Bharti Airtel Q3 income drops 39%

Bharti Airtel net income for the quarter dropped 39% to reach Rs. 306 crore vis-a-vis Rs. 504 crore in the corresponding quarter last year.

The consolidated revenues for Q3’18 at Rs. 20,319 crore de-grew 8.4% Y-o-Y (reported drop of 12.9%) on an underlying basis (viz. adjusted for India domestic termination rate reduction and Africa/Bangladesh divested operating units).

Consolidated mobile data traffic at 1,178 Mn MBs in the quarter has registered a robust Y-o-Y growth of 460.4% on an underlying basis.

India revenues for Q3’18 at Rs. 15,294 crore have declined by 11.3% Y-o-Y (15.1% on reported) on an underlying basis, adjusted for the impact in reduction of domestic termination rates. Y-o-Y de-growth primarily impacted by mobile drop of 17.6%. India other business have witnessed healthy growth e.g. 10.4% in Digital TV and 7.2% in Airtel Business on Y-o-Y basis.

Mobile data traffic has grown more than 6x to 1,106 Bn MBs in the quarter as compared to 172 Bn MBs in the corresponding quarter last year. Mobile broadband customers increased by 64.9% to 62.1 Mn from 37.7 Mn in the corresponding quarter last year.

In constant currency terms, Africa revenues grew by 5.3% Y-o-Y led by strong growth in data and Airtel money transaction value. Mobile data traffic has grown by 95.3% to 66 Bn MBs in the quarter as compared to 34 Bn MBs in the corresponding quarter last year. Data customers increased by 39.4% to 23.3 Mn from 16.7 Mn in the corresponding quarter last year. Active Airtel Money customer base increased to 10.4 million, boosting the total transaction value on Airtel Money platform by 37.9% to $5.4 billion.

Consolidated EBITDA at Rs. 7,587 crore declined 11.5% Y-o-Y. Consolidated EBITDA margin increased by 0.6% to 37.3% in the quarter as compared to 36.7% in the corresponding quarter last year. Consolidated EBIT dropped by 26.5% Y-o-Y to Rs 2,701 crore. Net interest costs of Rs 2,081 crore have risen from Rs 1,810 crore in the corresponding quarter last year largely due to lower investment income.

The company’s consolidated net debt has increased to Rs. 91,714 crore from Rs. 91,480 crore in the previous quarter. Net debt excluding the deferred payment liabilities to the DoT and finance lease obligations has decreased by Rs. 724 crore sequentially in the quarter. Net debt to EBITDA ratio (LTM) for the quarter at 3.01 times (vs 2.91 times in the previous quarter).

The company’s board has declared an interim dividend of Rs. 2.84 per share, which is a complete pass through of dividend received from subsidiaries.

Gopal Vittal, MD and CEO, India & South Asia said, “Regulatory fiat in the form of a cut in domestic IUC rates has exacerbated the industry ARPU decline in Q3’18. The recent announcement of reduction in International termination rates will further accentuate this decline and benefit foreign operators with no commensurate benefit to customers. Continued investments in data capacities, strategic partnerships with content and handset providers and focus on customer friendly innovations like data rollover has led to healthy customer additions of 8.1 Mn during the quarter.”

Q3’18 has also seen the highest ever broadband site deployment of 32K in any quarter, complementing the robust data and voice traffic growth of 544% and 50% respectively on a Y-o-Y basis added Vittal.

Raghunath Mandava, MD and CEO, Africa said, “Airtel has witnessed a revenue growth of 5.3% Y-o-Y with a higher net revenue growth of 8.8% Y-o-Y. During the quarter our sustained focus on Data and Airtel Money led to 95.3% increase in data traffic and 37.9% increase in Money transactions. EBITDA margins expanded 10.8% Y-o-Y and were at 35.5% for the quarter. Our plans continue to focus on investments in mobile broadband to deliver superior customer experience and we remain well positioned to capture the large untapped opportunities available across the continent.”