Tata Communications Q3 net profit zooms to Rs 173.3 cr

Tata Communications Wednesday posted a multifold jump in its net profit at Rs 173.3 crore for the December 2018 quarter on account of one-time gain due to new regulation coming in to effect. The company had recorded Rs 10.12 crore in the year-ago period.

"During the quarter ended December 31, 2018, based on the Supreme Court directives, Trai issued notification stating new regulation on the access facilitation charges for cable landing stations. These directives would be effective from November 28, 2018. Accordingly, the company has recorded a one-time revenue of Rs 91 crore and operating & maintenance expense recovery of Rs 257 crore," Tata Communications said in a note. The company said the development also led to a one-time Ebitda (earnings before interest, tax, depreciation and amortisation) gain of Rs 348 crore this quarter.

The consolidated revenue rose three per cent to Rs 4,269.5 crore as against the year-ago period, with data services contributing 78 per cent of the overall revenue. The revenue was 4.9 per cent higher as compared with the September 2018 quarter, the company said in a statement. "Our data business continues to be strong and our growth services have been instrumental in our overall revenue growth.

"Despite operator consolidation headwinds, our traditional services business is steady. As we grow scale, we are confident of an upward momentum in our revenue growth and profit trajectory in coming quarters," Pratibha Advani, chief financial officer, Tata Communications, said. The company's 'growth services' comprise managed hosting, managed security services, broadcast, video streaming, and mobile new services, among others.

Vinod Kumar, managing director and group chief executive officer of Tata Communications, said the strategy adopted by the company is steering it on the right course towards its financial goals. Data business saw strong all-round growth, with revenue growing 14.1 per cent y-o-y. The company said revenue from 'growth services' witnessed "solid momentum", increasing 13.2 per cent over the year-ago period.

"Traditional services stabilised with revenue growth of 4.2 per cent quarter-on-quarter. Operator consolidation in India has affected this portfolio. While the revenue impact is largely over, we are still affected by higher access and co-location cost," the statement said. The consolidated net debt stood at USD 1,287 million, or about Rs 9,100 crore, at the end of December 2018.