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Idea Cellular announces unaudited results for the first quarter (Q1) ended 30 June 2014

21st July, 2014

Highlights - Q1 FY 15
Idea - Standalone1 Revenue Rs.. 75,562mn EBITDA Rs. 22,664mn PAT Rs. 10,117mn
Idea - Consolidated2 Revenue Rs.75,610mn EBITDA Rs. 25,106mn PAT Rs. 7,282mn 

INR Mn
 
Idea, standalone1
Idea, consolidated 2

Q1 FY15
Q4 FY14
Q1FY14
Q1 FY15
Q4 FY14
Q1FY14
Revenues - Established Service Areas 3 71,547 66,699 61,965      
Revenues - New Service Areas 4
4,015 3,707 3,390      
Total revenue
75,562 70,406 65,355 75,610 70,438 65,388
EBITDA - Established Service Areas 3 24,376 21,555 19,750      
EBITDA - New Service Areas 4
(1,713) (1,674) (1,314)      
Total EBITDA 22,664 19,881 18,436 25,106 22,302 20,763
EBITDA % - Established Service Areas 3 34.1% 32.3% 31.9%      
EBITDA % - New Service Areas 4 -42.7% -45.2% -38.8%      
Total EBITDA% 30.0% 28.2% 28.2% 33.2% 31.7% 31.8%
Depreciation & Amortisation 10,586 10,402 10,407 11,545 11,380 11,353
EBIT 12,078 9,479 8,030 13,561 10,922 9,410
Interest and Financing Cost (Net) 2,072 1,653 1,832 2,342 1,966 2,211
Dividend from Indus
3,623 - 838 - - -
PBT
13,628 7,826 7,036 11,219 8,957 7,199
PAT 10,117 5,138 4,829 7,282 5,898 4,627
Cash profit 5 20,230 16,694 17,438 18,372 18,505 18,264

Idea , the fastest growing large Indian mobile operator, starts the new financial year with highest ever incremental revenue growth of Rs.5,157 million in a quarter, helping the company reach 30 per cent EBITDA margin. Continuing its upward trajectory, the company achieved 7.3 per cent sequential quarterly revenue growth, on the back of 6.5 per cent growth in Q4FY14. This quarter Idea delivered balanced growth with sequential quarterly voice minutes expansion by 5.2 per cent and ‘Average Realisation per Minute’ (ARPM) improvement of 3.3 per cent.

During the quarter, the company carried 165.2 billion minutes on its network, registering 12.2 per cent YoY growth and 32.5 billion megabytes of mobile data on its 2G+3G platform, YoY growth of 136 per cent, reaffirming strong consumer demand for brand Idea.

The higher voice rate realisation and jump in data contribution to 11.5 per cent of service revenue helped improve ‘Average Realisation per Minute’ (ARPM) by 1.5 paisa from 43.6 p in Q4FY14 to 45.1 p in Q1FY15. The Value Added Services (VAS) contribution has improved sharply to 17.8 per cent of overall service revenue.

The standalone EBITDA at Rs.22,664 million grew faster by 14 per cent on QoQ basis due to multiple drivers including scale benefit, better cost management and robust voice and data growth. The EBITDA margin has improved sequentially by 1.8 per cent to 30 per cent. Including Indus dividend receipt of Rs.3,623 million, the company has delivered highest ever standalone ‘Profit After Tax’ (PAT) of Rs.10,117 million, nearly double the previous quarter.

Brand Idea continued its subscriber growth momentum with 3.2 million net new customer additions, now servicing 139 million quality base as ‘Average Revenue Per User’ (ARPU) improved to Rs.181 (Rs.173 in Q4FY14) and MoU/Subscriber increased to 401 minute (397 minute in Q4FY14). The company continued its journey of strengthening its competitive market standing with VLR subscriber market share climbing to 17.7 per cent (May 2014) and Revenue Market Share (RMS) @ 16.6 per cent in Q4FY14, an increaseof 0.9 per cent compared to Q4FY13.

This quarter, Idea reversed the falling ‘Average Realisation per MB’ (ARMB) data rate trendby improvement of 1 paisa to 26.3 p (vs. 25.3 p in Q4FY14). The explosive mobile data volume growth and ARMB improvement has helped company deliver 23.6 per cent mobile data revenue growth. The net mobile data consumer base has risen in the quarter by 2.6 million to 27.9 million. The blended data ARPU (2G+3G) also improved to Rs.108 and usage per data subscriber is at 409 MB, among the highest in industry. Further, the company launched its 3G services in Punjab service area from 29 May 2014 extending Idea’s own ‘High Speed 3G Broadband’ Services presence to 11 service areas covering 72 per cent of its subscriber base.

In June 2014, the company successfully completed its ‘Qualified Institutions Placement’ (QIP) and allotted 223.9 million fresh equity shares at an issue price of Rs.134 per equity share (including a premium of Rs.124 per equity share), aggregating to Rs.30,000 million. Both foreign and Indian large institutional investors evinced strong interest for Idea’s fresh capital. With additional equity infusion and strong cash profit of Rs.20,230 million in the quarter, Idea has reduced its net debt by Rs.52,087 million to Rs.139,769 million. The net debt to annualised EBITDA ratio now stands at 1.54, providing the company sufficient headroom to participate in the forthcoming spectrum auction.

For Q1FY15, on consolidated basis including Indus 16 per cent contribution, Idea revenue grew by 15.6 per cent against same quarter year ago and EBITDA rose by 20.9 per cent, driving the EBITDA margin to 33.2 per cent. The consolidated PAT at Rs.7,282 million has grown sharply by 57.4 per cent from Rs.4,627 million in Q1FY14.

The strong consumer demand and brand affinity, expanding network footprint and spectrum portfolio and steady cash flows from operations reaffirms Idea’s ability to deliver consistent, competitive, responsible and profitable growth. The company is well geared to meet all volatile, uncertain, complex and ambiguous developments and remain on course of its mission to improve its market standing both in mobile voice and data business.

Notes:

  1. Idea Standalone represents Idea, and its 100 per cent subsidiaries. Effectively, this encompasses all operations, excluding the joint venture i.e.Indus.
  2. Idea Consolidated represents Idea Standalone and proportionate consolidation of Indus (@16 per cent).
  3. 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.
  4. New Service Areas represent seven service areas of Orissa, Tamil Nadu, J&K, Kolkata, West Bengal, Assam and North East.
  5. Cash profit is calculated assummation of PAT, Depreciation and Amortisation, charge on account of ESOPs and deferred tax, for the relevant period.
  6. 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 16.6 per cent (Q4FY14). 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, India's first truly multinational group. The group operates more than 30 countries, is anchored by an extraordinary force of over 136,000 employees belonging to 42 nationalities, and derives over 50 per cent of its revenues from operations outside India.