Reliance beats earnings expectations on one-off gains

India’s Reliance Communications has beaten earnings expectations for the fourth quarter thanks to an increase in revenue from one-off gains.

The operator – controlled by Indian billionaire Anil Ambani – said that net income fell to INR3.03 billion ($55.2 million) in the fourth quarter from INR3.32 billion in the same period last year, with revenues up 12% to INR59.56 billion.

Analysts polled by Reuters had been expecting net income of INR1.29 billion on revenues of INR53.47 billion.

India’s Reliance Communications has beaten earnings expectations for the fourth quarter thanks to an increase in revenue from one-off gains.

The operator – controlled by Indian billionaire Anil Ambani – said that net income fell to INR3.03 billion ($55.2 million) in the fourth quarter from INR3.32 billion in the same period last year, with revenues up 12% to INR59.56 billion.

Analysts polled by Reuters had been expecting net income of INR1.29 billion on revenues of INR53.47 billion.

Nevertheless, the company’s net debt of $7.2 billion continues to trouble investors, as interest payments on the borrowings exert downward pressure on profitability.

Reliance (Mumbai, India) has been trying to sell its infrastructure division to improve its balance-sheet position and claims to be in talks with private-equity companies over the sale of a stake in its undersea cable assets.

It has also shown a willingness to strike potentially lucrative network-sharing deals, including a tie-up with Reliance Industries (Mumbai, India) – owned by Anil’s brother Mukesh – for the rental of capacity on its fiber-optic network.

Reliance also appears to have been helped by a lessening of competition in India’s mobile-phone market after authorities cancelled licenses held by a number of operators last year.

In its earnings statement, it said it had been able to successfully hike tariffs by 20% in a move aimed at delivering improved revenue per minute and greater profitability.

Average revenue per user rose to INR128 per month from INR119 in the last three months of 2012.

The company also unveiled what it described as a large-scale network expansion plan involving the establishment of 2G roaming agreements with operators in other parts of the country.

Reliance said this would expand its 2G network footprint by 10,000 base stations and bring in an addressable market of more than 150 million customers.

It expects to finalize agreements with other operators involved in the scheme by the end of September 2013.