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Idea Cellular announces un-audited results for the third quarter (Q3) and nine months ended December 31, 2011

23rd January, 2012

Highlights - Q3FY12
Idea - Standalone 1 Revenue Rs. 50,652mn EBITDA Rs. 11,986mn PAT Rs. 1,687mn




Idea - Consolidated 2 Revenue Rs. 50,308mn EBITDA Rs. 13,446mn PAT Rs. 2,010mn





INR mn
 
Idea standalone1
Idea consolidated 2

Q3 FY12
Q2FY12
YTD Q3
FY12
YTD Q3
FY11
Q3 FY12
Q2 FY12
YTD Q3
FY12
YTD Q3
FY11
Revenues - established services areas 3
45,144
41,579
127,469
103,281

     
Revenues - new services areas 4
5,508
4,975
15,296
10,408

     
Total revenue
50,652
46,554
142,765
113,689
50,308
46,199
141,714
112,685
EBITDA - established services areas 3
13,708
12,212
37,984
27,981

     
EBITDA - new services areas 4
(1,722)
(1,776)
(4,895)
(4,213)        
Total EBITDA
11,986
10,436
33,089
23,768
13,446
11,866
37,352
27,155
EBITDA % - Established Service Areas 3 30.4% 29.4% 29.8% 27.1%        
EBITDA% - New Service Areas 4
-31.3%
-35.7%
-32.0%
-40.5%        
Total EBITDA%
23.7%
22.4%
23.2%
20.9%
26.7%
25.7%
26.4%
24.1%
Depreciation & Amortisation
6,952
6,726
20,067
15,787
7,575
7,369
21,970
17,401
EBIT
5,035
3,710
13,022
7,981
5,871
4,498
15,383
9,753
Interest and Financing Cost (Net)
2,527
2,538
7,126
2,003
2,880
2,939
8,283
3,111
PBT
2,508
1,171
5,896
5,978
2,991
1,559
7,100
6,643
PAT
1,687
793
4,020
5,802
2,010
1,058
4,840
6,242
Cash profit 5
9,452
7,884
25,945
21,868
10,558
8,913
29,052
24,147

While 8.8 per cent sequential quarterly revenue growth brings back cheers to the company, the business outlook remains a paradox, a combination of tailwinds with strong customer traction and headwinds emerging from uncertain regulatory interventions and macro-economic environment.

This quarter, strong revenue growth is primarily led by seasonal return of minute's growth to 114 billion, a growth of 7.3 per cent, compared to Q2FY12. The minutes volume expansion was supported by high 7.5 million net VLR subscriber additions during Q3FY12 against 3.2 million in Q2FY12. Idea continues its unblemished record of highest active subscriber ratio of 92.3 per cent as per TRAI (November 2011). The 106.4 million quality subscribers provide it the platform for accelerated future growth in voice, VAS and wireless broadband and related telecom services.

The company maintains the upward trend of Average Realisation Per Minute (ARPM) from 42.7p in Q2FY12 to 43.3p in Q3FY12. ARPM improvement was led by higher VAS contribution (13.2 per cent in Q2FY12 to 13.7 per cent in Q3FY12) and roaming revenue, while voice rate realisation remained flat.

The revenue growth has translated into EBITDA margin improvement by 1.2 per cent over previous quarter, @ 23.7 per cent. On a Y-o-Y basis absolute EBITDA has grown to Rs. 11,986 million (Q3FY12) in comparison to Rs. 8,214 million (Q3FY11).

However, the standalone YTD Q3FY12 PAT of Rs. 4,020 million has declined inspite of revenue growth, compared to YTD Q3FY11 PAT of Rs. 5,802 million, primarily on account of higher depreciation and amortisation and interest and financing cost with respect to 3G investments, and higher provision for deferred tax. The Q3FY12 standalone PAT is Rs. 1,687 million and the cash profit of Rs. 9,452 million registered a growth of 19.9 per cent on Q-o-Q basis.

Company's 3G investment plans are on track and high speed broadband services are now available across 2,300 towns in 20 service areas (including roaming arrangements) in India. This quarter company introduced affordable Idea branded 3G smart-phones starting from Rs. 5,850 onwards thereby helping Idea's 106 million subscribers to move to the new exciting digital age.

Company has improved its competitive standing to 14 per cent revenue market share and extended its MNP leadership with net gain of 2.2 million customers (as on 14 January, 2012) from other existing operators.

The company is confident to overcome the current uncertain regulatory phase, emerge stronger, consolidate its position in telecom voice market and participate aggressively in 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 West and Uttaranchal, Uttar Pradesh East, Rajasthan and Himachal Pradesh, Punjab and Karnataka service areas.
  4. New Service Areas represent nine service areas of Mumbai, Bihar, Orissa, Tamil Nadu, Jammu & 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 Hon'ble High Court of Delhi on 4 July 2011 has reaffirmed its order dated 5 February 2010 sanctioning the Scheme of Amalgamation of Spice Communications Limited (Spice) with the Company. However the judgment 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 & 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 matter remains subjudice at the High Court. The financial results therefore continue to include the results of Punjab and Karnataka service areas.
  8. The company has challenged, along with other Telecom Operators, order of DoT dated 23 December 2011, ordering telecom operators to stop provision of services under 3G Intra Circle Roaming Agreements where it has not won 3G spectrum. The Hon'ble TDSAT has passed a "no coercive action" order till the next date of hearing.

About Idea Cellular Ltd.
Idea Cellular is the third largest wireless operator in India with a Revenue Market Share of 14.0 per cent (Q2FY12). Idea is listed on the National Stock Exchange (NSE), and the Bombay Stock Exchange (BSE) in India.

Idea is 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.