Bharti Airtel on Tuesday posted a 78 per cent drop in its net profit to Rs 83 crore for the quarter ended March. The consolidated revenue of the telecom major fell 5.4 per cent to Rs Rs 19,634 crore in Q4. It had posted consolidated revenue of Rs 21,934.60 crore in the same quarter last year.
Blaming the 'artificially suppressed pricing' for tepid Q4 numbers, Gopal Vittal, MD and CEO, Airtel India & South Asia said, "The telecom industry continues to witness below cost, artificially suppressed pricing. Industry revenues were further adversely impacted this quarter due to the reduction in international termination rates."
"We have ended the financial year with our highest ever capital expenditure of Rs 240 billion. We intend to continue the rollout momentum next year as well," added Vittal.
Airtel's annual consolidated revenue stood at Rs 83,688 crore, down 9.8 per cent from the previous year. The company's consolidated net debt has increased to Rs 95,228 crore from Rs 91,714 crore in the previous quarter. However, its net revenue from Africa grew 13.4 per cent Y-o-Y.
The profit comes amid brokerage firms predicting huge losses for Airtel in the fourth quarter. The telecom major had posted a profit of Rs 373.40 crore in the corresponding quarter last year and Rs 305.80 crore in the sequential quarter ended December 31, 2017.
The country's biggest telecom operator said it has crossed 300 million mobile customer mark in India. Bharti Airtel's overall customer base now stands at 413.8 million across 16 countries.
Bharti Infratel, the towers arm of Bharti Airtel, announced its annual results on Monday. The numbers paint a rosy picture of the towers division and highlight the bleak situation at the core telecom business at the same time. For the financial year 2017/18, Bharti Infratel registered 8 per cent annual growth in revenues to Rs 14,490 crore. Its net profits slipped by 9 per cent to Rs 2,494 crore during the same period.
The matter with Airtel seems gloomy as its revenues and net profits have some component of Bharti Infratel's revenues and net profits. Bharti Airtel and its wholly-owned subsidiaries together have an equity holding of 53.51 per cent in Bharti Infratel. That means Airtel would have been in a worse situation if it didn't own stake in Bharti Infratel.
Airtel is trying to consolidate its position in the towers sector with acquiring more stake in Indus Towers, a joint venture between Bharti, Vodafone India and Idea Cellular. Last year, Bharti Infratel's board decided to explore and evaluate acquisition of stake in Indus Towers, with the aim of making it a subsidiary or wholly-owned subsidiary of Bharti Infratel. Currently, Bharti Infratel and Vodafone India own 42 per cent each in Indus; the remaining stake belongs to Idea.
In fact, Bharti Infratel has turned out to be a saviour for Airtel in more ways than one. For instance, Airtel divested 83 million shares of Bharti Infratel for Rs 3,325 crore through secondary share sale last year. The proceeds from the sale were used to pare Airtel's huge debt, the company had said in a statement.
The Company's Board has declared a final dividend of Rs 2.5 per share (face value of Rs 5 per share) for the financial year ended March 31, 2018. Together with the interim dividend of Rs 2.84 per share, total dividend for the year comes to Rs 5.34 per share, Airtel said in a regulatory filing.
"Airtel Africa's revenues grew by 10.7 per cent on a Y-o-Y basis. Data traffic grew 88 per cent, voice minutes increased by 37 per cent. The acquisition of TIGO in Rwanda was completed during the quarter and I am delighted to welcome more than 3 million TIGO customers to the Airtel family," said Raghunath Mandava, MD and CEO, Airtel Africa.