Airtel results well received, despite profit drop

Airtel results well received, despite profit drop

31 JUL 2013

Bharti Airtel announced another fall in quarterly profits, but its results were welcomed by observers who noted that key metrics for the company’s core Indian mobile operations were heading in the right direction.

Sunil Bharti Mittal, the company’s chairman, noted: “Our results for the quarter reflect the overall stability of our operations, and demonstrate the potential for growth, particularly seeing robust data growth across all geographies.”

“Results for Airtel India reflect rationality returning to the sector which needs to be complemented by a more enabling regulatory environment for a deeper penetration of telecom and broadband services,” he continued.

The company reported a profit attributable to shareholders of INR6.89 billion ($113 million), down 10 per cent from INR7.62 billion, on revenue of INR202.64 billion, up 9 per cent from INR185.6 billion.

It noted a loss from exchange rate fluctuations, compared with a gain last year, and increased tax charges, mainly relating to its Africa operations.

The lion’s share of revenue, INR141.23 billion, came from its Indian operations, with growth of 11.6 per cent year-on-year. This business saw a net profit of INR14.79 billion, down 6.4 per cent from INR15.8 billion.

Its Mobile Services India unit saw EBIT of INR20.98 billion, up 29 per cent from Q1 2012, on revenue of INR116.01 billion, up 11 per cent.

It noted an increase in ARPU in its incredibly competitive home market, driven by both increased voice charges and usage.

Revenue growth in Airtel’s international operations was slower, with revenue increasing by 4.6 per cent to INR63.22 billion. This business saw a loss of INR7.03 billion, down from INR8.16 billion.

Revenue for the Africa segment was flat, at around $1.06 billion, although these were also bolstered in the most recent period by the inclusion of 49 days’ worth of revenue following the acquisition of Warid Uganda.

The company said that mobile termination rates had been revised downward in several key countries in Africa, including Nigeria.

For the Africa operation, there was a net loss of $106 million, down from $124 million.

Airtel had a total of 263.18 million subscribers, up 5 per cent year-on-year. Of these, 190.95 million were in India, up 2 per cent, and 72.23 million were international, up 15 per cent.

It said that mobile data “continues its growth trajectory”, increasing by 91.5 per cent in India and 65.8 per cent in Africa.

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Steve Costello

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