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Airtel has just slipped into danger zone with dropped Pretax profits below 10{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3}!

(Bharti Airtel, India’s largest mobile operator company, has today announced the financial results for FY 11-12. Telecomblogs, recently posted the article mentioning Airtel’s losing advantage in India market, which is evident from today’s results. As compared to FY 10-11, where Airtel had pre-tax profit of healthy 12{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3}, which has been dropped to mere 9{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} of total revenue this year. There’s significant pressure on Airtel to remain profitable without losing its market leader position. The urgency remains to restructure costs, improve efficiencies & maintain enough free cash to sustain advantage. Read below press release.)

Bharti Airtel Limited (“Bharti Airtel” or “the Company”) today announced its audited consolidated IFRS results for the fourth quarter and year ended March 31, 2012.

Revenue growth in the fourth quarter was fueled by increased customer additions and strong minutes growth inIndia. Despite a national strike for 9 days in Nigeria, Africa revenues continued its growth trend. Consolidated EBITDA margin was sustained at a robust level of 33.3{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} benefiting from scale and cost efficiencies. The Consolidated Net Income of ` 1,006 crore (Q4 FY 11: ` 1,401 crore) was impacted by higher costs on account of 3G license fee amortization (`106 crore), 3G interest costs (` 84 crore), forex fluctuation losses (` 132 crore) and tax provisions (` 198 crore).

Revenue growth of 11.6{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} for the full year in India & SA was mainly contributed by stability in pricing accompanied by robust growth in customer numbers.Africa, after adjusting for the number of days in Q1 FY11, grew by 18.8{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} in $ terms, on the back of network expansion and a growing customer base. Consolidated EBITDA margins for the full year dropped to 33.2{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} (FY 11: 33.7{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3}), but Africa improved to 26.5{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} (FY 11: 21.9{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3}). The Consolidated Net Income for the year at ` 4,259 crore (FY 11: ` 6,047 crore) was impacted by higher costs on account of 3G license fee amortisation (` 593 crore), 3G interest costs (` 421 crore), forex fluctuation losses (` 422 crore) and tax provisions (` 481 crore). The Net Debt – Equity ratio is at 1.29 (FY11: 1.23) and Net Debt – EBITDA ratio improved to 2.56 (FY11: 2.95).

Highlights for the fourth quarter ended March 31, 2012:

  • Overall customer base stands at 252 million, across 20 countries.
  • Total revenues at  18,729 crore, up by 15{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} Y-o-Y.
  • India & South Asia revenues at 13,421 crore, up by 10.5{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} Y-o-Y.
  • Africa revenues at $1,071 million, up by 15.9{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} Y-o-Y.  In Rupee terms, Africa revenue growth is at 28.8{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3}.
  • Consolidated EBITDA of 6,233 crore, up by 13.7{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} Y-o-Y. EBITDA margin at 33.3{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3}.

Highlights for the year ended March 31, 2012:

  • Total revenues at ` 71,451 crore, up by 20.0{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} Y-o-Y.
  • India & South Asia revenues at ` 51,893 crore, up by 11.6{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} Y-o-Y.
  • Africa revenues at $4,137 million, up by 43.7{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} Y-o-Y. In Rupee terms, Africa revenue growth is 51.5{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3}. (1)
  • Consolidated EBITDA of ` 23,712 crore, up by 18.1{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} Y-o-Y. Full year EBITDA margin at 33.2{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3}.

In a statement, Mr. Sunil Bharti Mittal, Chairman & Managing Director, Bharti Airtel Limited, said:

“I am pleased that the year has ended with the Company’s customer base crossing 250 million across twenty countries, the twentieth country beingRwanda. Our launch of 4G LTE, the first inIndia, is testimony to our commitment to the broadband agenda. The recent regulatory developments inIndiawill have significant implications on the future of telephony and broadband, as well as India’s global competitiveness. The entire industry looks to the Government for a fair, transparent and sustainable telecom regime”

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