Bharti profits decline 37% in Q1; revenues up at Rs 19,350 cr

Bharti Airtel Ltd has reported a 37 per cent decline in its net profit for the first quarter ended June 30, 2012.

The company's shares were trading lower at Rs 284.30, down 3.23 per cent (or Rs 9.50) on the BSE in morning trade on Wednesday.

The company said margin was depressed due to the adverse regulatory and tax developments in India, enhanced market participation and planned accelerated investments in both India and Africa.

Consequently, the net profit was down to Rs 762 crore compared with Rs 1,215 crore in the corresponding quarter last year.

Revenues in the first quarter on a consolidated basis were at Rs 19,350 crore, up 14 per cent over the corresponding period last year. This was primarily due to a growth of 31.5 per cent in Africa and a 44.2 per cent increase in India mobile data revenues.

Subscriber base

Airtel now has 38 million mobile data subscribers. Overall customer base stands at 260.7 million across 20 countries. Total minutes on network at 274.6 billion were sequentially up by 3.5 per cent∙

The company said that the overall mobile revenues in India during the quarter were impacted by two significant changes:

TRAI guidelines around processing fees restricted the sales of “combo packs” which offered bundled service propositions to augment customer value.

Secondly, the service tax hike from 10.3 per cent to 12.36 per cent, effective April 1, 2012, causing all telecom services to become dearer by nearly 2 per cent, with the entire additional levy being passed through to the exchequer.

Africa revenues

Africa revenues grew 31.5 per cent, driven by strong operational performance in the last year and favourable currency movements.

However, economic and currency headwinds are evident in key markets, as a result of the Euro Zone crisis, lower aid and grants, rising inflation and political issues in some countries.

“With this in mind, the company intensified market operations, advertising, network rollouts, as well as new growth initiatives such as 3G, airtel money and Rwanda,’’ the company said.

In a statement, Sunil Bharti Mittal, Chairman & Managing Director, Bharti Airtel Ltd, said: “Despite these adverse developments, Airtel has kept its focus on network expansion, market investments, superior customer experience and new product innovations.’’