Thanks for the article “Private Sector’s Bribe-giving” (Moneylife, 7 April 2011). Well said:...
Company’s African operations register losses. This is the fourth consecutive quarter of falling profits for the country’s biggest mobile phone operator
New Delhi: Bharti Airtel, the country's leading mobile phone operator, today announced bigger-than-expected drop in profit for the March quarter, down 31.48%, mainly due to losses at its African operations. The company said consolidated net profit fell to Rs1,400.7 crore for the fourth quarter in 2010-11 from Rs2,044.4 crore in the previous corresponding period.
Total revenue, however, was up by 51.32% at Rs16,265.4 crore in the period under review, compared to Rs10,749 crore in the year-ago period, reports PTI.
The Bharti Airtel shares recovered after falling by as much as 4.5% after the earnings announcement this morning. At 11 am, the stock was trading at Rs366, still about 1% down on the Bombay Stock Exchange, with the benchmark Sensex slightly higher.
It is the fourth consecutive quarter of falling profits for Bharti, since it started reporting results based on international accounting standards.
"Net income, at Rs6,047 crore, declined by 32.6% from Rs8,977 crore in the previous year due to increase in net interest outgo (Rs1,480 crore), forex re-statement losses (Rs683 crore), re-branding expenses (Rs340 crore) and increase in spectrum charges in India (Rs265 crore)," the company stated.
For the full year 2010-11, Bharti Airtel's net profit was down 32.64% at Rs6,046.7 crore, compared to Rs8,976.8 crore in the previous year. Total revenue for the 2010-11 was at Rs59,467 crore, as against Rs41,847 crore in the previous fiscal year, up 42.1%.
The company's prospects in India, the second-biggest and fastest-growing market in the world, improved during the year as call prices steadied after a price war that had led to sharp drops. Now, telecom companies, including Bharti Airtel, have begun rolling out third-generation (3G) networks hoping for a pickup in premium data services to boost revenues.
Bharti accounts for a quarter of India's mobile market of more than 800 million customers. It operates second-generation (2G) mobile services in all 22 telecoms zones in the country and has rights to offer 3G services in 13 of them.
However, Bharti said that average revenue per person (ARPU), a key gauge of profitability, dropped by 12% to Rs194 in the March quarter, compared to Rs198 in the December quarter.
The board has recommended a dividend of one rupee per equity share of Rs5 each for the 2010-11 fiscal.
Africa is a worry for Bharti. The company, which is 32.3% owned by Southeast Asia's biggest phone firm SingTel, acquired the loss-making mobile operations of Kuwait's Zain in 15 countries last June in a $9 billion deal, becoming the world's fifth-biggest mobile carrier by subscribers. It's African operations posted an overall net loss of Rs416 crore, while ARPU in Africa dropped 3% from the previous quarter to $7.20, the company said.
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