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Tata Comm reports Rs 1,413Cr net profit in Q3 FY17 after Neotel sale

Tata Communications has reported a consolidated net profit of Rs 1412.8 crore for the quarter ended December 2016 (Q3 FY17), which is up significantly from Rs 39.9 crore profit in the previous quarter. The company mentioned that its profits widened due to an “exceptional one-time gain” after it sold a majority stake in its Africa ISP Neotel for $428 million.

The company’s consolidated overall revenues stood at Rs 4360 crore during Q3-FY17, down 3.3% quarter-on-quarter (QoQ) from Rs 4509 crore. In the same quarter last year, Tata Comm’s overall income stood Rs 4520 crore. Tata’s communication business involves services like managed networks, voice services, cloud and storage hosting, unified communications, and owns data centers in many countries. It categorizes its offerings mainly into two segments: Data and Voice.

Segmented revenues

Revenue from data services accounted for a majority (59.1%) of the company’s income which stood at Rs 2580.5 crore during Q3-FY17 up 8.1% Year-on-Year (YoY) from Rs 2369.7 crore. Voice segment revenues stood at Rs 1659.8 crore in the same quarter, down 17.3% YoY from Rs 2009.3 crore. Note that the company said it made more revenue selling its data services to enterprise customers than as a data service provider to non-enterprise customers.

Tata Comm’s Voice business reported a profit of Rs 59 crore for the quarter, which narrowed down from Rs 96.6 crore in the previous quarter. Data segment business reported a profit of Rs 89.9 crore during Q3-FY17, which narrowed down from Rs 126.1 crore in the previous quarter.

Tata’s payment solutions which manage and operates a nationwide network of ATMs in India reported revenues of Rs 121.3 crore for the quarter, down 20.4% QoQ from Rs 152.5 crore. The segment’s losses stood at Rs 47.5 crore, which increased from Rs 24.7 crore in the previous quarter.

Other financial and operating highlights

-Total voice minutes hosed by the company decreased to 10.5 billion minutes from 11.2 billion in the previous quarter.

-Overall EBITDA margin stood at Rs 591.9 crore for the quarter, down from Rs 779.2 crore in the previous quarter.

-Tata-owned telecom provider Neotel which was recently sold to Liquid Telecom reported Profit After Tax (PAT) of Rs 53.9 crore for Q3-FY17, up from Rs 11.7 crore in the previous quarter. Neotel’s gross revenue stood at Rs 453.2 crore, up 7.7% YoY from Rs 420 crore.

Image Credits: Flickr user Kārlis Dambrāns under CC BY 2.0

Download: Financials | Quarterly Report

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