Companies

Bharti Airtel’s Q2 net profit down by 38.17 p.c.

A view of Bharti Airtel logo. Bharti Airtel on Friday posted a 38.17 per cent fall in second quarter consolidated net profit due to higher interest outgo and costs related to the roll-out of its 3G network. File photo

A view of Bharti Airtel logo. Bharti Airtel on Friday posted a 38.17 per cent fall in second quarter consolidated net profit due to higher interest outgo and costs related to the roll-out of its 3G network. File photo  

Country’s largest telecom firm Bharti Airtel's on Friday announced a fall in net profit by 38.17 per cent to Rs. 1,027 crore during July-September quarter. This is the seventh consecutive quarter in which the company has registered a decline in profit.

In the corresponding quarter ended September 30 last year, the company had registered a consolidated net profit of Rs. 1,661 crore. "Markets globally and locally have been challenging. Traditionally, July-September quarter is a quarter of being subdued customer demand for the sector,’’ Bharti Airtel CFO, Manik Jhangiani said here.

During the quarter, the US dollar appreciated against the rupee, resulting in forex re-statement losses of Rs. 239 crore for the company, as against a gain of Rs. 249 crore in Q2 last fiscal. Bharti Airtel's total sales were up by 13.38 per cent at Rs. 17,270 crore in Q2, 2011-12, as against Rs. 15,231 crore in 2010-11. For the India and South Asia region, the company has earmarked a capex of about $2 billion for the current fiscal, out of which the company has already spent around $1 billion, Mr. Jhangiani added.

The company's overall customer base stood at 237 million across 19 countries at the end of the reporting quarter. Monthly average revenue per user (ARPU), a key metric for telecom carriers, from Bharti's Indian operations fell to Rs. 183 during the reporting quarter from Rs. 190 in the June quarter.

Bharti Airtel said the roll-out of its 3G network resulted in a higher amortisation cost of Rs. 164 crore for the quarter, while its net interest cost rose to Rs. 115 crore during the reporting period. On a quarter-on-quarter basis, Bharti Airtel's net profit for the second quarter was down 15.49 per cent from Rs. 1,215.2 crore in the previous April-June quarter this year.

"This year is progressing well for the company. India has achieved double-digit growth, fuelled by non-voice businesses. The arrest of continuously declining prices in India augurs well for the telecom industry,’’ Bharti Airtel chairman and managing director, Sunil Mittal said in a statement. "We look forward to constructive deliberation on the draft National Telecom Policy, 2011, and Trai recommendations for promoting the government's broadband vision and viability of the sector,’’ he added.

On the company's African business, Mr. Mittal said Africa has notched up strong revenue growth of 23 per cent. The company has launched 3G services in Congo B and Airtel Money in Zambia and Kenya. "We continue to expand our footprint across Africa, with our recent acquisition of 2G and 3G licence in Rwanda,’’ he added.

Last year, Bharti had acquired Zain Telecom's Africa operations for $10.7 billion to become the world's fifth-largest mobile operator. This was the first full quarter of comparable consolidated results following the Africa acquisition. The recent tariff increase in India has begun to take effect, offsetting some of the inflationary and other cost increases impacting the entire industry. During the quarter, Bharti Airtel successfully introduced a new organisation structure for its operations in India and South Asia.

The new structure has two distinct Customer Business Units (CBU) with a clear focus on the B2C (Business-to-Customer) and B2B (Business-to-Business) segments. The B2C vertical is divided into Consumer Business and Market Operations. The B2B business unit continues to focus on serving large corporates and carriers through Bharti Airtel's wide portfolio of telecommunication solutions.

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Printable version | May 26, 2020 6:48:21 PM | https://www.thehindu.com/business/companies/bharti-airtels-q2-net-profit-down-by-3817-pc/article2597333.ece

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