Bharti Airtel net up 29%, closes gap with Reliance Jio in wireless segment

Bharti Airtel posted a 29 per cent jump in net profit to Rs 107 crore for the quarter ended March 2019 even as the Street had anticipated a loss in the range of Rs 700 crore. The company said the jump was mainly due to gains from exceptional items.

The high point in the third-largest telecom company’s results was its domestic wireless numbers. The business grew 4.1 per cent sequentially at Rs 10,632 crore — showing Airtel has narrowed the gap with Reliance Jio in this segment. Jio had posted standalone revenue from operations at Rs 11,106 crore in the quarter ended March 2019, up 7 per cent QoQ.

Airtel, however, lost its second position to Jio in the quarter, as the latter’s subscriber base expanded. Vodafone Idea continued to be the country’s largest telco.

The company reported revenues of Rs 20,602.2 crore, up 6.2 per cent from the same quarter last financial year. The earnings before interest, taxation, depreciation and amortisation were better as Airtel eliminated its low-value customers during the quarter.

The exceptional items during the quarter ended March 2019 comprise a charge of Rs 145.5 crore towards operating costs on network refarming and upgrade programme and a credit of Rs 2,167.6 crore pertaining to reassessment of levies, based on a recent pronouncement related to the manner of determination of such levies.

For FY19, Airtel’s net profit tanked 62.7 per cent to Rs 409.5 crore compared to Rs 1,099 crore in the previous financial year. During the period, the revenue of the company stood at Rs 80,780.2 crore, down 2.2 per cent, compared to Rs 82,638.8 crore.

“Net tax charge on the above is Rs 722.5 crore and has been included in the tax expense. The net impact for non-controlling interests on the exceptional items is credit of Rs 4.1 crore,” Airtel said in a regulatory filing to the stock exchanges.

The company’s borrowings during the quarter remained flat at Rs 87,245.4 crore as compared with Rs 84,942 crore in the corresponding quarter of the last financial year (2017-18).

As far as the revenue from the tower infrastructure services is concerned it remained flat at Rs 1,670.4 crore due to drop in rentals and consolidation in the telecom tower space.

On a standalone basis, it reported a loss of Rs 36.6 crore against a profit of Rs 227.1 crore in the December quarter. The mobile services revenue re­m­a­ined unchanged at Rs 10,230.6 crore.

During the quarter ended March 2019, Airtel Networks Kenya signed an agreement with Telkom Kenya to merge its operations. Since the agreement is subject to requisite regulatory approvals and customary closing conditions, no accounting has been done during the quarter, it said. Airtel shares ended at Rs 333.40 apiece on the BSE, up 0.69 per cent over the previous closing. The results were announced after market hours.

The company is in the midst of Rs 25,000-crore rights issue, which is slated to close on May 17. “The right issue will close on May 17,” Airtel said.