Railtel Corporation Of India (RAILTEL) Q4 05/06 earnings summary

Executive summary

• Expanded network infrastructure and customer base in FY06; network utilization and service revenue rose while net loss narrowed YoY.

• Focused on corporate leased lines and VPNs, with NLD licensing and network alliances intended to support broader commercial reach.

Financial highlights

• Revenue receipts were Rs 88 crore, up 34.68% YoY; P&L income was Rs 62.69 crore before Rs 2.25 crore of construction-period interest income was transferred to CWIP.

• Operating profit before interest, depreciation and tax was Rs 33.66 crore vs Rs 18.61 crore; net loss narrowed to Rs 10.01 crore from Rs 19.50 crore.

• Net loss per share improved to Rs 0.44 from Rs 0.83; total accumulated losses reached Rs 46.88 crore at 31 March 2006.

• Operating cash flow was Rs 50.75 crore, compared with Rs 30.65 crore in FY05.

Outlook and guidance

• MPLS-IP network was expected to be ready for commercial exploitation by June 2006; core routers were installed in 13 cities and edge routers in 24 of 25 cities.

• Planned cyber cafes at 82 railway stations, with contracts awarded; Wi-Fi hotspots were also proposed at select major stations.

• NLD service licence LOI had been issued, with the agreement pending; management expected to pursue corporate leased-line and VPN business under the licence.

• A Ministry of Railways MoU was planned to set FY07 physical and financial targets; network efficiency target was 99.5%.