Owing to a one-time tax provisioning charge, Bharti Airtel on Tuesday missed estimates on the net profit front during the July-September quarter. The company saw a 17% quarter-on-quarter fall in its net profit to Rs 1,341 crore against Bloomberg estimate of Rs 3,205 crore.
Bharti booked an exceptional item of Rs 1,570 crore, towards tax provisioning, including interest charge, as a result of the recent Supreme Court order treating licence fee since July 1999 as capital expenditure.
The company said the Supreme Court decision has resulted in an additional tax provision of Rs 226 crore primarily due to change in effective tax rate on account of adoption of new tax regime. “The interest charge of Rs 1,350 crore on the above matter has been presented as an exceptional item. Additionally, exceptional item includes a charge of Rs 220 crore on account of re-assessment of regulatory levies,” it said.
Even in the absence of exceptional item, Airtel’s consolidated net profit at Rs 2,959 crore was below estimates, on account of weak performance by the Africa business due to foreign exchange headwinds.
Fall in revenues of Africa business, also affect the consolidated revenues of Airtel, which also missed estimates and fell over 1% sequentially to Rs 37,044 crore. Bloomberg had estimated revenues at Rs 38,097 crore.
Owing to sequential fall in revenues, the company’s consolidated Ebitda at Rs 19,665 crore also missed estimates and fell marginally, from 19,746 crore in the preceding quarter. Ebitda margin expanded by 40 basis points to 53.1% from 52.7% in the preceding quarter.
The company’s India revenue was up 2.4% sequentially to Rs 26,995 crore, while revenue from India mobile services was up 2.7% q-o-q to Rs 20,952.1 crore.
The average revenue per user (Arpu), rose 1.5% sequentially to Rs 203. The reason for growth in Arpu can be attributed to increase in engagement over the network and increase in number of subscribers. Bharti’s Arpu is the best in the industry, and remains ahead of Reliance Jio and Vodafone Idea at Rs 181.7 and Rs 142, respectively.
However, Bharti continues to lag behind Jio on data usage per customer in the country. The company’s data usage per customer per month was at 21.7 GB whereas Jio is at 26.6 GB. At 21.7 GB, Bharti’s data usage per customer was up 2.8% sequentially. The total data consumption on the company’s network rose 5.6% q-o-q to 15.75 billion GB.
On minutes of voice usage per customer per month, Bharti continues to be ahead of Jio and Vodafone Idea. However, similar to Jio and Vodafone Idea, Airtel also witnessed a fall in voice consumption on the network during the quarter. Airtel’s average minute of usage on the network fell 1.3% sequentially to 1,123 minutes per user per month. Comparatively, Jio’s average voice consumption on the network was at 979 minutes.
Airtel’s monthly churn of subscribers rose to 2.9% from 2.8% in the preceding quarter. On a net-basis, the company added 3.7 million mobile subscribers in India, taking its total base to 342.3 million as of September end.
The company said its 4G/5G users are now 71.8% of the overall mobile customer base of the company in the country.
“Our India revenue continues to gain momentum and grew sequentially by 2.4%. Our consolidated revenue however was impacted by the devaluation of the Nigerian Naira,” said Gopal Vittal, managing director of the company, in a statement. “Consolidated Ebitda margins expanded to 53.1% supported by a strong war on waste programme,” he added.
