Bharti Airtel Ltd on Wednesday said that its consolidated net profit declined by 28 per cent, to Rs 1,215 crore for the first quarter ended June 30, 2011 against Rs 1,682 crore in the corresponding quarter last year.
The drop in profit was mainly due to higher tax payout and increased interest cost on debt taken to fund an acquisition in Africa and to pay for third-generation (3G) spectrum in India.
The effective tax rate for Q1 increased to 29.9 per cent due to reduction in tax holiday benefits. Net debt for the company stood at Rs 60,018 crore at the end of first quarter compared to Rs 60,230 crore last year. Capital expenditure for the quarter increased to Rs 4,348 crore compared to Rs 1,836 crore last year.
Top officials to forego pay hike
In a bid to drive down costs, all Corporate Directors and Chief Executive Officers (Asia and Africa) of the company have volunteered for no increase in their remuneration for the current fiscal. The company's consolidated total revenue was up by 38.6 per cent to Rs 16,975 crore. Operations in Africa accounted for 26 per cent of the revenues with revenues of $979 million (Q4 FY11: $924 million). India & South Asia sustained double digit revenue growth (Y-o-Y 11.9%).
In a statement, Mr. Sunil Bharti Mittal, Chairman and Managing Director, Bharti Airtel Ltd, said: “Revenue growth has been steady across all geographies, with Africa recording a healthy sequential growth of approximately 6 per cent, and annual growth of 21 per cent. In India, the company's efforts in the area of cost efficiencies have helped arrest the margin decline. The new customer facing organisation in India will see more agile and responsive teams in action. This will also give a fillip to growth in value-added services, broadband, digital TV and airtel money. Overall, 2011-12 promises to be an exciting year of transformation”.
Subscriber numbers
The company's overall subscriber numbers increased 26 per cent from 183 million in the first quarter last year to 230 million at the end of June 30, 2011. DTH subscriber base almost doubled to 6.2 million from 3.2 million. Mobile user base increased 25 per cent to 221 million, of which 46 million was from Africa. Growth in subscriber base was accompanied by growth in total minutes on the network which grew by 22 per cent.
However, the net subscriber addition on Airtel's mobile network was down 22 per cent. During the quarter the operator added 6.9 million new users compared to over 9 million in the corresponding quarter last year. Net addition for the industry was down 18 per cent at the same time.
ARPU down
Average revenue per user was down 12 per cent to Rs 190 ($7.3 in Africa) and average revenue per minute was down 5 per cent to 42.8 paisa (6 cents in Africa). Minutes of use per user has also dropped 7 per cent to 445 minutes (121 minutes in Africa). Monthly churn is up to 6.4 per cent from 5.8 per cent, likely due to Mobile Number Portability. Non-voice revenue now accounts for 14.6 per cent of wireless income compared to 11.6 per cent earlier.