Board recommends 10 per cent maiden dividend
MUMBAI: Reliance Communications Ltd. (RCL), an Anil Dhirubhai Ambani Group (ADAG) company, has announced an impressive growth in the net profit at Rs 3,163 crore (previous year Rs. 444 crore) for 2006-07 on higher revenues of Rs. 14,468 crore (Rs. 10,766 crore). The RCL board has recommended a dividend of 10 per cent.
The operating profit (earnings before interest, depreciation and tax) was Rs. 5,720 crore (Rs. 2,213.75 crore) and the operating margin was 40 per cent (24 per cent). The company reported impressive average revenue per user of Rs. 377 in its wireless business.
Addressing the media here on Monday, Anil D. Ambani, Chairman, RCL, said that while the capital expenditure in 2006-07 was Rs. 6,700 crore, in the current year it would be around Rs. 10,000 crore. The company had received all approvals for demerging the tower business into Reliance Tower Infrastructure Ltd. (RTIL). It was expected that the demerger would reduce set-up and operating costs, resulting in cost efficiencies and provide greater financial flexibility, he said. "RTIL will have passive infrastructure to host GSM, CDMA, WIMAX and 3G and can take non-recourse debt to fund future expansion. RTIL has 12,000 towers, no debt and a net worth of Rs. 3,000 crore,'' Mr. Ambani said.
GSM, CDMA business
RCL's GSM and CDMA businesses are spread over eight circles and have a 27 per cent share of the market.
"We expect a large quantum of spectrum to be available in the second half of the year,'' he said. "Within a year of the spectrum becoming available, we can roll out a nation-wide GSM network for close to $1 billion or Rs. 4,500 crore. I am optimistic about the availability of GSM spectrum,'' he said. RCL is on track to launch the Direct-to-Home (DTH) and IP TV services. "We will launch DTH nation-wide by the end of the year and for IP TV, it will first go to the metros. Both are start-up businesses and one cannot expect large revenues to come in too soon.
In the first two years, they will not account for more than 10 per cent of the business of RCL,'' Mr. Ambai said
For the quarter ended March 31, 2007, RCL reported a net profit of Rs. 1,024.40 crore (Rs. 408.85 crore) on revenues of Rs. 3,936.90 crore (Rs. 2,970 crore). The operating profit was at Rs. 1,635.2 crore (Rs. 1,042.22 crore).