Bharti Airtel Q1 profit dips by 31% to Rs 1,462 crore

NEW DELHI:India’s top telecom service provider Bharti Airtel has posted Rs. 1,462 crore net profit for the April-June quarter with a 31 % decline compared to the profit of Rs. 2,113.2 crore in the year-ago period.

Despite posting falling profits, Airtel is still leading top position among telecom service providers in India and posted a growth of 10 % to end 2015-16 fiscal with revenues of Rs 70, 844 crore, according to the latest survey conducted by Voice and Data, CyberMedia group.

Similarly, telecom operator had said its net profit stood at Rs 1,290 crore, up by 2.8 % for the fourth quarter ended March 31, 2016.

"The consolidated revenues for Q1’17 at Rs 25,546 crore grew 8.4% Y-o-Y (7.9% reported Y-o-Y) on an underlying basis, adjusted for Africa divested operating unit and tower assets sale. Consolidated mobile data revenues at Rs 4,640 crore grew by 34.1% Y-o-Y," the company said in a statement.

India revenues for Q1’17 at Rs 19,155 crore grew by 10.3% Y-o-Y (net revenues up 11.9% Y-o-Y). This was led by healthy growth of 9.1% in Mobile, 11.0% in Homes, 22.2% in Digital TV and 10.4% in Airtel Business on Y-o-Y basis. The Company has realigned its India segment reporting in line with management reorganisation.

Consequently, Airtel Business also now includes the erstwhile Corporate fixed line voice and fixed line data business which was hitherto reported with Telemedia segment. Mobile Data revenues cross Rs 3,500 crore and at Rs 3,525 crore grew by 35.1% Y-o-Y, led by increase in the Data customer base by 19.1% and traffic by 54.9%. Mobile Broadband customers increased by 68.3% to 36.6 Mn from 21.7 Mn in the corresponding quarter last year. Data ARPU has moved up by Rs 21 Y-o-Y to Rs 202 in Q1’17, led by 28.1% increase in usage per customer. Mobile Data revenues now contribute to 23.7% of Mobile India revenues vis- à-vis 19.2% in the corresponding quarter last year.

"In constant currency (1st Mar’16) terms, Africa revenues adjusted for the impact of divested operating unit and tower assets grew by 3.8% Y-o-Y (2.0% reported Y-o-Y). Data revenues at $ 154 million grew by 31.2% Y-o- Y, led by increase in Data customer base by 26.0% and traffic by 106.2%. Data ARPU increased to $ 3.2 from $ 3.1 in the corresponding quarter last year. Data revenues now contribute to 16.5% of overall Africa revenues vis-à-vis 12.9% in the corresponding quarter last year. Africa underlying EBITDA margin is up Y-o-Y by 3.6% to 22.5%," it said.

Active Airtel Money customer base at 8.6 million, boosting the total transaction value on Airtel Money platform by 62.0% to $ 5.1 billion.
Consolidated EBITDA at Rs 9,591 crore grew 16.4% Y-o-Y with EBITDA margin expanding by 2.7% to 37.5%, margins improvement in both the geographies. The consolidated EBIT of Rs 4,534 crore represents a Y-o-Y growth of 8.1%, despite higher spectrum amortization in India. Net interest costs of Rs 1,631 crore have risen from Rs 1,124 crore in the corresponding quarter last year – largely due to higher spectrum interest costs.

During the quarter, Nigerian Naira devalued by 42.1%, net forex losses of Rs 748 Crore on account of this has been classified under exceptional items. Except for Nigeria, stable currencies in most of the geographies resulted in lower forex and derivative losses of Rs 309 crore compared to Rs 797 crore in the corresponding quarter last year.

After accounting for exceptional items (net gains of Rs 82 crore), the Consolidated Net Income for the quarter stands at Rs 1,462 crore compared to Rs 2,113 crore in corresponding quarter last year. Q1’16 Net Income of Rs 2,113 crore has been re-instated to Ind-AS from previously reported IFRS figures which includes an exceptional gain of Rs 556 crore on account of this re- instatement.

"The company’s consolidated net debt excluding the deferred payment liabilities to the DOT and finance lease obligations has decreased to $ 6,891 million from $ 7,451 million in the previous quarter. Net debt to EBITDA ratio (LTM) for the quarter improved to 2.37 from 2.46 in the previous quarter. High spectrum costs and consequent increase in associated amortization costs has resulted in deterioration of Return on Capital Employed (ROCE) to 7.6% from 8.6% in the corresponding quarter last year," it added.

"Over the past 24 months, Bharti Airtel has undertaken tower assets sales in 11 countries (with 9 closed and settled and 2 to be closed shortly) and divested 2 country telecom operations (Burkina Faso and Sierra Leone) - for a sum total consideration of $ 3.25 billion. All the sale proceeds/agreements are denominated in USD or Euro and have helped in deleveraging such that acquisition bank debt in Airtel Netherlands is zero as on date. These proceeds have also helped in reducing foreign exchange risk as well as ongoing tower capex and management, thereby allowing a much sharper focus on customer centric activities in the market," said Gopal Vittal, MD and CEO, India & South Asia in a statement.

“The year has begun well with revenue growth of 10.3% Y-o-Y and continued revenue market share gains. In continuation of our Project Leap announcement, we have now transparently opened up our entire mobile network to our customers so as to partner them in striving to deliver a world class experience," said Christian de Faria, Executive Chairman, Africa in a statement.

“Airtel Africa registered organic revenue growth of 3.8% Y-o-Y despite headwinds due to implementation of stringent KYC norms in a few countries. With over 21% of our customer now using data, volumes have more than doubled. Airtel Money continues to lead with transaction values growing over 62% Y-o-Y. Our continued focus on driving cost efficiencies led to EBITDA margin improvement for a fourth consecutive quarter.