,035
17,882
11,534
5,728
5,871
2 1,110
1 3,933
Interest and Financing Cost (Net)
1,960
2,527
9,086
2,489
2,275
2,880
1 0,558
3,965
PBT
2,900
2,508
8,796
9,046
3,453
2,991
1 0,553
9,969
PAT
2,016
1,687
6,036
8,378
2,390
2,010
7,230
8,987
Cash profit 5
10,135
9,452
36,079
30,899
1 1,203
1 0,558
4 0,255
3 4,068

Idea continues its enviable 4-year track record of being the fastest growing Indian mobile operator, with gross revenue growth of 25.8 per cent for financial year 2011-12 as against FY11, which is nearly double the wireless industry growth rate. The 6.7 per cent sequential quarterly revenue growth in Q4FY12, on back of 8.8 per cent Q-o-Q growth in Q3FY12, reaffirms the increasing consumer preference for brand Idea.

Idea's global scale of operations, serving 113 million quality subscribers, generating 1.4 billion minutes per day, provides the company a strong hedge to counter the emerging headwinds from the uncertain regulatory interventions and weak macroeconomic environment.

This quarter the high revenue growth is primarily led by the exponential growth in voice minutes @9.1 per cent to 124 billion minutes as compared to 114 billion minutes in Q3FY12, strengthening Idea's position among the 'Top 10 global operators in terms of voice minutes'. The minutes volume expansion again was supported by 6.4 mn VLR subscriber additions during the quarter.

The uptrend of Average Realisation Per Minute (ARPM) was halted with decline in ARPM to 42.2p from 43.3p, a harsh reminder of the market place battle and overcapacity. While challenges on the voice ARPM continue, the company remains focused to improve 'Non-Voice Revenue', which contributed 14.3 per cent of revenue in Q4FY12 against 13.7 per cent in last quarter.

The revenue growth, over the previous quarter, would have naturally translated into EBITDA margin improvement, but for a one-off regulatory impact reflecting in the 'License and WPC fees', which has been considered prudently. On an annual basis the absolute EBITDA has increased to Rs. 45,159 million @ 22.9 per cent in FY12 in comparison to Rs. 33,262 million @ 21.3 per cent margin in FY11, a growth of 35.8 per cent.

The standalone PAT for Q4FY12 has improved to Rs. 2,016 million on sequential basis, but the annual PAT at Rs. 6,036 million was lower compared to Rs. 8,378 million in FY11, primarily on account of higher depreciation and interest charges due to front loaded 3G investments. The company is happy to maintain last quarter trend of free cash flow (after Capex). The full year cash profit for FY12 stands at Rs. 36,079 million. With declining future capex demand for 2G and 3G businesses, the free cash flow of the company will provide the cushion to tide over the emerging regulatory challenges.

Idea's 3G investment plans are on track and high speed broadband services are now available in 3,000 towns, 10,000 villages and in 20 service areas (including roaming arrangements). The company, in its own way, is accelerating the deployment of 3G ecosystem, by launching Idea branded 3G handsets. Nearly 2.6 million Idea customers are active on the company's 3G platform and enjoying futuristic services.

During the last calendar year, Idea further consolidated its competitive standing to 14.4 per cent Revenue Market Share (RMS) in Q3FY12 - an improvement of 1.1 per cent in RMS from Q3FY11, delivering over 20 per cent incremental share of industry revenue, VLR and minutes, quarter-on-quarter.

Idea has extended its overall MNP leadership position with net gain of 2.9 million customers (as on April 22, 2012) from other operators, with one out of every four existing mobile customers, who chooses to port out, preferring Idea services.

The company is confident to overcome the current uncertain regulatory phase, emerge stronger, consolidate its position in the telecom voice market and participate aggressively in the evolving wireless broadband business.

Notes:

  1. Idea standalone represents Idea, and its 100 per cent subsidiaries. Effectively, this encompasses all operations, excluding the joint venture i.e. Indus.
  2. Idea consolidated represents Idea standalone and proportionate consolidation of Indus (@16 per cent).
  3. Established service areas represent 13 service areas namely Maharashtra and Goa, Gujarat, Andhra Pradesh, Madhya Pradesh and Chhattisgarh, Delhi, Kerala, Haryana, Uttar Pradesh East, Uttaranchal, Uttar Pradesh West, Rajasthan, Himachal Pradesh, Punjab and Karnataka service areas.
  4. New service areas represent nine service areas of Mumbai, Bihar, Orissa, Tamil Nadu, Jammu and Kashmir, Kolkata, West Bengal, Assam and North East.
  5. Cash profit is calculated as summation of PAT, depreciation and amortisation, charge on account of ESOPs and deferred tax, for the relevant period.
  6. Figures for past periods have been regrouped, wherever necessary.
  7. The honourable High Court of Delhi on 4th July 2011 has reaffirmed its order dated 5th February 2010 sanctioning the scheme of amalgamation of Spice Communications Limited (Spice) with the company. However, the judgement transferred and vested unto the DoT, the six telecom licenses
    granted to erstwhile Spice along with the spectrum (including two operational licenses for Punjab and Karnataka service areas) till the time permission of DoT is granted for transfer thereof upon an application from the company to that effect. Meanwhile, through interim orders, appellate bench had earlier directed DoT to accept the license fee from the company without prejudice, as the company is continuing to operate the licenses for Punjab and Karnataka service areas granted to erstwhile Spice; maintain status quo in relation to the aforesaid two operating licenses and no coercive steps in relation to any demand pertaining to the four non-operating licenses. The judgement in the said matter has since been reserved. The financial results therefore continue to include the results of Punjab and Karnataka service areas. The company has challenged, along with other telecom operators, order of DoT dated 23rd December 2011, ordering telecom operators to stop provision of services under 3G intra circle roaming agreements where it has not won 3G spectrum. The Honourable TDSAT has passed a "no coercive action" in the matter. The final judgement is since reserved.
  8. The Honourable Supreme Court, while pronouncing its judgement dated 2nd February 2012 in writ petition filed, inter alia, by Centre for Public Interest Litigations and others, quashed the press release dated 10.01.2008 issued by the DoT and consequent grant of 122 licenses (including seven operational licenses held by the company and six non-operational licenses, four out of the said six non operational licenses having been granted to erstwhile Spice Communications Limited, which stands merged with the company) and allocation of related spectrum. This directive of the Honourable Supreme Court, which was originally to become operational after four months from 02.02.2012, has been further extended on April 24, 2012 while disposing off the clarificatory application filed, inter alia, by the company, till September 07, 2012.

About Idea Cellular Limited
Idea Cellular is the third largest wireless operator in India with a revenue market share of 14.4 per cent (Q3FY12). Idea is listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) in India. Idea is a part of the Aditya Birla Group, India's first truly multinational group. The group operates in 36 countries, is anchored by an extraordinary force of over 133,000 employees belonging to 42 nationalities,
and derives over 60 per cent of its revenues from operations outside India.