Bharti sees net fall for first time in 3 years
Press Trust of India, April 28, 2010 (New Delhi)
Telecom operator Bharti Airtel's net profit fell -- the first time in three years -- by eight per cent in Q4, as cut-throat competition ate into margins at a time when it is raising debt to fund its $9 billion acquisition in Africa.
Net profit stood at Rs 2,060 crore, down eight per cent from a year ago, although the company's total revenues crossed the Rs 10,000 crore mark (Rs 10,060 crore) for the first time in the quarter.
This was so because of falling call charges in an increasingly competitive market.
Revenues of telecom operators have come under pressure with the entry of 14 new players, as they are offering rock bottom call tariff to woo customers.
However, there was some comfort for Airtel in Q4 as the company finally recorded a rise in minutes of usage per user after registering a fall for six straight quarters.
Bharti shares closed down 1.26 per cent at Rs 294.50. "Bharti Airtel continues to be strongly positioned in India despite a hyper competitive market," Bharti Airtel Ltd chairman and managing director Sunil Bharti Mittal said.
For the full-year 2009-10, the consolidated revenue was up 7 per cent at Rs 39,620 crore year-on-year, while its net profit was up 7 per cent at Rs 9103 crore.
Bharti Airtel's Average Revenue Per User (ARPU) was at Rs 220 in the fourth quarter, 4.3 per cent down from Rs 230 in the quarter ended December 31.
The company made acquisitions in Bangladesh and Africa during the quarter, including the $9 billion acquisition of the African assets of Kuwait's Zain telecom.
Besides raising finances for the Zain acquisition, the company has also announced a capex of $800 million for building the network of Zain Africa.
Its earnings before interest, taxes, depreciation and amortisation, or EBITDA margin (an indicator of profitability)- excluding acquisition costs--contracted to 39 per cent from 40 per cent in the fiscal due to lower tariffs.
The EBIDTA margin for its mobile services that contribute more than 81 per cent to the company's total revenue fell to 29.2 per cent from30.4 per cent in the previous quarter.
The company added 8.8 million users in the fourth quarter,including those from Bangladesh and Sri Lanka.
The company's operating expenses also rose 20 per cent year-on year to Rs 4,107 crore because of a sharp increase in network costs.
Indian mobile operators have been adding 13-16 million subscribers a month.
Net profit stood at Rs 2,060 crore, down eight per cent from a year ago, although the company's total revenues crossed the Rs 10,000 crore mark (Rs 10,060 crore) for the first time in the quarter.
This was so because of falling call charges in an increasingly competitive market.
Revenues of telecom operators have come under pressure with the entry of 14 new players, as they are offering rock bottom call tariff to woo customers.
However, there was some comfort for Airtel in Q4 as the company finally recorded a rise in minutes of usage per user after registering a fall for six straight quarters.
Bharti shares closed down 1.26 per cent at Rs 294.50. "Bharti Airtel continues to be strongly positioned in India despite a hyper competitive market," Bharti Airtel Ltd chairman and managing director Sunil Bharti Mittal said.
For the full-year 2009-10, the consolidated revenue was up 7 per cent at Rs 39,620 crore year-on-year, while its net profit was up 7 per cent at Rs 9103 crore.
Bharti Airtel's Average Revenue Per User (ARPU) was at Rs 220 in the fourth quarter, 4.3 per cent down from Rs 230 in the quarter ended December 31.
The company made acquisitions in Bangladesh and Africa during the quarter, including the $9 billion acquisition of the African assets of Kuwait's Zain telecom.
Besides raising finances for the Zain acquisition, the company has also announced a capex of $800 million for building the network of Zain Africa.
Its earnings before interest, taxes, depreciation and amortisation, or EBITDA margin (an indicator of profitability)- excluding acquisition costs--contracted to 39 per cent from 40 per cent in the fiscal due to lower tariffs.
The EBIDTA margin for its mobile services that contribute more than 81 per cent to the company's total revenue fell to 29.2 per cent from30.4 per cent in the previous quarter.
The company added 8.8 million users in the fourth quarter,including those from Bangladesh and Sri Lanka.
The company's operating expenses also rose 20 per cent year-on year to Rs 4,107 crore because of a sharp increase in network costs.
Indian mobile operators have been adding 13-16 million subscribers a month.
Our comments:The government appointed Sam Pitroda committee to look into the affairs of the BSNL wherein it was suggested to go after some private operators workers ratio. Bharati has stated that its profits have declined. When a private operator known for efficient management has to say, that its profits have gone down because of cut throat competition,.so there is no surprise for a govt. enterprise having a lot of difficulties inching towards loss this year.Bharati operating expenses also rose to 20 percent. BSNL has to spend a lot for wage bill. In spite of so many hurdles, BSNL is performing far better than many operators in terms of manpower,equipment shortage,signal strengthening etc.
We have to thank our beloved customers for having faith on govt. enterprise and govt. policies. People
still like us but we have to go to them.
still like us but we have to go to them.
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