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    Bharti Airtel posts lowest quarterly profit in 15 years; key takeaways

    Synopsis

    Consolidated profit of Airtel plunged 78% YoY to Rs 83 crore during the March quarter.

    ETMarkets.com
    NEW DELHI: Telecom giant Bharti Airtel on Tuesday reported its lowest quarterly profit in nearly 15 years, as tariff war and fall in international terminal charges dented bottomline of the company.

    The earnings, which were announced post market hours, were still better than brokerages’ expectations.

    Here are the top takeaways from Airtel's fourth quarter earnings:


    Profit down, but still surprising
    Consolidated net income of Bharti Airtel plunged 78 per cent year-on-year to Rs 83 crore during the quarter under review against Rs 373 crore in the same period last year. Total revenues and EBITDA also slipped by 10.50 per cent year-on-year and 12 per cent year-on-year, respectively. Bottomline came ahead of analysts’ estimates.

    Gopal Vittal, MD and CEO, India & South Asia, in a release said: “The telecom industry continues to witness below cost, artificially suppressed pricing. Industry revenues were further adversely impacted this quarter due to the reduction in International termination rates. Airtel continued to consolidate its leadership position this quarter.”

    Telecom regulator Trai had cut international termination charges paid by global long-distance operators to local carriers to Rs 0.30 from Rs 0.53 paise with effective from February.

    27% fall in ARPU
    Revenue from mobile services slipped by 20.2 per cent to Rs 10,353.2 crore compared with Rs 12,971.8 crore in the corresponding quarter last year due to continued ARPU (average revenue per user) contraction. Overall ARPU for the quarter stood at Rs 116 against Rs 158 last year.

    Mobile ringing louder
    Mobile data traffic has grown more than six times to 1,540 billion MBs in the quarter against 225 billion MBs last year. Mobile broadband customers increased by 79.3 per cent to 76.6 million from 42.7 million in the corresponding quarter a year ago.

    Updates on Africa
    In a release Raghunath Mandava, MD and CEO, Africa, said: “Airtel Africa’s revenues grew by 10.7 per cent on a YoY basis. Data traffic grew 88 per cent, voice minutes increased by 37 per cent and Airtel Money throughput grew by 45 per cent on a YoY basis. EBITDA margin expanded by 10.3 per cent resulting in an EBITDA margin of 35.9%. The acquisition of TIGO in Rwanda was completed during the quarter.”

    What’s in it for shareholders
    The board of the telecom major also recommended a final dividend of Rs 2.50 per equity share for the financial year 2017-18. Earnings per share slipped 78 per cent year-on-year to Rs 0.21.


    Standalone report card
    Bharti Airtel reported a net loss of Rs 760.20 crore in Q4FY18 on a standalone basis against net loss of Rs 14176.20 crore in the same quarter last year. However, the company had posted a standalone net profit of Rs 64.30 crore in the sequential quarter ended December 2017.

    RoCE took a hit
    Lower EBITDA along with rising spectrum costs and continued investments in India have resulted in deterioration of return on capital employed (RoCE) to 4.7 per cent from 6.5 per cent in the previous year. RoCE is used to measures how efficiently a company can generate profits from its capital employed.





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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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