Bharti sees positive trends amidst profit fall
13-08-2010
Tariff war has subsided, data revenue is increasing fast
Bharti Airtel reported a 32% fall in net profit to Rs.1,682 crore for the quarter ended 30 June over the same quarter last year, but the financials of India's largest telco reflected many positive trends.
In fact, the Rs.216 crore decline in net profit is because of an increase of Rs.104 crore in spectrum usage charges and a Rs.421 crore loss arising from foreign exchange fluctuations and derivatives. The company had gained Rs.279 crore from similar fluctuations in the year ago, said Sanjay Kapoor, CEO India and South Asia
The telco's consolidated revenue (including Airtel Africa for 23 days) for the quarter was Rs.12,231 crore, a growth of 17.4% from the year earlier. Revenue from South Asia, including India, was Rs.11,273 crore, up 8.2%.
Operating profit ratio, a key gauge of profitability, was 36.9% in April-June, compared with 41.3% a year ago.
Bharti's net debt to equity ratio stood at 1.38:1, a relatively low number for a telco, and an indication of the firm's financial health as well as its ability to cover its debt; its net debt to operating profit ratio stood at 2.87:1.
Capital expenditure in the quarter was Rs.1,836 crore, largely because of delays in security clearances for equipment imports. It had earlier indicated its capital expenditure for the year would be $3.2 billion, including $800 million for Airtel Africa.
A tariff war all through 2009-10 eroded the profitability of telcos, but Kapoor said the effects of that were "receding". "But bleeding could continue, as when the time comes for consolidation, the new operators could get desperate and highly disruptive" said the analyst cited above. "They could hold the incumbent operators to ransom. For now, there is some amount of sanity in the market"
Bharti saw its minutes of usage rise to 480 from 468 in the previous quarter. However, Bharti's average revenue per user (Arpu) and average revenue per minute fell 23% to Rs.215 and Rs.0.45 from the previous year's Rs.278 and Rs.0.58, respectively.
The telco also saw its market share fall from 24% in the same quarter last year to 21.5%, while that of additions dropped from 23.8% to 17.6%.
The firm has also seen a rise in data usage and is pegging future growth on its telemedia arm that includes broadband and DTH (direct-to-home) TV services. "Non-voice revenue has risen 25% over a year" Kapoor said. "Telemedia Arpu has also risen to Rs.961 from Rs.937 in the previous quarter. This shows that data is coming of age in our country"
From LiveMint
Bharti Airtel reported a 32% fall in net profit to Rs.1,682 crore for the quarter ended 30 June over the same quarter last year, but the financials of India's largest telco reflected many positive trends.
In fact, the Rs.216 crore decline in net profit is because of an increase of Rs.104 crore in spectrum usage charges and a Rs.421 crore loss arising from foreign exchange fluctuations and derivatives. The company had gained Rs.279 crore from similar fluctuations in the year ago, said Sanjay Kapoor, CEO India and South Asia
The telco's consolidated revenue (including Airtel Africa for 23 days) for the quarter was Rs.12,231 crore, a growth of 17.4% from the year earlier. Revenue from South Asia, including India, was Rs.11,273 crore, up 8.2%.
Operating profit ratio, a key gauge of profitability, was 36.9% in April-June, compared with 41.3% a year ago.
Bharti's net debt to equity ratio stood at 1.38:1, a relatively low number for a telco, and an indication of the firm's financial health as well as its ability to cover its debt; its net debt to operating profit ratio stood at 2.87:1.
Capital expenditure in the quarter was Rs.1,836 crore, largely because of delays in security clearances for equipment imports. It had earlier indicated its capital expenditure for the year would be $3.2 billion, including $800 million for Airtel Africa.
A tariff war all through 2009-10 eroded the profitability of telcos, but Kapoor said the effects of that were "receding". "But bleeding could continue, as when the time comes for consolidation, the new operators could get desperate and highly disruptive" said the analyst cited above. "They could hold the incumbent operators to ransom. For now, there is some amount of sanity in the market"
Bharti saw its minutes of usage rise to 480 from 468 in the previous quarter. However, Bharti's average revenue per user (Arpu) and average revenue per minute fell 23% to Rs.215 and Rs.0.45 from the previous year's Rs.278 and Rs.0.58, respectively.
The telco also saw its market share fall from 24% in the same quarter last year to 21.5%, while that of additions dropped from 23.8% to 17.6%.
The firm has also seen a rise in data usage and is pegging future growth on its telemedia arm that includes broadband and DTH (direct-to-home) TV services. "Non-voice revenue has risen 25% over a year" Kapoor said. "Telemedia Arpu has also risen to Rs.961 from Rs.937 in the previous quarter. This shows that data is coming of age in our country"
From LiveMint
