Hit hard by SC’s AGR order, Bharti Airtel posts huge loss of Rs. 23,045 crore in Q2.
Bharti Airtel on Thursday posted its biggest consolidated net loss at Rs. 23,045 crore for the July-September quarter on the back of provisions for the licence fee and spectrum usage charge based on the definition of the Supreme Court of what constitutes adjusted gross revenue.
The company made an exceptional charge during the quarter of Rs. 22,394 crore (net of tax) which comprises a charge on account of licence fee and SUC of Rs. 16,815 crore and Rs. 11,635 crore, respectively.
Bharti said in the absence of available reliefs, with respect to the operations of the company, the liabilities/provisions as at September 30, 2019, aggregate Rs. 34,260 crore (comprising principal of Rs. 8,747 crore, interest of Rs. 15,446 crore, penalty of Rs. 3,760 crore and interest on penalty of Rs. 6,307 crore).
As is known, the Supreme Court has directed the telcos to pay their dues within three months of the order (pronounced on October 24) and the department of telecom on November 13 issued demand notices to the telcos, which gives them time till January 25, 2020, to make the payment.
The companies have been directed to make the payment on a self-assessment basis.
“The management is reviewing its options and remedies available, including but not limited to filing petitions before the Supreme Court, and also seeking other reliefs, with others affected in the industry, from the government. As on the date, the management understands that the government has formed a high-level committee of secretaries across ministries to assess the stress in the industry and recommend suitable measures,” Bharti said in a statement.
The company’s MD and CEO, India and South Asia, Gopal Vittal, said in a statement, “On the AGR verdict of the Hon’ble Supreme Court, we continue to engage with the government and are evaluating various options available to us. We are hopeful that the government will take a considerate view in this matter given the fragile state of industry.”
Bharti also said that the uncertainty arising out of the SC ruling on AGR may cast significant doubt on the group’s ability to continue as a going concern.
During the preceding quarter, Bharti had posted a net loss of Rs. 2,866 crore.
During the September quarter, consolidated revenues increased 1.9% sequentially to Rs. 21,131 crore. Earnings before interest, tax, depreciation and amortisation (Ebitda) grew 5.2% q-o-q to Rs. 8,936 crore, while margin expanded to 42.3%, up 130 bps sequentially.
Bharti’s India revenues during the quarter was up 0.10% at Rs. 15,361 crore q-o-q while its India mobile services revenues were up 1.05% on a sequential basis at Rs. 10,981 crore.