India’s Bharti Airtel has released its first financial results since the acquisition of most of Kuwait-based Zain’s African units, posting a 32% drop in quarterly consolidated net profit. For the three months ended 30 June 2010 Bharti posted net profits of INR16.82 billion (USD363.2 million), down from INR24.75 billion in the same period a year earlier, with the decline attributed to higher interest costs, foreign exchange losses and continued hyper-competition in the Indian wireless sector. Costs relating to the purchase of the 15 Zain subsidiaries also dented the bottom line, accounting for a further outlay of INR982 million in the quarter. Despite profit tumbling, Bharti posted a 17% year-on-year increase in consolidated revenues, with the company generating turnover of INR122.31 billion in the three-month period, driven by continued subscriber additions. Earnings before interest, tax, depreciation and amortisation (EBITDA) excluding costs related to its African acquisitions meanwhile were up 5% y-o-y at INR45.12 billion.
In its home country, Bharti reported a total wireless subscriber base of 136.6 million, up 33% compared with the 102.4 million it had a year earlier. Average revenue per user (ARPU) has, however, continued to decline, standing at INR215 in 1Q 2010, down from INR220 three months earlier, and INR278 in 1Q09. Bharti noted though that its average minutes of use per subscriber had increased to 480 in the first three months of its 2010/11 fiscal year, up from 468 in the previous quarter and the first reported increase in 18 months.
Having completed the acquisition of its new African units in June 2010, Bharti reported that its total African subscriber base at end-June 2010 stood at 36.36 million. Further, it also revealed that its board had approved the acquisition of a 100% stake in Telecom Seychelles from its own parent Bharti Enterprises, for an enterprise value of USD62 million; the company had already been operating under the Airtel brand through a well-established partnership with the Indian group.