India’s Bharti Airtel Ltd.’s consolidated total revenue grew 13.4% to U.S. $3.5 billion in its most recent quarter compared with the same period last year, the company said Friday as it announced its audited consolidated international financial reporting standards results for its fiscal second quarter and half year.
However, during the three-month period that ended Sept. 30, profit dropped 38% to $208 million, compared with $336 million in the same quarter of the previous year, the company said.
The recent tariff increase in India has begun to take effect, offsetting some of the inflationary pressures and cost increases affecting the telecom industry. Bharti Airtel said it incurred foreign exchange restatement losses of $48.4 million (compared with a gain of $50.4 million in the same quarter last year) because of the U.S. dollar’s appreciation against the rupee and several African currencies.
Bharti Airtel said that quarterly revenue from its Africa operations crossed the $1 billion mark for the first time, coming in at $1.03 billion, a gain of 22.9% compared with the same period last year. The company’s profit margin in Africa increased to 26.2% from 23.2% in the same quarter last year.
Sunil Mittal, Bharti Airtel’s chairman and managing director, said the company “has launched 3G services in Congo B and Airtel Money in Zambia and Kenya. We continue to expand our footprint across Africa, with our recent acquisition of a 2G and 3G license in Rwanda.”
Bharti Airtel said the rollout of 3G services resulted in a $33.2 million increase in amortization costs and increased net interest costs by $23.3 million. The impact of recent rulings on regulatory issues has been accounted for in the quarter’s earnings report, the company said.
Income before taxes was $306 million, down from $451 million in the same quarter last year. Consolidated margins on earnings before interest, dividends, taxes and amortization held steady at 33.7% despite the cost pressures.
“This year is progressing well for Bharti Airtel,” Mittal said. “India has achieved double-digit growth fueled by non-voice businesses. The arrest of continuously declining prices in India augurs well for the telecom industry. We look forward to constructive deliberations on the draft National Telecom Policy 2011 and TRAI recommendations for promoting the government’s broadband vision and viability of the sector,.”
Bharti Airtel’s net debt-to-equity ratio increased to 1.33 in its fiscal second quarter from 1.20 in the preceding quarter. The company’s net debt-to-EBITDA ratio shrank to 2.59 from 2.63 in that same time.
Some of the highlights of the fiscal second-quarter results:
- Overall customer base stands at 237 million, across 19 countries.
- Non-voice revenues at $568 million, up 30.1% from same quarter last year.
- India and South Asia revenues at $2.6 billion, up 11.7% from same quarter last year.
- Consolidated EBITDA of $1.2 billion, up 13.2 from same quarter last year.
- The digital TV business in India achieved break-even EBITDA, less than three years after commencement.
