State run telco MTNL has reported a profit of Rs 9,600 crore for the quarter ended March 31, 2014 (Q4-FY14), on account of an exceptional items totalling Rs 10,216.1 crore.
While the company hasn’t disclosed any specific information on what this exceptional item is, it has noted that it has accounted the excess amount of pension already paid w.e.f 01.10.2000 against recoverable amount from the government as an exceptional item, following the government’s decision to take over the pension liabilities of the telco as per the pattern of BSNL.
MTNL notes that the Indian government has decided to take over the liability for payment of pensionary benefit w.e.f 01.10.2000 as per the pattern of BSNL. This came into effect from March 3, 2014.
Without the exceptional items, the company would’ve posted a loss of Rs 118.5 crore for the quarter as against Rs 976.8 crore loss in the previous quarter. However, It’s worth noting that MTNL has also written back provision worth Rs 1,254.2 crore made for employee retirement benefits following the government’s order, which has significantly helped the profits for the quarter. In the previous quarter, MTNL had reported employee retirement benefit cost of Rs 506.4 crore.
MTNL notes that it has written back provision made earlier for such employees except for the additional amount due to the difference in BSNL and MTNL pay scales. The telco also notes that it has discontinued accounting for the pensionary benefits of the said employees.
The total operational revenue for MTNL was at Rs 841.7 crore for the quarter, down from Rs 853.3 crore in the previous quarter and Rs 918.6 crore in the same quarter last year.
FY14 results: The exceptional item mentioned above along with lower employee retirement costs and the BWA spectrum refund in the previous quarter also bumped up the telco’s profits to Rs 8,322 crore for the year ended March 31, 2014, as against Rs 5,321.1 crore loss in the previous year.
The total revenue was at Rs 3,391.7 crore for the year, down from Rs 3,428.7 crore in the previous year.
Fixed Line Services
Basic (Fixed line) services reported revenues of Rs 2,646 crore for the year FY14, down from Rs 2,696.1 crore in the previous year. Basic (Fixed line) services still accounts for a majority of MTNL’s revenues, contributing 77.53% of the telco’s Rs 3,412.6 crore revenue (includes inter-segment revenue, hence higher than net revenue reported earlier), down from 78% in the previous year.
The segment has reported a profit before tax of Rs 4,685.3 crore for the year, as compared to a loss before tax of Rs 3,136.8 crore in the previous year. Just like last year, MTNL hasn’t disclosed its segment revenues for the quarter Q4-FY14.
Revenue from Cellular services grew to Rs 766.9 crore for the year, from Rs 759.3 crore in the previous year. The segment posted a net loss of Rs 105 crore for the year, an improvement from Rs 479.8 crore loss in the previous year. Cellular services contributed around 22.5% of MTNL’s revenues for the year, marginally up from 21.97% in the previous quarter.
During the quarter, MTNL had mentioned plans to launch public WiFi hotspots in Mumbai and Delhi for its customers. The telco is apparently tying up with malls, food courts and coffee shops to provide unlimited WiFi service at speeds of 8Mbps to its customers. It has partnered with C-bot for this initiative.
Download – Financials