Idea Cellular’s second quarter profit crashes by 88% to Rs 91.46 crore
Idea Cellular, country's third largest telecom company, on Monday posted an 88 per cent plunge in its consolidated net profit at Rs 91.46 crore in the September quarter due to higher expenses. The company had reported a net profit of Rs 762.27 crore in the corresponding three months a year ago.
"Higher network running expenses due to accelerated expansion, increased subscriber acquisition and servicing cost, and multiple inflationary pressures resulted in overall operating cost increase," the cellular firm said in a statement.
The company further said that its margin was adversely impacted by one-time depreciation charges of Rs 1,954.3 crore and finance cost of Rs 875.3 crore. While the launch of 4G services in 10 circles and 3G in some areas also had its impact on margin. The company's results are as per Indian Accounting Standard (Ind AS). "With adoption of Ind AS, the financials of Indus (Joint Venture) and ABIPBL (Associate) are consolidated at PAT level only. Accordingly, the consolidated total comprehensive income, including 16 per cent share from Indus and 49 per cent from ABIPBL) stands at Rs 90 crore against Rs 757 crore in the second quarter...," Idea said.
The revenue of Idea Cellular, however, increased by 7.2 per cent to Rs 9,300.23 crore in the reported quarter from Rs 8,675.37 crore in the year-ago period. The company said it is looking to increase its investment in the network by Rs 1,000 crore.
"The company is gearing up to expand its wireless broadband coverage using the spectrum won in recently concluded spectrum auction and plans to spend incremental equipment capex of Rs 10 billion in FY2017. With this, the capex guidance is revised from an earlier level of Rs 65-70 billion to Rs 75-80 billion," Idea said.