Bharti net jumps, but Africa remains a drag

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Bharti Airtel on Tuesday posted 89.10 per cent year-on-year (YoY) growth in March quarter consolidated profit at Rs 962 crore, which was in line with market expectations. The number compared with Rs 509 crore profit reported for the year-ago quarter.

However, the international business continued to be in the red, primarily because of the sluggish African business, which is yet to see a turnaround. Total losses on the overseas account stood at Rs 1,218 crore in the March quarter, up sharply from Rs 576.68 crore in the year-ago period.

Airtel’s consolidated net sales grew 13.46 per cent to Rs 22,219 crore from Rs 19,582 crore. Revenue from domestic business rose 11.60 per cent YoY to Rs 12,083.50 crore. The international business grew 17.20 per cent, helped by 16.40 per cent growth in South Africa and 30 per cent growth in South Asia, where it has operations also in Bangladesh and Sri Lanka.

For the financial year ended on March 31, the company’s consolidated profit rose 21.80 per cent YoY to Rs 2,773 crore on a 11.50 per cent rise in consolidated revenues at Rs 85,746 crore.

India’s largest telecom services operator had a customer base of 29.59 crore across 20 countries, up 9.10 per cent on year. On a sequential basis, the African business grew at a modest pace of 1.7 per cent against 3.5 per cent growth in the Indian business.

In operational metrics, the average revenue per user (Arpu) rose to Rs 196 from Rs 192 in India but fell to $4.4 from $4.7 in the 17 Africa markets.

Voice usage grew 10 per cent YoY at 136 minutes in the African markets but shrank 4 per cent on a sequential basis. In addition, realisation from the voice segment was down 18 per cent YoY to 3.23 cents, which was 2 per cent lower than in the September quarter.

“The March quarter performance was impacted by a seasonal downturn in parts of Africa and regulatory interventions in Nigeria,” Christian de Faria, CEO for Africa operations, said. Analysts said the African business continued to be sluggish and any near-term turnaround was unlikely.

“The overall consolidated results were in line with expectations. But the African business showed worse-than-expected weakness,” said Naval Seth, telecom analyst at Emkay Global Financial Services. Ankita Somani, telecom and IT analyst at Angel Broking, said: “The Indian performance remains more or less on the expected lines. The operational parameters too were positive, but the African business showed some weakness, which was made up by the South Asian business.”

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