Bharti net dips 8%; first time in 5 years

However, there were some bright spots as well. The quarter saw Bharti Airtel crossing the Rs 10,000-crore mark in terms of total revenues for the first time at Rs 10,056 crore. Further solace came from the fact that in contrast to revenues declining on a sequential basis in Q2 and Q3 — which was also for the first time in Bharti?s history ? the fourth quarter witnessed a 3% jump of Rs 280 crore. The day also saw rating agency Crisil reaffirming its rating of AAA for Bharti Airtel.

Bharti group deputy managing director Akhil Gupta termed the latest earnings as a trend reversal ? though challenging times continue in the telecom space, certainly the temporary phase of margins coming under pressure with falling revenues and average talk-time declining is over. ?We can clearly say that the era of irrational pricing is now ending and the revival in the minutes of usage along with the hike in the revenue is an indication of that?, Gupta said.

In an exclusive interview with FE later, Bharti Airtel CEO Sanjay Kapoor said that going forward, ?the propensity to drop prices looks bleak, no matter who you are.? He also said that consolidation has already started happening in customers? minds, with the top two operators jointly commanding a 50% market share.

Kapoor also attributed the decline in net revenue during the quarter to the Warid and Zain acquisitions. ?We acquired two companies in this fiscal: Bangladesh ?s Warid Telecom and Zain Telecom?s African operations. The one-time acquisition expenses of Rs 98 crore along with a deferred tax liability of Rs 171 crore led to a decline in the net profit. But for it, there would have been an increase of 4%. Hence the dip is not a matter of concern for us.?

For the full fiscal year, Bharti?s net profit stood at Rs 9,103 crore, up 7% against last year?s Rs 8,470 crore. Total revenues were also up 7% at Rs 39,615 crore against last year?s Rs 36,962 crore. Ebidta declined from 41% in the last financial year to 40.7% in 2009-10, while the net debt-to-equity ratio was -0.03 for the year. The company also announced a dividend of Re 1 per share.

The average revenue per user (Arpu) for the quarter fell 28% to Rs 220 on a yearly basis, while the minutes of usage for the same period declined by 4%. However, on a sequential basis, minutes of usage went up 5%. On the international front, Bharti expects early closure of its $9-billion deal to acquire Zain?s Africa operations. Gupta said that though capex for Zain would be finalised only after the closure of the deal, it would be a minimum of $800 million, the amount the company spent last year. On the domestic front, capex for the current fiscal would be $1.5-1.8 billion, compared to last year?s $1.7 billion. There would not be any increase because of the rollout of 3G services, because most of the 2G capex would be replaced by 3G.