Idea Cellular posts a 41 per cent decline in net profit for the quarter ended September, 2011

Idea Cellular has posted a 41 per cent decline in net profit for the second quarter ended September, 2011, at Rs 1.06 billion, from Rs 1.80 billion in the corresponding quarter last fiscal.

The net sales for the quarter stood at Rs 46.08 billion. During the quarter, the finance and treasury cost increased by 185 per cent to Rs 2.94 billion from Rs 1.03 billion in the previous quarter.

Idea Cellular has crossed the 100 million subscriber mark. The operator registered a 2.2 per cent sequential quarterly revenue growth, after 6.7 per cent and 7.0 per cent in the previous two quarters.

On a year-on-year basis, Idea Cellular?s revenue grew by 26.2 per cent, from Rs 36,891 million in the second quarter of financial year 2011.

The voice minutes of use contracted, largely due to seasonality, by 2.2 per cent to 106.2 billion. The company also registered a 4.2 per cent improvement in the average realised rate (ARR) from 41.0 p to 42.7 p. Factors supporting improvement in ARR are increase in VAS contribution, up from 12.1 per cent to 13.2 per cent, roaming revenue and revision in promotional tariffs.

The standalone EBITDA margin compressed by 1 per cent to 22.4 per cent over the previous quarter, primarily due to higher manpower cost (annual increment) and network expenses. On a year-on-year basis the company?s EBITDA has grown to Rs 10,436 million (in the first quarter of financial year 2012) in comparison to Rs 7,618 million (in the second quarter of financial year 2011), an increase of 37 per cent.

Similarly, in spite of substantial investments in 2G, 3G and 3G spectrum auction; the company has managed to grow its EBIT to Rs 3,710 million, reflecting a growth of 58 per cent, over the second quarter of 2011.

The company?s profit after tax (PAT) on a standalone basis came down to Rs 793 million against Rs 1,541 million in the previous quarter, on account of net high interest and finance cost of Rs 2,538 million, including Rs 313 million of forex loss. The cash profit stands at Rs 7,884 million for the second quarter of financial year 2012.

The company?s 3G investment plans are on track and high speed broadband services are now available across 1,600 towns, in 20 service areas (including 3G roaming arrangement) in India.