Bharti Airtel Q2 net slips 5% on higher costs

Telecom major Bharti Airtel on Tuesday posted 4.9% drop in its consolidated net profit at Rs 1,461 crore in the September quarter, mainly on account of increased spectrum related costs and devaluation of Nigerian currency.

The company had reported a net profit of Rs 1,536 crore in the year-ago period.

"Net interest costs of Rs 1,603 crore have risen from Rs 1,053 crore in the corresponding quarter last year - largely due to increased spectrum related interest costs," Airtel said in a statement.

Also, growth of Bharti Airtel's mobile business in India slowed down due to launch of free mobile service by Reliance Jio.
 

Overall revenue momentum in India has been sustained during Q2 with a growth of 10.1% Y-o-Y.

"This is primarily due to the strong performance of our non-mobile businesses which grew in aggregate at 18.8% Y-o-Y, albeit our mobile business has experienced a slowdown in growth due to free services being offered by a new operator," Gopal Vittal, firm's MD and CEO (India and South Asia), said.

India revenues during the quarter ended September 30 grew by 10.1% to Rs 19,219 crore on year-on-year basis.

The company said its India business grew on account of 20.9% growth in digital TV, 19.2% in Airtel Business, 14.9% in homes and 7.9% in mobile, on year-on-year basis.

Total income increased by 3.4% to Rs 24,671.5 crore against Rs 23,851.9 crore earlier.

Airtel said consolidated revenue growth was muted at 3.3% on account of full quarter impact of Nigeria currency devaluation.

During the quarter, except for Nigeria, currencies were stable in most of the geographies, which resulted in lower forex and derivative losses of Rs 302 crore compared to Rs 822 crore in the corresponding quarter last year, the company said.

Consolidated mobile data revenues grew by 21% y-o-y to Rs 4,536 crore.

"Mobile Data revenues now contribute to 24.7% of Mobile India revenues vis-a-vis 21.5% in the corresponding quarter last year," Airtel said.

In constant currency terms, Africa underlying revenues grew by 4.7%.

"Underlying Africa revenue growth for the quarter was 4.7% Y-o-Y, backed by our focus on profitable top line growth, led via localised distribution, stronger data networks and our war on waste program," the company's Chief Operating Officer (Africa) Raghunath Mandava said.

In a separate statement, Airtel said it will explore sale of stake in its mobile tower arm Bharti Infratel.

"The Board of Directors of the company has authorised committee of directors to evaluate option for monetisation of significant stake in Infratel," Airtel said.

Airtel currently holds around 72% stake in Bharti Infratel.

Over the last two quarters, Bharti Airtel has divested telecom operations in two African countries (Burkina Faso and Sierra Leone).