Bharti Airtel net up 170%, highest since March 2011

Bharti Airtel, the country’s largest mobile operator, reported a 170.2 per cent jump in net income during the July-September quarter to Rs 1,383 crore. The company’s highest quarterly profit since March 2011 was backed by a 74 per cent increase in data revenue in India as data volume doubled. Its net profit stood at Rs 512 crore in the corresponding quarter last year.

Bharti Airtel’s performance beat average analyst estimates of net profit at around Rs 1,300 crore during July-September. In April-June, the company reported net income of Rs 1,108 crore.

Consolidated revenue for the quarter grew 7.1 per cent to Rs 22,845 crore from Rs 21,324 crore in the same quarter in the prior year. Consolidated mobile data revenue, which accounts for more than two-thirds of the company’s incremental revenue, jumped 66.7 per cent in July-September to Rs 2,540 crore. In April-June it grew 73.9 per cent to Rs 2,204 crore.

Bharti Airtel’s revenue from Indian and South Asian operations, which includes Bangladesh and Sri Lanka, rose 12 per cent to Rs 16,182 crore in July-September. Of this, the Indian operations contributed Rs 15,815 crore, a 12.3 per cent rise. In India, mobile revenue grew by 11.3 per cent, telemedia by 14.4 per cent and digital TV by 23.5 per cent during the quarter.

Africa continues to be a pressure point for Bharti Airtel. Revenue from Africa operations dipped two per cent in July-September quarter to Rs 6,895 crore, from Rs 7,025 crore in the corresponding quarter previous year. While capex went up 66 per cent during the quarter, Earnings before interest, taxes, depreciation, and amortization (Ebitda) margins came down to 23.6 per cent in the quarter from 26.9 per cent in the corresponding quarter last year, a fall of 330 basis points. Operating free cash flow declined by 97 per cent during the quarter under review. However, total revenue from Africa grew by two per cent in US dollar terms during the quarter.

Operations in Bangladesh and Sri Lanka also underperformed during July-September quarter, with customer base declining by 11 per cent and total minutes of usage dipping by seventeen per cent. Net addition of subscribers in entire south Asia (which includes India, Bangladesh and Sri Lanka) dropped by huge 3123 per cent mainly because of poor performance in Bangladesh.

Average revenue per user (Arpu) in Indian mobile services dipped by two per cent to Rs 198 during the quarter ended September 2014, from Rs 202 at the end of June. Voice Arpu declined by five per cent to Rs 158 from Rs 166. Average realisation per minute from voice services in India also dipped 1 per cent to 37.69 paise from 38.08 paise in the previous quarter voice usage per customer dropped four per cent to 418 minutes.

The contribution of non-voice revenue to mobile services in India increased to 20.2 per cent in the quarter from 18.2 per cent in the previous quarter as data revenue increased by two percentage points to 14.5 per cent. Data Arpu grew eight per cent in July-September to Rs 150 backed by a 14 per cent rise in data usage per customer as the company’s 3G subscriber base rose by 23 per cent since June 30. But realisation fell by five per cent to 26.67 paise per minute.

Voice Arpu in Africa dipped 6 per cent to $4.1 and realisation from voice also declined by 7 per cent to $0.03 during July-September. Like India, non-voice revenue contribution also increased to 23.8 per cent from 21.5 per cent at the end of June quarter. While data usage per customer increased by 10 per cent during the quarter, realisation from data dipped by nine per cent and data Apru remained flat.

Consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) at Rs 7,705 crore grew by 12.1 per cent year on year, with the margin expanding 1.5 per cent to 33.7 per cent. The consolidated EBIT grew 31.3 per cent year on year to Rs 3,852 crore.

At the end of the September quarter, Bharti Airtel’s net debt increased to Rs 62,215 crore (about $10.09 billion) as the company added Rs 6,445 crore of deferred payment liabilities for the 2G spectrum that it acquired in the February auction. Its net debt stood at Rs 57,744 crore at the end of June, reduced from Rs 60,541 crore in end-March. As a result, its net debt to EBITDA ratio has moved marginally to 2.06 from 2.04 in the previous quarter.

“Airtel's pioneering 4G roll-out in 15 cities is now witnessing stronger customer acceptance. On the regulatory front, the recent TRAI recommendations on making more contiguous spectrum available in the upcoming auctions have the potential of transforming the industry. We believe that this is critical to realise the exciting vision of ‘Digital India’ that the government has articulated,” said Gopal Vittal, MD and CEO, India and South Asia, Bharti Airtel.

While Africa is still underperforming, Christian de Faria, MD and CEO, Africa, Bharti Airtel said impact was in line with the company’s expectations. “We are optimistic about the potential in Africa, despite these aberrations,” he added.

Bharti Airtel shares last traded 0.58 per cent up at Rs 407.50 a piece on BSE on Thursday.