Bharti profit falls 33% on costs, Africa

Dylan Bushell-Embling
06 May 2011

India's Bharti Airtel said its full-year profit fell 32.6% to 60.46 billion rupees ($1.35 billion), due to increased expenses as well as continued losses at its African units.

The company blamed forex losses, an increase in spectrum charges and costs incurred changing its brand name to Airtel for the decline in profit for the year ending in March.

Bharti's African operations, purchased from Zain for $10.7 billion in June 2010, also incurred losses of 14.3 billion rupees ($319.5 million) for the year.

Ebitda margins fell by 6.5% to 33.6%, which was equally attributed to taking on the lower-margin African business, as well as continuing price pressures in the cut-throat Indian market.

But the company said its African operations were primarily responsible for the 42.1% increase in revenue for the year to 594.67 billion rupees. Revenue from India and South Asia grew 11%.

For the fourth quarter, Bharti reported net income of 14 billion rupees, down 31.5% year-on-year – higher than the 18% slump that analysts had been expecting. Revenue grew 51% year-on-year to 162.7 billion rupees.

The African operations reported combined losses of 4.14 billion rupees, but this was an improvement on the 5.25 billion rupee losses from the December quarter.

The company added 13.1 million customers during the quarter, and 83.9 million over the year, to end March with 220.9 million customers across 19 countries.

But while it remained the market leader in India, its market share fell to 20% from 21.8% last year.

Blended ARPU in India and south Asia fell to 194 rupees in Q4 from 198 rupees in Q3, while African ARPU fell to $7.20 from $7.30 over the same period.

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