Bharti Airtel posted a 28 per cent fall in consolidated net profit at Rs.1,215.20 crore for the first quarter ended June 30, 2011, mainly due to higher interest outgo and 3G costs.
The company, which completed one year of operations in Africa and announced its quarterly results in Nairobi, had a net profit of Rs.1,681.60 crore in the same period last fiscal, Bharti said in a statement here. The company had an interest outgo of Rs.344 crore on the African acquisition and on 3G investment in India and 3G licence fee amortisation of Rs.159 crore during April-June. Total sales were up by over 38 per cent at Rs.16,982.80 crore against Rs.12,285.60 crore.
“Bharti Airtel has started this fiscal year on a stable note. Revenue growth has been steady across all geographies, with Africa recording a healthy sequential growth of about 6 per cent and annual growth of 21 per cent,” Bharti Airtel CMD Sunil Mittal said in the statement.
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He said in India, the company's efforts in the area of cost efficiencies had helped check the decline. Income before taxes dropped to Rs.1,719 crore from Rs.2,072 crore, mainly on account of higher interest outgo.
During the quarter, the company made a capital expenditure of Rs.4,348.30 crore against Rs.1,836.10 crore in the year-ago period.
The company said it expected its operating profit in Africa to improve in the coming quarters. “We expect steady improvement in operating profit from Africa in coming quarters,” Bharti Airtel CEO (International) Manoj Kohli said on a conference call.
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During the quarter, Bharti Airtel incurred a capital expenditure of $420 million on its African operations. Last year, it acquired Zain's African operations in 16 countries for $10.7 billion to become the world's fifth largest mobile operator. Though Bharti Airtel is yet to turn profitable in Africa with high costs keeping margins under pressure, company officials are upbeat on the business in the continent.
About 213 people left Bharti Airtel's Aifrica operations during the quarter, taking its headcount in the region to 5,474 people. The company offers mobile services using GSM technology in South Asia across India, Sri Lanka and Bangladesh, serving over 167 million customers in these geographies.