Bharti Airtel profit slips due to rebranding costs and increased spectrum charges

5 May 2011

India’s largest mobile network operator in terms of subscribers, Bharti Airtel has reported a hefty drop in net profit in its 2010-11 fiscal year, as a result of foreign exchange restatement losses, rebranding expenses and increased spectrum charges at its domestic unit. For the twelve months ended 31 March 2011 Bharti posted net profits of INR60.5 billion (USD1.354 billion), down 32.6% year-on-year, while net profit in the final three months of the fiscal year stood at INR14 billion, representing a decline of 31% against the same period a year earlier. Earnings before interest, tax, depreciation and amortisation (EBITDA) meanwhile were INR199.7 billion in FY2010-11, up 19% against the previous year, while fourth-quarter EBITDA was reported at INR54.5 billion, a 33% increase compared to 4Q09-10. Bharti’s consolidated revenues for the last three months of the fiscal year were INR594.7 billion, up 42% y-o-y, in part as a result of the company’s acquisition of the African assets of Zain in mid-2010. In the three months to end-March 2011 meanwhile the company generated turnover of INR162.7 billion, up 51% against the corresponding period a year earlier.

At end-March 2011 Bharti’s consolidated subscriber base stood at 220.9 million, of which 211.9 million had signed up for mobile services at one of the company’s 19 subsidiaries. India remains the group’s largest unit in terms of customers, boasting 162.2 million mobile subscribers at the end of March 2011, up 27% against the 127.6 million it reported a year earlier. Bharti’s African operations meanwhile accounted for a total of 44.2 million wireless subscribers, having added 2.1 million net new customers in the last three months of the fiscal year.

Commenting on the results Bharti Airtel chairman Sunil Bharti Mittal noted: ‘Bharti Airtel exhibited strong performance this year. The new airtel brand has been a tremendous success in all our 19 countries. In India, we have been focusing on building a robust 3G network to meet the increasing data needs of a young population. In Africa, we are rapidly expanding our network coverage, improving distribution width and increasing our efficiency and productivity standards.’

India, Bharti Airtel