RCOM Q4 FY2012 and FY2012 Results - First Cut,
RAJESH DESAI
Dear Sir/Madam,
Reliance Communications Ltd announced its consolidated Q4 FY2012 and FY2012 Results on 26 May 2012. Please find below a glimpse of the same.
On a reported basis, RCOM posted a 33.0% y-o-y decline in top line to `5,010 Crores while its bottom line expanded 97.6% y-o-y to `332.0 Crores in Q4 FY2012. However, the company’s numbers in a year ago quarter included onetime accounting treatment of `2,545 Crores, which inflated the revenues by the described amount.
Eliminating the one off impact, RCOM reported a 1.6% y-o-y increase in top line during the quarter. A similar adjustment is made in EBIDTA numbers as well. With this, the company’s EBIDTA increased 12.8% y-o-y to `1,332 Crores during the quarter. Adjusting for the information provided in note 5 of RCOM’s Q4 FY2011 statements, the company’s adjusted net profit stood at `210 Crores for Q4 FY2011. Although the company posted first y-o-y increase in bottom line after several quarters, its high debt levels and regulatory issues in the industry, make the stock less attractive for an investing point of view, currently. Furthermore, the growth in RCOM’s net profits was primarily fueled by share of minority interest of `130 Crores, excluding which the company’s profit rose just 7.4% y-o-y, or declined 3.3% y-o-y on an adjusted basis, to `203 Crores in Q4 FY2012. As a result, RCOM continued to post decline in net profits before share of associates and minority interest.
On operational front, RCOM’s Rate per Minute (RPM) stood healthy at 43.6p per minute, while minutes on its network grew 3.1% sequentially to 103 Bn minutes. The minute growth reported by the company remained well below its peers Bharti Airtel and Idea Cellular.
However, according to the company’s management views in electronic media RCOM is progressing well on its unit ‘FLAG’s’ listing on Singapore stock exchange, and may seize a deal for its tower venture depending upon the clarity on licensing guideline by TRAI. These factors may trigger event based upsides in the stock in near term. In addition, the company’s ability to generate free cash flows and efforts to reduce debt may provide a breather to its performance in the upcoming quarters.
Regards,
Team Microsec Research
Microsec Capital Limited
Tel: 91 33 30512100
Fax: 91 33 30512020
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CA. Rajesh Desai