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Idea Cellular announces un-audited results for the first quarter (Q1) ended June 30 2011

29th July, 2011

Highlights - Q1 FY12 over Q4 FY11
Idea - Standalone 1 Revenue Rs. 45,559mn EBITDA Rs. 10,666mn PAT Rs. 1,541mn




Idea - Consolidated 2 Revenue Rs. 45,207mn EBITDA Rs. 12,040mn PAT Rs. 1,773mn





INR mn
 
Idea standalone1
Idea consolidated 2

Q1 FY12
Q4 FY11
Q1 FY11
Q1 FY12
Q4 FY11
Q1 FY11
Revenues - established services areas 3
40,746
38,298
33,833



Revenues - new services areas 3
4,814
4,393
3,063



Total revenue
45,559
42,691
36,897
45,207
42,347
36,537
EBITDA - established services areas 3
12,064
10,667
9 ,337



EBITDA - new services areas 4
(1,397)
(1,173)
(1,401)



Total EBITDA
10,666
9 ,494
7 ,937
12,040
10,752
8 ,884
EBITDA % - Established Service Areas 3 29.6% 27.9% 27.6%      
EBITDA% - New Service Areas 4
-29.0%
-26.7%
-45.7%
     
Total EBITDA%
23.4%
22.2%
21.5%
26.6%
25.4%
24.3%
Depreciation & Amortisation
6 ,389
5 ,940
5 ,160
7 ,026
6 ,572
5 ,656
EBIT
4 ,278
3 ,554
2 ,776
5 ,014
4 ,180
3 ,228
Interest and Financing Cost (Net)
2 ,061
486
766
2 ,463
854
1 ,142
PBT
2 ,217
3 ,068
2 ,010
2 ,551
3 ,326
2 ,087
PAT
1 ,541
2 ,576
1 ,964
1 ,773
2 ,745
2 ,014
Cash profit 5
8 ,609
9 ,031
7 ,213
9 ,580
9 ,921
7 ,785

Idea, the fastest growing large Indian mobile operator, starts the new financial year with gross revenue in excess of US$1 billion for the quarter. Continuing on its upward trajectory, the company achieved a 6.7 per cent revenue growth on a sequential quarterly basis. This, on the back of 7.0 per cent and 8.2 per cent sequential revenue growth in preceding two quarters, reaffirms the increasing consumer preference for brand Idea.

The company has reversed the two year declining Average Realised Rate (ARR) trend with a marginal improvement of ~1 per cent in ARR to 41.0 p for the quarter against 40.6 p in the previous quarter.

Idea carried 108.6 billion Minutes on its network, registering a growth of 6.5 per cent compared to previous quarter and remained among the top 10 Global operators in terms of voice minutes of usage.

The company improved standalone EBITDA margin by ~1.2 per cent on a QoQ basis to 23.4 per cent, primarily driven by the strong performance in Established Service Areas, helping it to absorb the higher losses from New Service Areas. The growth in EBITDA margin was achieved inspite of higher network opex, by better cost management mainly related to lower Subscriber Acquisition, Servicing, Advertisement and Business Promotion Expenses.

As expected, with the introduction of 3G services in this quarter, additional expenses of amortisation of 3G spectrum fee (Rs.656 mn) and charging of related interest cost (Rs.1,228 mn) has impacted the profits. On a standalone basis, the Profit After Tax (PAT), for the quarter stands at Rs.1,541 mn compared to Rs.2,576 mn in the previous quarter. The Cash Profit for the quarter stands at Rs.8,609 mn as against Rs.9,031 mn in the previous quarter.

Idea continues to lead the industry in terms of subscriber quality with over 92 per cent of its base on VLR (as per TRAI, 31st May'11 release). With a net gain of over 930,000 subscriber (as on 24th July, 2011), Idea also leads the industry w.r.t. Mobile Number Portability.

Idea is aggressively expanding its 3G footprint and currently covers over 825 towns in 15 service areas, which includes bilateral roaming arrangement for the service areas of Mumbai, Bihar, Karnataka, Delhi, Kolkata and Tamil Nadu (including Chennai), with leading quality operators. The company stays committed to reach to 3,000 towns across India by the end of this financial year, through a combination of home network and roaming arrangements.

The service area specific strategy of consolidating its leadership position in Established Service Areas and cautious expansion in New Service Areas, has helped Idea to remain competitive in tough market conditions. The improving capacity utilisation, increasing brand power and generation of healthy Cash Profits with a strong balance sheet, underscore Idea's ability to benefit from long term sector opportunities.

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 of 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, and also include the service areas of Punjab and Karnataka of erstwhile Spice.
  4. New Service Areas represent 9 service areas of Mumbai, Bihar, Orissa, Tamil Nadu, J&K, 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 erstwhile Spice Communications Limited (Spice) was amalgamated with the Company effective 1st March 2010 pursuant to sanction of the Scheme of Amalgamation by Hon'ble High Court of Gujarat and Hon'ble High Court of Delhi. However, upon an application made by DoT for recall of the order dated 5th February 2010 sanctioning the above scheme, the single Judge Bench of Hon'ble High Court of Delhi while pronouncing its judgment dated 4th July 2011, reaffirmed the amalgamation of Spice into Idea with certain conditions. One of the condition of the said judgment transferred and vested unto the DoT, the six licenses of erstwhile Spice along with the spectrum (including two operational licenses for Punjab and Karnataka service areas), till the time permission by DoT is granted for transfer thereof upon an application from the Company to that effect. The Company then filed an appeal, before the Appellate Bench of Hon'ble High Court of Delhi, challenging the above judgement dated 4th July 2011 and the appeal is currently subjudice. Meanwhile, through interim order passed by the said Bench of Hon'ble Delhi High Court, DoT has been directed to accept the License Fee against the licenses for Punjab and Karnataka service areas granted to erstwhile Spice from the Company without prejudice; maintain status quo in relation to the aforesaid two operating licenses and not to take any coercive action in relation to remaining four non operating licenses till the next hearing. The financial results therefore continue to include the results of Punjab and Karnataka service areas.

About Idea Cellular Ltd.
Idea Cellular is the third largest wireless operator in India with a Revenue Market Share of 13.6 per cent (Q4FY11). 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 33 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.