Bharti Infratel Q3 profit up 11%; higher finance income, lower taxes help
Consolidated revenue declined 0.40 per cent to Rs 3,640 crore in Q3FY19.
India’s sole listed tower company’s consolidated net profit for the October-December period came in at Rs 648 crore, up from Rs 585 crore a year back. Net finance income for the quarter came in at Rs 601 crore compared with an expense of Rs 510 crore a year ago.
Quarterly consolidated revenue, however, was flat at Rs 3,640 crore, the company said in a statement Wednesday.
The company’s results were announced after market hours. Bharti Infratel's stock closed flat at Rs 277.90 on BSE Wednesday.
“The consolidation and integration phase in Indian telecom industry along with exits of co-locations is largely over,” Akhil Gupta, chairman at Bharti Infratel, said in the statement. “We are now looking at the next phase of network and related infrastructure roll outs by operators—first for 4G and subsequently for rapidly evolving 5G—to cater to ever growing demand for data.”
“These would require large investments, thereby presenting potential for sizeable growth for passive infrastructure companies going forward,” he added.
For the quarter though, the rapid shrinking of the industry—primarily the merger of Vodafone India and Idea Cellular—continued to weigh on the tower company’s operational income.
The company’s consolidated earnings before interest, tax, depreciation & amortisation (Ebitda) fell 6% on-year to Rs 1,513 crore for the quarter ended December 2018, while operating free cash flow rose 13% on-year to Rs 1,093 crore during the period.
Bharti Infratel’s tower base increased by 1,294 on-year and 178 sequentially to 92,301 in the fiscal third quarter. But the tower company alone lost a whopping 39.027 co-locations on-year and 173 on-quarter, reducing its total count to 174,449 as of December-end.
Revenue from operations included exit charges—or charges paid by clients to exit locations ahead of a contracted term—of Rs 55.3, the company said.
Co-locations are points where a tower company deploys mobile telecom antennae of multiple carriers on a single structure.
The exits, accordingly, reflected in a lower average sharing factor, which dropped to 1.89 from 2.04 in the September quarter. The sharing revenue per tower a month, in turn, fell nearly 1.4% on-quarter to Rs 75,775.
Bharti Infratel’s tower base includes units by virtue of its 42% stake in Indus Towers. The two companies though are in the process of merging their operations, a deal which is expected to be completed in the first quarter of the financial year starting April 1, 2019. The new entity, which would create the largest mobile tower operator in the world outside China, is estimated to have 163,000 towers across 22 telecom service areas in India.
Quarterly Ebitda margin expanded to 41.6% from 41.1% in the previous quarter.
Consolidated expenses for the December quarter totalled Rs 2,127.4 crore, up 4% on-year. The largest components were power & fuel at Rs 1,418.4 crore, up 9% on-year, followed by rent at Rs 305 crore, down 4%, while repairs & maintenance fell 11% to Rs 202.1 crore.