Bharti Airtel second-quarter profit plunges 77 per cent

Bharti Airtel second-quarter profit plunges 77 per cent

Airtel's second quarter net profit of 3.43 billion rupees ($53 million) was its smallest profit in 19 quarters and its sixth consecutive drop in quarterly profit.

According to analysts, interconnect charges now account for 12 per cent of Airtel's operating profit. "This will eventually force operator consolidation and exits as we have witnessed in the recent past", said Gopal Vittal, MD and CEO of Bharti Airtel.

The company net profit declined to Rs 586.1 crore from Rs 1,615.10 crore profit in the corresponding quarter past year.

"The consolidated revenues for Q2'18 at Rs 21,777 crore, Y-o-Y drop of 10.4% (reported drop of 11.7%) on an underlying basis (viz. adjusted for Africa / Bangladesh divested operating units and tower assets sale)", the company said.

"Mobile market continues to experience value erosion and financial stress led by competitive pressures", the company added.

Its India operations continued to suffer as revenues dropped 13% to Rs 16,728 crore on an year-on-year basis.

"Mobile data traffic has grown fourfold to 784 billion MBs in the quarter as compared to 178 billion MBs in the corresponding quarter a year ago".

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"Airtel remains committed to its goal of increasing revenue market share in this competitive environment by providing superior customer experience and strategically investing behind building more data capacities", Vittal added. It was lower than Rs 21,958 crore in the quarter ended June, but analysts said the limited sequential drop - after a sequential rise in the previous quarter - indicated slight easing of pressure in India as Jio raises tariffs gradually.

Bharti, which has about 383 million customers across 17 countries in Asia and Africa, said its total revenue fell 12% to 217.77 billion rupees as sales in the Indian market shrank.

Airtel's data usage per customer reached over 4 GB in the second quarter, up 308.7% on a yearly base, mainly driven by bundled plans and freebies.

India ARPU for voice and data combined fell 6.3% on quarter to its Rs 145, its lowest ever. Mobile data traffic for Airtel has grown four-fold to 784 billion MBs in the quarter compared to 178 billion MBs in the same quarter a year ago, the company said.

The shares of the company closed at Rs 497.65 a piece, up by 0.98 per cent, on BSE.

The margin of earnings before interest, tax, depreciation and amortisation expanded to 36.8% from 35.6% in the previous quarter, as the company controlled operational expenses.

The forex and derivative loss for the quarter widened to Rs 422 crore compared to loss of Rs 302 crore in the same quarter previous year.

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