IDEA CELLULAR LIMITED - QUARTERLY RESULTS - Q2 FY 15 (SEPTEMBER 2014) - REVENUE UP 20%; PAT UP 69%

IDEA CELLULAR LIMITED

K.M.BIRLA CHAIRMAN

QUARTERLY RESULTS

Q2 FY 15 (SEPTEMBER 2014)

HIMANGSU KAPANIA, MD

Highlights – Q2 FY15

S t a n d a l o n e Results

1– R e v e n u e : Rs.75,673 mn ,

2. E B I T D A : Rs.2 2,394 mn ,

3-P A T : Rs.7,794 mn

C o n s o l i d a t e d  R e s u l t s

1–R e v e n u e : R s.75,699 mn ,

2-E B I T D A Rs .24907 mn ,

3-P A T Rs .7,559 mn

CONSOLIDATED RESULTS

TABLE (Rs.In Mlns)

IDEA	Q2 FY15	Q1 FY15	Dif% QoQ	H1FY15	H1FY14	Dif% YoY
TOTAL REVENUE	75699	75610	0.12	151309	128620	17.64
EBITDA	24907	25038	-0.52	49945	40115	24.5
EBITDA%	32.90%	33.10%	-0.6	33%	31.20%	5.77
PBT	11674	11219	4.06	22893	14171	61.55
PAT	7559	7282	3.8	14841	9103	63.03
CASH PROFIT	18971	18372	3.26	37343	34429	8.46

On a FV of Rs.10, the EPS during Q2 FY15 was Rs.2.11, compared to Rs.2.16 in Q1 FY 15 and Rs.1.35 in Q2 FY 14. 

Compared to the Year ago quarter, the Q2 FY 15 Revenue has grown 19.7%; EBITDA has grown 27.2%; PAT has grown 68.9%; DATA Revenue has grown 93.2%; Total Minutes of use has grown 17%.

Idea Cellular has reversed the last 2 years trend of sequential revenue decline during the seasonally weak ‘July to September’ quarter due to contraction in ‘Voice Minutes of Use’, with an absolute revenue growth of Rs. 111 million.

Idea standalone Q2FY15 revenue at Rs. 75,673 million has robust YoY growth @19.8% on the back of 17% annual increase in Voice MoUs and 125.9% growth in ‘Mobile Data Volume’.

During this quarter, the company carried 162.5 billion minutes on its network , less pronounced seasonal quarterly decline of 1.7% , in comparison to 5.8% minute decline in Q2 vs Q1FY14. In line with the emerging digital connectivity demand, Mobile Data volume exploded to 39.4 billion MB on its 2G+3G platform @ 21.3% QoQ growth, reaffirming consumer preference for brand Idea.

While the Voice rate realisation was under pressure, but 22.5% quarterly jump in Mobile Data revenue, contributing 14.0% to service revenue, helped Idea improve ‘Average Realisation per Minute’ (ARPM) by 0.8 paisa from 45.1p in Q1FY15 to 45.9p in Q2FY15. The ‘Value Added Service‘ (VAS) contribution has improved sharply to 21.1% of service revenue, a gain of 4.9% over last one year

The standalone EBITDA of Rs. 22,394 million grew by 29.5% on YoY basis due to multiple drivers including scale benefit, better cost management and robust net subscriber addition , voice minutes and data volume growth. Idea improved its EBITDA margin by 2.2% during last one year to 29.6%.

Including Indus dividend receipt of Rs. 1,026 million, the company has delivered excellent ‘Profit After Tax’ (PAT) at Rs.7,794 million, nearly double the Q2FY14 PAT of Rs. 3,984 million.

Brand Idea continues its high subscriber growth momentum with 4.6 million net new customer additions in the quarter , now servicing 143.6 million EoP customer base as ‘Average Revenue Per User ’ (ARPU) improved to Rs. 176 (Rs. 164 in Q2FY14) and MoU/Subscriber increased to 384 minutes (368 minutes in Q2FY14). The company continued its journey of strengthening its competitive market standing with VLR subscriber market share climbing to 17.8% (August 2014) and Revenue Market Share (RMS) in Q1FY15 @ 17.1%, an increase of 0.9% compared to Q1FY14.

Idea managed to maintain the mobile data ‘Average Realisation per MB’ (ARMB) at 26.5paisa (vs 26.3p in Q1FY15). The explosive Mobile Data volume growth and steady ARMB has helped Mobile data quarterly revenue cross Rs. 10 billion mark. The Mobile Data consumer base has risen in this quarter by 3.1 million to 30.9 million. The blended data ARPU (2G+3G) has also improved to Rs. 119 and ‘Usage per data subscriber’ is now at 447 MB. The 3G (Voice+Data) customer grew steadily to 13.3 million but still represents only 9.3% of Ideas’ total subscriber base.

In comparison, the 3G phone penetration among Idea subscribers is improving and over 17% of Idea users own high speed 3G devices.

In July 2014, company allotted 51.84 million equity shares at an issue price of Rs.144.68 per Equity Share (including a premium of Rs. 134.68 per Equity Share) , aggregating to approx.Rs.7,500 million , on preferential basis to its telecom partner - Axiata Investments 2 (India) Limited , an affiliate of Axiata Group .

With additional Equity infusion and strong Cash Profit of Rs. 18,155 million in the quarter, Idea has reduced its Net Debt by Rs. 21,500 million to Rs. 118,269 million.

The Net Debt to Annualised EBITDA ratio stands at 1.32, providing the company sufficient headroom to participate in the forth coming 900 MHz spectrum renewal auction .

For Q2FY15, on consolidated basis including Indus 16% contribution, Idea revenue grew by 19.7% against same quarter year ago and YoY EBITDA rose by 27.2 %, driving the EBITDA margin to 32.9%. The consolidated PAT at Rs. 7,559 million has grown sharply by 68.9% from Rs. 4,476 million in Q2FY14.

The strong consumer demand & brand association , expanding 2G & 3G network footprint , competitive spectrum portfolio with steady Cash flows from Operations affirms Idea ability to deliver consistent, competitive, responsible and profitable growth. The company is well geared to meet all volatile, uncertain, complex and ambiguous developments and remains 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% 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%).

3.   Established Service Areas represent 15 service areas namely Maharashtra & Goa, Gujarat, Andhra Pradesh, Madhya Pradesh & Chhattisgarh, Delhi, Kerala, Haryana, Uttar Pradesh West & Uttaranchal, Uttar Pradesh East, Rajasthan, Himachal Pradesh, Punjab,Karnataka, Mumbai and Bihar service areas.

4.   New Service Areas represent 7 service areas of Orissa, Tamil Nadu, J&K, Kolkata, West Bengal, Assam and North East 

5.   Cash Profit is calculated as summation of PAT, Depreciation & 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 17.1% (Q1FY15).

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, fertilizers, life insurance and financial services industries

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