Feb 02, 2013 02:19 PM IST | Source:

Bharti Q3 profit falls 61% QoQ to Rs 284 cr; shares drop

India's largest cellular services operator Bharti Airtel's third quarter consolidated net profit fell higher-than-expected 61 percent quarter-on-quarter (72 percent year-on-year) to Rs 284 crore, due to foreign exchange losses and other costs.

Moneycontrol Bureau

Telecom services major Bharti Airtel’s third quarter net profit was eroded by high interest costs, forex losses and depreciation, but Chairman and Managing Director Sunil Mittal said there were some positives as well despite a bleak operating environment.

The company’s third quarter consolidated net profit was Rs 284 crore, down 72 percent year-on-year and down 61 percent quarter-on-quarter. Quarterly revenues rose around 10 percent year-on-year to Rs 20,239 crore, but were flat compared to the September quarter.

Forex loss (Rs 261 crore), depreciation and amortisation cost (Rs 316 crore), and net interest costs (Rs 284 crore), pressured the operating margin, which declined to 30.6 percent, compared to 31.3 percent in the September quarter and 32.2 percent the previous year.

“Market conditions have been challenging in recent quarters due to pricing pressures and rising input costs, which have put enormous pressure on the sector and consequently the margins,” Mittal said in the earnings press release.

“However, the worst seems to be getting over with corrections taking place in customer acquisition practices and the tariffs, which are driving quality of acquisitions and improving efficiencies. Moreover, on the data front, it is heartening to see strong growth quarter on quarter and across geographies,” he said.

The company’s average revenue per user (ARPU) in mobile services, a key measure of profitability, rose 4 percent (Rs 8) quarter-on-quarter to Rs 185, but declined 1 percent year-on-year. This, despite minutes of usage increasing 3 percent sequentially and 10 percent year-on-year. Mobile services account for 77 percent of the company’s revenues, even as it is trying to diversify its revenue stream and increase the share of data revenues (non-voice).

Voice average revenue per user (ARPU) grew 4 percent to Rs 153 quarter-on-quarter, but declined 3 percent year-on-year, which analysts see as a key concern.

The company’s base of mobile service customers in India fell 4 percent QoQ to 1.81 lakh, as the company deactivated many inactive users.

On the positive side, the company reduced the churn rate of its mobile customers in India to 5.9 percent in the December quarter from 8.5 percent in the preceding quarter.

The company said Africa revenues grew by 15 percent YoY, supported by customer base growth of 21 percent, voice traffic increase of 42 percent, and non voice revenue growth of 85 percent. Voice usage per customer has grown YoY by 15 percent from 125 minutes to 144 minutes, the company said.

Click on attachment for full earnings report

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