Bharti sees modest rise in net profit (Lead)January 22nd, 2010 - 4:47 pm ICT by IANS
New Delhi, Jan 22 (IANS) The price war in the telecom sector has taken a toll on Bharti Airtel, which posted a net profit of Rs.2,209.8 crore (Rs.22.098 billion/$479 million) for the quarter ended Dec 31, a modest 2.4 percent rise from the year-ago period.
As per the US accounting standards, the company’s income grew a little over one percent in the October-December quarter to Rs.9,722.2 crore from Rs.9,633.4 crore in the corresponding quarter last fiscal.
“Bharti Airtel continues to ensure a robust market share despite the hyper competition and maintains its drive for internal efficiencies by leveraging its scale economics,” company chairman and managing director Sunil Bharti Mittal said in a statement.
Bharti Airtel — in which Singapore Telecommunications has about 32 percent stake — not only competes with established players such as Reliance Communications, Vodafone and state-run Bharat Sanchar Nigam, but also with new operators offering low rates to attract subscribers.
The company, which has 125.3 million subscribers, including those in Sri Lanka, reported a 9 percent growth in cash profit from operations at Rs.4,088 crore in the quarter under review compared to Rs.3,755 crore in the like period last fiscal.
The tariff war has also taken a toll on the company’s ARPUs (average revenue per user), a key to gauge the profitability of wireless services.
Bharti’s ARPU dipped 8.7 percent in the quarter to Rs.230 as against Rs.252 in the previous quarter, and Rs.324 in the year-ago period.
The company’s average minutes of usage per user also fell to 446 in the period under review as against 450 in the second quarter.
Its quarterly earnings margin before interest, taxes, depreciation and amortization (Ebitda), contracted to 40 percent in third quarter of 2009-10 from 42.1 percent in the second quarter.
Ebitda margins for its mobile services — which contribute over 81 percent to the company’s total revenue — fell to 30.4 percent in the quarter from 31.9 percent in the corresponding previous period.
Airtel, which has been on the lookout for an overseas acquisition, said earlier this month it would acquire a 70 percent controlling stake in Bangladesh-based Warid Telecom to expand its global footprint.
The company had late last year failed to strike a deal for the second time with South African telecom giant MTN.
“The company is still open to acquisitions in the emerging markets,” said Bharti Airtel chief executive Manoj Kohli.
The Bharti scrip rose to Rs.329.80 following the announcement, a rise of 2.37 percent over its previous close. It was trading at Rs.322.50, at 2.04 p.m., marginally higher from its previous close.
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