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Bharti Airtel Q2 net profit slips 4.9 percent
TT Correspondent |  |  26 Oct 2016

Bharti Airtel Limited (Bharti Airtel), on Tuesday announced its audited consolidated results for the second quarter ended September 30, 2016. It reported a 4.9 percent year-on-year (y-o-y) drop in its consolidated net profit at Rs 1,461 crore for the quarter ended September 30, 2016. Bharti Airtel reported a net profit of Rs 1,536 crore in the corresponding year-ago period.

The consolidated revenues for Q2’17 at Rs 24,652 crore grew 5.6% Y-o-Y (3.4% reported Y-o-Y) on an underlying basis (viz. adjusted for Africa divested operating units and tower assets sale). Consolidated revenue growth muted by 3.3% on account of full quarter impact of Nigeria currency devaluation. Consolidated mobile data revenues at Rs 4,536 crore grew by 21.0% Y-o-Y on underlying basis.

India revenues for Q2’17 at Rs 19,219 crore grew by 10.1% Y-o-Y. This was led by healthy growth of 20.9% in Digital TV, 19.2% in Airtel Business, 14.9% in Homes and 7.9% in Mobile (net revenues up 10.3%) on Y-oY basis. Mobile Data revenues at Rs 3,576 crore grew by 23.6% Y-o-Y, led by increase in the Data customer base by 22.8% and traffic by 54.9%. Mobile Broadband customers increased by 62.2% to 41.3 Mn from 25.5 Mn in the corresponding quarter last year. Data ARPU has moved up by Rs 8 Y-o-Y to Rs 201 in Q2’17, led by 30.6% increase in usage per customer. Mobile Data revenues now contribute to 24.7% of Mobile India revenues vis-à-vis 21.5% in the corresponding quarter last year.

Over the last 2 quarters, Bharti Airtel had divested 2 country telecom operations (Burkina Faso & Sierra Leone) in Africa. Effective current quarter, financials and operational parameters have been shown for balance 15 countries and the historical periods have been re-instated to make them comparable. In constant currency (1st Mar’16) terms, Africa underlying revenues grew by 4.7% Y-o-Y (3.7% reported Y-o-Y) continuing the growth trajectory of past few quarters. Data revenues at $ 147 million grew by 24.9% Y-o-Y, led by increase in Data customer base by 32.3% and traffic by 116.8%. Data ARPU moved to $ 2.9 from $ 3.0 in the corresponding quarter last year. Data revenues now contribute to 16.3% of overall Africa revenues vis-à-vis 13.6% in the corresponding quarter last year. Africa underlying EBITDA margin is up Y-o-Y by 5.3% (up 4.6% reported Y-o-Y) to 23.5%. Active Airtel Money customer base at 9.1 million, boosting the total transaction value on Airtel Money platform by 53.7% to $ 3.8 billion.

Consolidated EBITDA at Rs 9,466 crore grew 14.5% Y-o-Y with EBITDA margin expanding by 3.7% to 38.4% with margins improvement in both geographies. The consolidated EBIT of Rs 4,504 crore represents a Y-o-Y growth of 12.3%, despite higher spectrum amortization in India. Net interest costs of Rs 1,603 crore have risen from Rs 1,053 crore in the corresponding quarter last year – largely due to increased spectrum related interest costs. During the quarter, except for Nigeria, currencies were stable in most of the geographies, hence resulted in lower forex and derivative losses of Rs 302 crore compared to Rs 822 crore in the corresponding quarter last year. After accounting for exceptional items (net gains of Rs 91 crore), the Consolidated Net Income for the quarter stands at Rs 1,461 crore compared to Rs 1,536 crore in corresponding quarter last year.

The company’s consolidated net debt excluding the deferred payment liabilities to the DOT and finance lease obligations has decreased to $ 6,547 million from $ 6,891 million in the previous quarter. Net debt to EBITDA ratio (LTM) for the quarter improved to 2.28 from 2.37 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 7.4% from 9.1% in the corresponding quarter last year.

“Our strong focus on enhancing customer experience and building a robust network has resulted in continued acceleration of revenue market share. Overall Revenue momentum in India has been sustained during Q2 with a growth of 10.1% Y-o-Y. This is primarily due to the strong performance of our non-mobile businesses which grew in aggregate at 18.8% Y-o-Y, albeit our mobile business has experienced a slowdown in growths due to free services being offered by a new operator. But, we remain excited about the long term opportunity in India and believe that with the recently acquired spectrum, we are well positioned to lead India’s data revolution,” said Gopal Vittal, MD and CEO, India & South Asia.

“Underlying Africa revenue growth for the quarter was 4.7% Y-o-Y, backed by our focus on profitable top line growth, led via localized distribution, stronger data networks and our war on waste program. Customer growth with focus on quality helped garner the highest net adds over the past 4 quarters, with churn remaining stable. With over 23% of our customers now using data, consumption and revenues have grown by 116.8% & 24.9% Y-o-Y respectively. Airtel Money also continues to lead with transaction values growing over 53% Y-o-Y, and base expansion of 15.3% Y-o-Y. As a result, our EBITDA margin has improved by 5.3% Y-o-Y on an underlying basis,” said Raghunath Mandava, Chief Operating Officer, Africa.

    
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26 Oct 2016(IST)  
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