India’s largest telecom company Bharti Airtel continued the saga of quarterly losses. The company reported about 50 per cent slump in its consolidated earnings in its 13th consecutive quarterly loss on Thursday.
During January-March, its net profit in the fourth quarter of 2012-13 fiscal dropped to Rs508.6 crore, from Rs1,005.9 crore a year ago on higher tax outgo and depreciation cost. However, the company looked positive about its future.
“I am pleased to see that market corrections have started with improvements in the quality of customer acquisitions and that pricing stability is returning to the sector in India,” Bharti’s Chairman and Managing Director Sunil Mittal said.
For the 2012-13 fiscal, Bharti made Rs2,275.7 crore profit, its smallest in seven years. The net profit was 46.6 per cent lower than Rs4,259.4 crore in 2011-12.
Revenues in Q4, however, rose 9.2 per cent to Rs20,448.4 crore from Rs18,729.4 crore in the year-ago period. For the full fiscal, they were up 12.4 per cent to Rs80,311.2 crore.
“Overall, the last year or so, the data ecosystem in the country is growing really well, our 3G expansion is on track... The really good news is that pricing stability seems to be returning in market place,” Bharti Airtel India Joint Managing Director and CEO Gopal Vittal said.
Data has grown around 22 per cent year on year and the customer base stands at 43.49 million. Vittal, who took over the reins from Sanjay Kapoor said roughly 12.3 billion minutes have been added during this quarter and data continues to grow strongly.
The net debt of the company stood at Rs63,839.5 crore as on March 31, 2013.
Asked about the steps to check the declining profits, Vittal said: “The real challenge is to grow revenues because unless we grow revenues, our margins won’t improve. We are actually determined to do that.”
He added that the company needs to improve the quality of its acquisitions, improve the realisation rate of voice and reduce discounts.
Airtel is planning to invest $2.2-2.3 billion in FY14, which include an investment of about $600 million in Africa.
On being asked about the entry of Reliance Industries in telecom space, Vittal said: “For us, what really matters at the end of the day is that we are a product of competition, over the last 17-18 years if you look at Bharti Airtel, we have survived in an industry which is brutally competitive.”
Its African operations loss also widened to Rs485.7 crore in the reported quarter. The company had reported net loss of Rs340.6 crore in the corresponding quarter last year. The total income of the company for Africa, however, rose 12.57 per cent to Rs6,064.7 crore for the quarter as compared to Rs5,387.4 crore in the same period last year.
The company also said that it will acquire 30 per cent stake in Bangladesh’s Warid Telecom to make it a wholly- owned subsidiary of the firm. In January 2010, Bharti had acquired a 70 per cent stake in the Bangladesh arm of Warid Telecom, a wholly-owned subsidiary of the Dhabi Group.
Post disappointing Q4 result, shares of Bharti Airtel ended nearly 1 per cent lower. After falling over 4 per cent in intra-day trade, shares of Bharti finally ended at Rs316.70, down 0.64 per cent on the BSE.
At NSE, the stock settled 0.66 per cent lower at Rs316.65.
“Bharti Airtel’s Q4 FY13 revenue as well as bottom-line came in below expectations,” said Ankita Somani, Research Analyst IT & Telecom, Angel Broking.