Bharti sees seventh straight profit drop as financing costs and forex losses bite

4 Nov 2011

Indian telecoms giant Bharti Airtel reported a 38.2% year-on-year decline for the second fiscal quarter of its 2011-12 financial year, with the company’s seventh straight quarter-on-quarter profit drop attributed to higher interest costs and foreign exchange losses. For the three months ended 30 September 2011 Bharti posted a net income of INR10.27 billion (USD225 million), down from 16.61 billion in the same period a year earlier, with the company noting that due to the US dollar’s appreciation against both the rupee and several African currencies forex restatement losses for the period were INR2.39 billion. Consolidated turnover however rose by 13.4% year-on-year to INR172.69 billion, with Bharti noting that non-voice revenue contributed around 16.2% of the total, while earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter for were INR58.15 billion, up 13.2% against 2Q10.

In operational terms, at the end of September 2011 Bharti’s total mobile subscriber base stood at 227.04 million, up from 187.71 million a year earlier. Of the total, its domestic unit accounted for the lion’s share, with Indian mobile voice accesses totalling around 173 million, while its 16 African subsidiaries between them counted for just under 48.44 million, with the remainder attributed to the group’s South Asian units.

Commenting on the results, Sunil Bharti Mittal, the company’s chairman and managing director noted: ‘This year is progressing well for Bharti Airtel. India has achieved double digit growth fuelled by non-voice business. The arrest of continuously declining prices in India augurs well for the telecoms industry.’

India, Bharti Airtel