Bharti Airtel profit continues to fall, reports Rs 86 crore Q3 net
India revenue fell 3 per cent on year and 1 per cent sequentially.
Consolidated net profit in the three months ended December was 72 per cent lower from a year earlier and a drop from Rs 119 crore reported for July-September, including a one-time gain. This was the 11th straight quarter of declining profit for Airtel.
India’s second-largest telecom company said quarterly revenue from local mobile services was Rs 10,189 crore, less than Jio’s Rs 10,383 crore, underlining the Mukesh Ambani-owned telco’s growing strength. Jio reported a fifth straight quarter of profit at Rs 831 crore, up 65 per cent.
Airtel’s net exceptional gain of Rs 1,017 crore was “largely on account of deconsolidation of Airtel Payments Bank,” the company said in a statement Thursday. The telco also had a tax write-back of Rs 579 crore. Before exceptional items, Airtel posted a Rs 1,041 crore consolidated loss for the just-ended quarter. Losses for the telco's India business, before exceptional items, came in at Rs 9 72 crore.
India revenue fell 3 per cent on year and 1 per cent sequentially, but the decline was arrested by the initial effects of the telco’s minimum average revenue per user (ARPU) plans and higher data consumption. Mobile services contributed 69 per cent of the India revenue.
Its India mobile ARPU rose 4.1 per cent on quarter to Rs 104, but some users chose to leave the operator rather than recharge at a higher rate. ARPU gained for the first time after 10 quarters, suggesting that the worst could be behind it.
Airtel’s India subscriber base fell 14.6 per cent, or almost 49 million, sequentially to end the quarter at 284.2 million. The percentage of people leaving the Airtel network rose to 7.3 per cent from 4.1 per cent in the second quarter. This dragged overall numbers down over 10 per cent on quarter to 384.7 million across India, South Asia and 14 African countries.
“Effective this quarter, we have modified our customer base measurement to represent only transacting and revenue-generating customers,” Gopal Vittal, managing director, India & South Asia, said in the statement. He said over 11 million 4G customers had been added, almost tripling mobile data volumes on year.
Consolidated revenue rose 1 per cent on year to Rs 20,519 crore and from Rs 20,422 crore in the preceding quarter, partly helped by its Africa operations, where revenue grew over 15 per cent on year. Net income, before exceptional items, for the continent surged to Rs 551.8 crore from Rs 176.2 crore a year ago, propelled by increased consumption of voice and data services.
Airtel shares climbed 1.3 per cent to Rs 307.15 at the close on the BSE on Thursday, a day after the company said the Africa unit would raise $200 million from Qatar Investment Authority to pare debt. The earnings were announced after market hours.
Airtel’s earnings before interest, tax, depreciation & amortisation (Ebitda) for the quarter stood at Rs 6,307 crore, down 0.5 per cent on quarter, compared with an over 7 per cent sequential fall in the July-September period.
“Airtel’s consolidated Ebitda appears to have bottomed out and with India mobile revenues largely flattish sequentially in the December quarter, one can expect an improvement on this score in the fiscal fourth quarter, by when the full-beneficial impact of the minimum recharge plans should kick in,” said Naveen Kulkarni, a telecom analyst and head of research at Reliance Securities.
Capital expenditure for the quarter was Rs 6,568 crore compared with Rs 6,466 crore a year ago. “We have deployed 24K broadband sites during the quarter and remain committed to invest in capacities ahead of the demand curve,” said Vittal.
Net debt rose to Rs 10,63,674 crore from Rs 9,17,139 crore a year earlier but was lower than about Rs 11,32,042 crore in the second quarter. The company said its net finance costs fell about 7 per cent to Rs 1,945 crore in the quarter largely on account of lower forex fluctuations.
Wider acceptance of Airtel’s bundled offers resulted in traffic growth of 42.1 per cent to 703 billion minutes. Sequentially, voice minutes on the network and voice usage per subscriber rose 1.4 per cent and 5.8 per cent, respectively. Mobile data usage per customer rose 14 per cent sequentially.