With tower sale and data boom, Airtel Q1 net profit up 40%

Bharti Airtel, the largest telecom operator in India, reported 24 per cent sequential increase in its June quarter net profit to Rs 1,554 crore, supported by strong performance of its India business and a one-time gain from sale of Africa tower assets. The profit was aided by a net benefit after tax of Rs 458 crore, mainly related to the hiving off of tower assets in four African countries for about $1.3 billion.

Consolidated mobile data revenues rose 56.9 per cent year-on-year to Rs3,459 crore, helped by an 86.5 per cent growth in data traffic.

Consolidated EBITDA in Q1-2016 at Rs 8262 crore grew by 6.4 per cent y-o-y with EBITDA margin expanding by 1.1 per cent to 34.9 per cent, driven by India’s margin expansion by 2.1 per cent y-o-y.

Airtel has a customer base of over 230 million in India with over 100 million rural customers. “Mobile minutes and data traffic have grown by 7.4% and 83.4% respectively”, Gopal Vittal, MD and CEO, India & South Asia, said in a statement, as per the Economic Times. India revenues grew 10 percent year-over-year, while mobile revenue increased by 12.2 percent.

Shares climbed as much as 3.5 percent, the biggest intraday jump since July 21, and traded 2.3 percent up at 422.55 rupees as of 9:19 a.m.in Mumbai.

The net finance cost of Bharti Airtel nearly doubled to Rs 1,927.6 crore during the first quarter of the current fiscal, from Rs 964.3 crore in the year-ago period. Analysts, on average, expected Bharti Airtel to report a profit of Rs 13.27 billion. Data revenues contribute to 12.9% of overall Africa revenues vis-à-vis 8.8% in the corresponding quarter previous year.

Data revenues in Africa stood at United States dollars 128 million with growth of 48.5 per cent on annual basis, the statement said. The resultant consolidated EBIT of Rs 4,216 crore represents a Y-o-Y growth of 14.2 percent, with EBIT margin improving by 1.7 percent. “Our capex programme is mostly directed at increasing 3G/4G coverage and improving all-round customer experience”. In terms of customer base, Airtel ranks No. 3 worldwide. The data customer penetration at 16.6 percent reflects the untapped potential in the internet space.