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Idea Cellular announces unaudited results for the first quarter ended 30 June 2009

23rd July, 2009

Idea Cellular Limited: Q1FY10 results

Highlights
Quarter On Quarter (Q1FY10 over Q4FY09)

Idea - Standalone 1 Pro-forma 3 - Revenue up 5.6%; EBITDA up 4.7%; PAT up 3.4%
Reported - Revenue up 0.9%; EBITDA up 3.8%; PAT up 1.4%
Idea - Consolidated 2 Pro-forma 3 - Revenue up 6.2%; EBITDA up 6.8%; PAT up 10.6%
Reported - Revenue up 1.4%; EBITDA up 6.0%; PAT up  8.3%

INR Mn
 
Idea, standalone1
Idea, consolidated 2
 
Pro-forma 3
Reported
Pro-forma 3
Reported
Q1 FY10
Q1 FY10
Q4 FY09
Q1 FY09
Q1 FY10
Q1 FY10 Q4 FY09 Q1 FY09
(Rs. crore)
Revenues - 11 services areas 4
24,748
27,456
27,642
21,781
     
Revenues - new services areas 5
1,490
1,427
985
-
     
Total revenue
30,238
28,883
28,626
21,781
31,180
29,759
29,356
21,781
EBITDA - 11 services areas 4
8,434
8,345
8,069
7,236
EBITDA - new services areas 5
(672)
(644)
(654)
-
 
Total EBITDA
7,761
7,700
7,415
7,236
8,663
8,599
8,108
7,203
Depreciation and Amortisation
4,064
4,064
3,897
2,740
4,555
4,555
4,321
2,749
EBIT
3,697
3,636
3,519
4,495
4,108
4,044
3,788
4,454
Interest and financing cost (Net)
406
406
491
1,523
869
869
1,047
1,525
PBT
3,291
3,230
3,027
2,973
3,239
3,175
2,740
2,929
PAT
3,135
3,075
3,032
2,659
3,035
2,971
2,743
2,632

As per the IUC Xth Amendment released by the TRAI, effective 1 April 2009, termination charges for national calls stood reduced to INR 0.20 per minute from the earlier INR 0.30 per minute, whereas for international calls they stood enhanced  to INR 0.40 per minute from the earlier INR 0.30 per minute.

The operating results for this quarter are not comparable to earlier quarters due to the said change in IUC. These changes have caused a pro-forma contraction in revenue for this quarter of INR 1,355 million (standalone) and INR 1,421 million (consolidated). They have also caused a pro-forma contraction in costs of INR 1,294 million (standalone) and INR 1,357 million (consolidated). The net impact has depressed EBITDA by INR 61 million (standalone) and INR 64 million (consolidated) for the quarter. On pro-forma terms, the QoQ growth of revenue is 5.6 per cent (standalone) and 6.2 per cent (consolidated). The EBITDA margin on a pro-forma basis is 25.7 per cent (standalone) and 27.8 per cent (consolidated).

The standalone EBITDA margin, on a pro-forma basis, was almost unchanged from the previous quarter's level of 25.9 per cent, even after absorbing start up losses from the Orissa and Tamil Nadu service areas newly launched during this quarter. This was due to improved EBITDA margin, both from the 11 service areas and the new service areas of Mumbai and Bihar. The EBITDA margin on a consolidated pro-forma basis improved to 27.8 per cent from 27.6 per cent in the previous quarter, mainly due to a higher EBITDA margin of Indus. The pro-forma standalone PAT for the quarter at INR 3,135 million against INR 3,032 million for the last quarter, marked an improvement of 3.4 per cent. Similarly, pro-forma consolidated PAT at INR 3,035 million was higher by 10.6 per cent compared to the last quarter, mainly on account of higher PAT contribution by Indus and lower PAT losses from Spice.

The last six months have witnessed extraordinary entry pricing from various new competitive launches. Nonetheless, Idea added 4.1 million subscribers during the quarter, and maintained its national subscriber market share. The pro-forma drop in realised rate per minute was contained to 2 paisa. Average minutes of use per subscriber declined by 0.7 per cent, partly due to continuing rise of multiple SIM usage. Nonetheless, total minutes on the network grew QoQ by a strong 10.2 per cent. The resilient QoQ pro-forma revenue, EBIDTA and PAT performance underscore Idea's strong fundamentals, sophisticated management processes and brand power, and its ability to emerge competitively stronger through  the phase of sector over-capacity, hyper-competition and eventual anticipated shake-out.

Brand !dea expanded its wings to its 17th service area, with the commercial launch of Tamil Nadu (excl. Chennai) in May 2009, and of Chennai in July 2009. Idea operating service areas now cover 90 per cent of the national subscriber base. Preparatory work for other roll outs is on track, and Idea will be a pan-India operator within the calendar year.

Notes:
1. Idea Standalone represents Idea, and its 100 per cent subsidiaries incl. the ABTL service area of Bihar. Effectively, this encompasses all operations, excluding Spice and Indus.
2. Idea Consolidated represents Idea, its 100 per cent subsidiaries, and its JVs, grouped together. In addition to Idea standalone, this covers the proportionate consolidation of Indus (16 per cent), and Spice (41.09 per cent w.e.f. 16 October 2008).
3. Pro-forma figures upto EBITDA are derived assuming there is no change in the IUC charges compared to the pervious quarter. Depreciation and amortisation, interest and finance cost (net), tax are assumed same as reported for the current quarter, to arrive at the pro-forma PAT.
4. 11 service areas represent 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 service area.
5. New Service Areas represent Mumbai and Bihar service areas for the quarter ended March 2009, and further include Orissa and Tamil Nadu service areas for the quarter ended June 2009.
6. Figures of past periods have been regrouped, wherever necessary.

About Idea Cellular Ltd.
A leading GSM mobile services operator with over 47.1 million subscribers, Idea Cellular along with Spice Communications and ABTL, has licenses and spectrum to operate in all 22 service areas of India, currently with commercial operations in 17 service areas. 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 25 countries, is anchored by an extraordinary force of over 130,000 employees belonging to 30 nationalities and derives over half of its revenues from operations outside India.