Unitech’s Q1 profits are hit by the losses in the telecom business
The telecom business of the Realty firm Unitech has resulted in huge losses and the consolidated balance sheet of the company is appearing red. Unitech had partnered with Telenor Group which is a Norwegian multinational telecommunications company. They had launched telecom services under the brand name of Uninor which never could capture the market share.
Realty firm Unitech today reported 91 % decline in its consolidated net profit at Rs 5.56 crore for the quarter that ended in June 2014. The company booked losses of nearly Rs 1,000 crore in erstwhile telecom business. Its net profit stood at Rs 62.89 crore in the year ago period.
The good news is that the total income from operations jumped more than two fold to Rs 1,522.12 crore in the first quarter of this fiscal against Rs 572.57 crore in the corresponding period of previous year. However the losses incurred from the telecom business had eaten into the profits of other businesses.
Unitech said in a statement that during the quarter, an extraordinary loss of Rs 990.73 crore arising due to wireless business was booked. Net profit for the quarter, therefore, was Rs. 5.56 crore only. The company is recovering from this huge blow of losses though.
Unitech explained the reason behind the sharp fall in net profit. However, profit after tax from ordinary activities during April-June quarter increased to Rs 991.47 crore compared with Rs 57.31 crore in the same period of previous fiscal.
During the first quarter, the company extinguished its liabilities and obligations related to wireless business to the tune of Rs 1,094.74 crore. The good news is that the company is totally free from the obligations of the telecom business and going forward, the company shall have no liability in this regard.
Source- Financial Chronicle
liabilities, Norwegian multinational telecommunications, Realty firm, telecom business, Telenor Group, Unitech
