Reliance Jio Q4 net profit rises 65% to Rs 840 crore; revenues up 55%

The subscriber base crossed 300 million with a net addition of 26.6 million during the quarter

Jio, Reliance Industries’ telecom arm, on Thursday reported 64.7 per cent increase in its net profit to Rs 840 crore in the March quarter of 2018-19 on a year-on-year (YoY) basis. 

However, Jio missed the Street estimates for the fourth quarter, sequentially posting flat growth after its average revenue per user (ARPU) fell by 3 per cent sequentially to Rs 126.2.

Standalone revenues from operations came in at Rs 11,106 crore, up 7 per cent quarter-on-quarter (QoQ). The subscriber base, however, crossed 300 million with a net addition of 26.6 million during the quarter. 

Revenues were up 55.8 per cent while net profits were up 64.7 per cent on YoY. The standalone Ebitda (earnings before interest, tax, depreciation and amortisation) for Jio grew by 6.8 per cent QoQ to Rs 4,329 crore; on a YoY basis, however, it was a 60.7 per cent rise.

The Street had estimated 10 per cent growth in revenue. This is due to the growing base of JioPhone users, who join the Rs 501 Monsoon Hungama Plan. This works out Rs 99 per month per user, and, as Anshuman Thakur, head of strategy and planning at Reliance Jio, pointed out, it comes to Rs 86 per consumer per month after the goods and services tax. 

Jio’s ARPU has been slipping consistently — it was Rs 134.5 in the first quarter of the financial year. 

During the quarter, Jio transferred the fibre and tower undertaking to separate companies through a National Companies Law Tribunal-approved scheme of arrangement, which was completed with effect from March 31. 

Liabilities of Rs 1.07 trillion (which includes bank loans, capex creditors, etc) were transferred to these two companies, along with the tower and fibre assets, which deleverages the Jio balance sheet.

Thakur said the asset hive-off would not affect costs because more tenants would come on board. At the end of the March quarter, Jio’s net debt now stands at Rs 67,000 crore, down from Rs 91,000 crore in the previous quarter. These firms would be servicing the debt through their existing contracts.

Jio has entered into long-term usage agreements as anchor tenant for these assets, while the firms can also add more tenants. Sebi-registered Infrastructure Investment Trusts (Digital Fibre Infrastructure Trust and Tower Infrastructure Trust) have acquired a 51 per cent equity stake in these two entities, respectively. 

RIL said future capex on passive infrastructure assets would be undertaken by the two entities. Jio said it was not dependent on Reliance Communications (RCom) for the 850 MHz spectrum band and it had adequate spectrum of its own such that its services were not impacted as a result of the termination of the spectrum sale contract between the parties. 

“If required we can buy more spectrum from the market,” Thakur said.