Reliance Communications Profit Misses Estimates as Costs Climb
Net income fell 33 percent to 1.08 billion rupees ($17.9 million) in the three months ended June, from 1.62 billion rupees a year earlier, the Mumbai-based company said in a statement today. That lagged behind the 1.49 billion-rupee median of 18 analysts’ estimates complied by Bloomberg.
The carrier posted its 15th drop in profit in 16 quarters after finance costs increased as the rupee weakened 8.6 percent against the dollar last quarter. Billionaire Anil Ambani’s company remains mired in debt as mobile income slumps and operating costs surge, according to Harit Shah, a Mumbai-based analyst with Nirmal Bang Equities Ltd.
“Debt remains a concern as always,” Shah said before Reliance reported earnings. “With so much debt in hand, the rupee’s depreciation this quarter really took its toll.”
Shares of Reliance fell 6 percent to 131.30 rupees at the close in Mumbai trading, before the earnings announcement. They have gained 78 percent this year, compared with the 0.6 percent drop in the benchmark S&P BSE Sensex.