Tata Comm incurs loss of Rs 250 cr in July-September
Tata Communications today registered consolidated loss of Rs 250 crore in the September quarter of 2017-18, chiefly because of its investment in sister concern Tata Teleservices.
The company had posted profit of Rs 39.96 crore in the same period a year ago.
Consolidated revenue declined 7.31 per cent to Rs 4,218 crore in the reported quarter, from Rs 4,509 crore in the previous fiscal.
Data business posted a revenue growth of 2.2 per cent, 'growth services' 40.5 per cent and traditional services 1.7 per cent year-on-year.
"PAT (profit after tax) recorded negative at Rs 250 crore on account of additional provision of Rs 186 crore as per the contractual obligation to Tata Sons on the Tata Teleservices investment and due to other one-time exceptional provisions of Rs 27 crore," Tata Communications said in a statement.
The company, in the results note, said it has invested in Tata Teleservices (TTSL), which is recognised at fair value through other comprehensive income.
"Based on the recent developments in TTSL, the company has recognised a loss of Rs 51,553 lakh in other comprehensive income for the quarter ended September 30, 2017," the note said.
Tata Sons has agreed to sell TTSL, which was reeling under debt of about Rs 40,000 crore, to Bharti Airtel.
The companies said the deal is on a no-debt, no-cash basis, implying Airtel is not taking over any of the about Rs 40,000 crore debt with Tata Teleservices and is neither paying any cash. Even 70-80 per cent of the Rs 9,000-10,000 crore deferred payments for spectrum that TTSL holds will be paid by the Tatas.
On the performance of the company, Tata Communications MD and CEO Vinod Kumar said: "Our portfolio continues to transform in line with our strategic intent to grow our digital infrastructure services. In addition to the accelerating performance of growth services, we are buoyed by the market response to our new cyber-security and IoT services. We continue to invest in our internal digitalisation programme to enhance future productivity and customer experience."
Stock of Tata Communications closed at Rs 712.05, down 2.41 per cent from its previous close, on the BSE today.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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