 ADA Group firm Reliance Communications (RCom) posted a sharp decline of 54.84 per cent in net profit to Rs 525.99 crore, for the third quarter (Q3) ended on December 31, 2010.The net profit in last fiscal'''s Q3 was Rs 1,164.82 crore.
The company attributed its disappointing performance to rebalancing of product portfolio."This rebalancing will take another two quarters," said Syed Safawi, RCom''s President and CEO, wireless business.
RCom''s net income from operations also went down at Rs 4,864.98 crore (7.9 percent) in Q3 this fiscal, from Rs 5,283.57 crore in the year-ago period.
"Revenues are down this quarter as a result of our rebalancing of our product portfolio. We are doing away with low margin business even if it provides high volume as it puts pressure on our resources including scarce resources like spectrum," RCom said.
The net income from operations for the 9-month period was also down 10 per cent -- Rs 14,956 crore, from Rs 16,622 crore in the Q3 of last fiscal.
The cummulative net profit for the three quarters saw a major decline of 64.49 per cent from Rs 3,706 crore in last fiscal''s Q3 to Rs 1,316 crore in October-December, 2010.
RCom provided a sharp increase -- from Rs 833 crore to Rs 1,033 crore -- for depreciation and amortisation, while the access charges increased from Rs 550 crore to Rs 663.96 crore.The earning per share also took a hit to Rs 2.33 in December end from Rs 5.37 a year ago.
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The company said it has decided to exit from PCO and Fixed wireless phone business. "We are deliberately moving away from the wholesale segment of PCO and FWP business." "We are putting our resources on more profitable Data and VAS businesses thereby future proofing the business against voice led growth alone," RCom said. |