Bharti profit shrinks by 72%

4 Feb 2013

Bharti Airtel has reported a fall in net profits for the three months ended 31 December 2012, as increases in tax and financing costs outweighed the group’s revenue growth. The group booked revenues of INR202.4 billion (USD3.8 billion) for its fiscal Q3, an increase of 10% year-on-year. Earnings before interest, tax, depreciation and amortisation (EBITDA) were INR61.8 billion, with an EBITDA margin of 30.6% compared to INR59.6 billion and 32.2% twelve months earlier. Tax expenses increased by 20% to INR6.7 billion, which the company attributed to a Dividend Distribution Tax payment on a dividend received from Indus Towers Ltd and accounted for an additional expense of INR657 million. Financing costs meanwhile rose to INR13.3 billion from INR7.8 billion in the year-ago period, resulting in a 72% y-o-y fall in net profits to INR2.8 billion.

Bharti registered net losses of some 3.7 million subscribers in its India and South Asia region as more stringent verification rules have cut down the number of new subscribers in India. Higher-value mobile data and 3G subscribers continued to increase, however, with the company claiming 5.2 million 3G users at end-December 2012 of a total of 41.5 million data customers. In Africa, subscriber growth remained steady with net additions of three million new users boosting the total African customer base to 61.7 million. An influx of low-value users, increasing pricing pressures and weak local currencies have seen ARPU drop to USD5.3 per month, compared to USD6.5 a year earlier, despite growth in traffic to 26.2 million minutes from 18.5 million.

India, Bharti Airtel