Idea Cellular announces unaudited results for the third quarter (Q3) and nine months ended 31 December 2014
27 January, 2015
Share27 January 2015
| Highlights – Q3 FY14 | |||
| Idea – Standalone1 | Revenue Rs. 80,148mn | EBITDA Rs. 24,860mn | PAT Rs. 6,783mn |
| Idea – Consolidated2 | Revenue Rs. 80,175mn | EBITDA Rs. 27,527mn | PAT Rs. 7,671mn |
| INR mn | ||||||||
| Idea standalone1 | Idea consolidated2 | |||||||
| Q3 FY15 | Q2FY15 | YTD Q3 FY15 | YTD Q3 FY14 | Q3 FY15 | Q2FY15 | YTD Q3 FY15 | YTD Q3 FY14 | |
| Revenues - Established Services Areas3 | 75,543 | 71,437 | 2,18,526 | 1,84,597 | ||||
| Revenues - New Services Areas4 | 4,605 | 4,236 | 12,857 | 10,033 | ||||
| Total revenue | 80,148 | 75,673 | 2,31,383 | 1,94,630 | 80,175 | 75,699 | 2,31,484 | 1,94,751 |
| EBITDA - Established Services Areas3 | 26,741 | 24,192 | 75,258 | 57,813 | ||||
| EBITDA - new services areas4 | (1,881) | (1,798) | (5,407) | (4,209) | ||||
| Total EBITDA | 24,860 | 22,394 | 69,851 | 53,604 | 27,527 | 24,907 | 77,473 | 60,638 |
| EBITDA % - Established Service Areas3 | 35.4% | 33.9% | 34.4% | 31.3% | ||||
| EBITDA% - New Service Areas4 | -40.8% | -42.4% | -42.1% | -41.9% | ||||
| Total EBITDA% | 31.0% | 29.6% | 30.2% | 27.5% | 34.3% | 32.9% | 33.5% | 31.1% |
| Depreciation &Amortisation | 13,792 | 10,774 | 35,152 | 30,888 | 14,826 | 11,788 | 38,159 | 33,814 |
| EBIT | 11,068 | 11,621 | 34,699 | 22,716 | 12,700 | 13,119 | 39,314 | 26,824 |
| Interest and Financing Cost (Net) | 720 | 1,176 | 3,901 | 4,223 | 983 | 1,445 | 4,703 | 5,337 |
| Dividend from Indus | - | 1,026 | 4,648 | 838 | - | - | - | - |
| PBT | 10,348 | 11,470 | 35,446 | 19,331 | 11,717 | 11,675 | 34,611 | 21,487 |
| PAT | 6,783 | 7,794 | 24,695 | 12,794 | 7,671 | 7,559 | 22,512 | 13,780 |
| Cash profit5 | 20,286 | 18,155 | 58,671 | 47,656 | 22,216 | 18,971 | 59,560 | 51,865 |
| Note: Forex loss/gain which was part of net interest and finance cost earlier, has been regrouped to other expenditure (impacting the EBITDA). Past period figures are restated. | ||||||||
Idea Cellular is pleased to join a s;elect club of top global operators with over 150 million quality subscribers, providing the company a unique platform for future growth in mobile voice, wireless broadband and mobile banking services, etc.
In the calendar year (CY) 2014, Idea added 22.2 million subscribers (VLR net adds); the highest addition in the industry. ‘1 out of 6’ Indian prefer brand Idea for their mobile services as the company’s subscriber market share raced past 18.1 per cent (TRAI November 2014 VLR report). In spite of the huge 17 per cent incremental new customer addition in 2014, the customer mobile spend (ARPU) on Idea network increased by Rs.10 to Rs.179 (Q3FY15 over Q3FY14), a clear testimony to growing power of brand Idea.
The company maintained its long term growth trajectory with 5.9 per cent sequential quarterly revenue growth, helping Idea reach 31.0 per cent EBITDA margin in Q3FY15. The standalone quarterly revenue of Rs.80,148 million @21.2 per cent YoY increase (over Q3FY14), was a balanced growth with voice minutes expansion by 18.1 per cent (YoY), and ‘Average Realisation per Minute’ (ARPM) improvement by 3.2 per cent. Idea continued its journey of strengthening its competitive market standing with Q2FY15 Revenue Market Share (RMS) @17.2 per cent, an increase of 1.4 per cent compared to Q2FY14.
During the quarter, Idea carried 170.7 billion minutes on its network, registering 5.1 per cent sequential quarterly growth and 46.1 billion megabytes of mobile data on its 2G+3G platform, @16.9 per cent quarterly expansion, with both lines of business delivering strong performance. The ‘Value Added Service’ (VAS) contribution has improved sharply to 23.1 per cent of service revenue, an unprecedented gain of 7 per cent in the last one year.
Due to competitive pressure and increased contribution from new service areas, the voice realisation remained under pressure and has fallen sequentially by 0.6 paisa to 35.6p/minute in Q3FY15. However, 18.4 per cent quarterly jump in mobile data revenue, contributing 15.7 per cent to service revenue, helped Idea improve its ‘ARPM’ at 46.3p in Q3FY15 (vs 45.9p in Q2FY15).
The standalone quarterly EBITDA of Rs.24,860 million, grew annually by 37.3 per cent due to multiple drivers including robust subscriber addition, consistent voice minutes growth, explosion of data volume, scale benefit and better cost management. Idea during the last one year has improved its EBITDA margin by 3.6 per cent to 31 per cent from 27.4 per cent in Q3FY14, on the back of 4.2 per cent EBITDA margin improvement between Q3FY13 (23.1 per cent) to Q3FY14.
As the technology cycle shortens, the company on prudent basis reviewed and reduced the estimated useful life of core network equipment from present 10 to 9 years. Consequently, this quarter the depreciation charge has risen by Rs.2,625 million. Inspite of accounting for this higher charge, Idea has delivered ‘Profit After Tax’ (PAT) at Rs.6,783 million, 70.4 per cent higher compared to Q3FY14 PAT at Rs.3,981 million.
The strong cash profit of Rs.20,286 million in Q3FY15 (YoY growth of 29.5 per cent) has helped company reduce net debt to Rs.110,891 million. The net debt to annualised EBITDA ratio now stands at 1.12, lowest in the industry, providing company sufficient head room to participate in the forthcoming license renewal spectrum auction.
The mobile data subscriber base on 2G+3G platform has risen by 8.6 million in CY 2014 to 34.2 million. This quarter Idea held on its data rates (bended 2G+3G) – ‘Average Realisation per MB’ (ARMB) at 26.9p (vs 26.5p in Q2FY15). The blended Data ARPU (2G+3G) has improved by Rs.35 in CY 2014 to Rs.126 as ‘Usages per Data Subscriber’ has grown to 470 MB per user in Q3FY15 from 309 MB in Q3FY14. The 3G (Voice+Data) customers have grown steadily this quarter to 16.1 million but still represents only 10.7 per cent of Idea’s total subscriber base. Idea continued to expand its 3G footprint with incremental investment of 7,840 3G sites in CY 2014 taking the overall 3G sites count to 27,744.
For Q3FY15, on consolidated basis including Indus 16 per cent contribution, Idea revenue grew by 21.2 per cent, an incremental YoY revenue growth of Rs.14,044 million. During the same period EBITDA rose by 34.1 per cent, driving the absolute EBITDA for this quarter to Rs.27,527 million at 34.3 per cent margin (3.3 per cent YoY margin increase). The consolidated PAT at Rs.7,671 million in Q3FY15 has grown sharply by 64 per cent from Rs.4,677 million in Q3FY14.
As mobility market services expand, the Indian telecom business offers exciting growth opportunities in mobile broadband and rural voice telephony. Brand Idea with growing consumer affinity, strong cash flows, expanding 2G and 3G network footprint and competitive spectrum profile, reaffirms its ability to overcome current short term uncertainties, emerge stronger and consolidate its market position to tap emerging telecom and mobile banking opportunities.
Notes:
- Idea Standalone represents Idea, and its 100 per cent subsidiaries. Effectively, this encompasses all operations, excluding the joint venture i.e. Indus.
- Idea Consolidated represents Idea Standalone and proportionate consolidation of Indus (@16 per cent).
- Established Service Areas represent 15 service areas namely Maharashtra and Goa, Gujarat, Andhra Pradesh, Madhya Pradesh and Chhattisgarh, Delhi, Kerala, Haryana, Uttar Pradesh West and Uttaranchal, Uttar Pradesh East, Rajasthan, Himachal Pradesh, Punjab, Karnataka, Mumbai and Bihar service areas.
- New Service Areas represent seven service areas of Orissa, Tamil Nadu, Jammu and Kashmir, Kolkata, West Bengal, Assam and North East.
- Cash profit is calculated as summation of PAT, Depreciation and Amortisation, charge on account of ESOPs and deferred tax, for the relevant period.
- Figures for past periods have been regrouped, wherever necessary.
About Idea Cellular Ltd.
Idea Cellular is the third largest wireless operator in India with a revenue market share of 17.2 per cent (Q2FY15). Idea is listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) in India. Idea is part of the Aditya Birla Group, which is one of the largest business groups in India. The Aditya Birla Group is a conglomerate with operations in more than 30 countries. The Aditya Birla group has a history of over 50 years and has businesses in, among others, mobile telecommunications, metals and mining, cement, carbon black, textiles, garments, chemicals, fertilisers, life insurance and financial services industries.
