Bharti Airtel Q4 net falls 78% to Rs82.9 cr
25 Apr 2018
Bharti Airtel, India's largest mobile operator by subscribers and revenue, has posted a 78-per cent fall in fourth-quarter net profit, at Rs82.9 crore impacted by the massive fall in revenues following the intense price war.
Bharti Airtel reported a net profit of Rs373.40 crore in the similar quarter of the previous financial year. This is in line with the trend that has been seen in the past year. Last quarter (Q3FY18) also saw a plunge in profit by 39 per cent to Rs305.8 crore.This is the eighth straight quarter drop for the New Delhi-based company.
The one redeeming feature for Bharti Airtel is a manifold increase in profits from its Africa operations where it reported a net profit of Rs698.7 crore for the quarter ended March 2018 against Rs26.3 crore a year ago.
The Sunil Mittal-led mobile carrier’s Africa revenue climbed 1.5 per cent to Rs4,971.3 crore in the three month period from Rs4,840.7 crore a year earlier helped by currency stabilisation across most countries.
The fourth quarter profit makes it the first full year for African operations showing profit for Airtel, a complete turnaround from previous years where the operations showed consistent and mounting losses.
Bharti Airtel posted a net income of Rs83 crore during the quarter ended 31 March 2018, compared with a Rs373 crore posted during the same period a year ago. The telecom service provider had posted a net profit of Rs306 crore in the sequential (third quarter), Airtel said in a statement.
Gopal Vittal, MD and CEO, India & South Asia for Airtel spoke of the causes, “The telecom industry continues to witness below cost, artificially suppressed pricing. Industry revenues were further adversely impacted this quarter due to the reduction in International termination rates.”
The company's consolidated total revenues fell 5.4 per cent on a year-on-year basis to Rs19,634 crore, while mobile data traffic grew to 1,616 billion MBs in the quarter. The company's overall customer base grew 12 per cent to 413.8 million across 16 countries, excluding divested units.
India revenues for the quarter fell 7.5 per cent to Rs 14,796 crore, primarily impacted by mobile business drop of 13.5 per cent. India other business have posted 10.7 per cent growth in Digital TV and 11.2 per cent in Airtel Business on an underlying basis.
Mobile data traffic has grown more than six times to 1,540 billion MBs in the quarter as compared to 225 billion MBs in the corresponding quarter last year. Mobile broadband customers increased by 79.3 per cent to 76.6 million from 42.7 million in the corresponding quarter last year.
In constant currency terms, Africa revenues grew by 10.7 per cent led by strong growth in data and Airtel money transaction value. Mobile data traffic has grown by 88 per cent to 70 billion MBs in the quarter as compared to 37 billion MBs in the corresponding quarter last year.
“The telecom industry continues to witness below cost, artificially suppressed pricing. Industry revenues were further adversely impacted this quarter due to the reduction in International termination rates. Airtel continued to consolidate its leadership position this quarter," Gopal Vittal, MD and CEO, India & South Asia, said.
"Our strategic investments in data capacities, innovative digital content through Airtel TV, customer friendly bundles and upgrade programs led to the highest ever mobile data customer additions of 15 million during the quarter. Usage parameters remained robust– on a YOY basis, we saw data and voice traffic grow 584 per cent and 55 per cent, respectively," he added.
The company ended the financial year with the highest-ever capital expenditure of Rs 24,000 crore.
For the full year ended 31 March 2018, Airtel net profit fell 71.1 per cent to Rs1,099 crore from the same period a year ago. The operator's consolidated total revenues fell 9.8 per cent to Rs83,688 crore, while consolidated EBITDA fell 14.5 to Rs30,448 crore.
The company’s consolidated net debt rose to Rs95,228 crore from Rs91,714 crore in the previous quarter. Net debt to EBITDA ratio (LTM) for the quarter was 3.23 times.
Airtel said lower EBITDA along with rising spectrum costs and continued investments in India have resulted in deterioration of return on capital employed (ROCE) to 4.7 per cent from 6.5 per cent in the previous year.
The company declared a final dividend of Rs2.5 per share (face value of Rs5 per share) for the financial year ended 31 March 2018. Together with the interim dividend of Rs2.84 per share, total dividend for the year comes to Rs5.34 per share, which is entirely a pass through of dividend from the subsidiaries.