Bharti Airtel , the country’s largest telecom operator by subscribers, surpassed analysts’ estimates on Tuesday with first quarter profit surging 23.8 percent sequentially to Rs 1,554.3 crore. The bottomline was boosted by one-time gain of Rs 458 crore (out of total exceptional item of Rs 1,431.4 crore) on sale of Africa tower assets but higher tax cost restricted growth. After accounting for exceptional items (net gains of Rs 458 crore), the consolidated net income increased by 40.2 percent year-on-year to Rs 1,554 crore, said the company that operates in 20 countries across Asia and Africa. Revenue grew by 2.8 percent to Rs 23,670.9 crore compared to Rs 23,015.5 crore in March quarter, driven by better-than-expected growth in domestic business. Profit was estimated at Rs 1,327 crore on revenue of Rs 23,307 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18. Consolidated operating profit (earnings before interest, tax, depreciation and amortisation) rose 2.6 percent quarter-on-quarter to Rs 8,262 crore but margin slightly missed street expectations, down 10 basis points to 34.9 percent. Analysts had expected operating profit at Rs 8,203 crore and margin 35.2 percent for the quarter.Tax expenses more than doubled to Rs 2,178.1 crore from Rs 1,081.1 crore, quarter-on-quarter. Revenue from its India business in Q1 grew by 2.9 percent to Rs 13,798.7 crore with EBITDA spiking 35.7 percent (at Rs 7,021.3 crore) and margin expansion of 183 basis points (at 40.4 percent) on sequential basis. Revenue growth was estimated at 0.7 percent with 2 percent rise in EBITDA and 43 basis points expansion in margin, according to a poll. Average revenue per user (ARPU) remained unchanged at Rs 198 compared to previous quarter and minutes of usage per subscriber improved to 424 minutes from 418 minutes during the same period while estimates were Rs 195 and 419 minutes, respectively. Bharti also beat on volume front as it registered a 4.7 percent sequential growth in volume at 290.8 billion minutes compared to 277.8 billion minutes while expected volume growth was 3 percent. However, voice realisation per minute missed forecast, coming in at 34.93 paise against 36.22 paise Q-o-Q (and expectations of 35.2 paise). “Overall customer base stood at 331.9 million (against 324.4 million Q-o-Q) across 20 countries at the end of June quarter. With 318 million wireless customers, Airtel is now clearly the No 3 in the world in customer base terms,” said Bharti in its filing. Data average revenue per user increased by 3 percent to Rs 181 but data realisation per MB dropped 5 percent to 25.57 paise compared to previous quarter. Africa earnings were almost in line with estimates. Revenue declined 0.9 percent sequentially to Rs 6,159.6 crore and operating profit slipped 1.8 percent to Rs 1,267.4 crore in June quarter. EBITDA margin was down 40 basis points to 20.3 percent from 20.7 percent quarter-on-quarter. Average revenue per user from Africa business stood at USD 4.30. During the quarter, the gross sale proceeds of the tower disposals were USD 1,340 million, of which USD 243 million has been received on or before June 2015, said the company. The remaining USD 1,097 million, was included in “receivable from sale of tower assets” in the balance sheet in June 2015 and has been netted off in the computation of net debt, it added.It has divested telecom tower assets in Uganda, Ghana, Congo Brazzaville and Nigeria for debt reduction. Finance cost declined to Rs 1,927.6 crore in June quarter from Rs 1,970.3 crore in March quarter. Its consolidated net debt excluding the deferred payment liabilities to the DOT and finance lease obligations stood at USD 7.64 billion at the end of June quarter, declined from USD 8.39 billion in March quarter. Net debt excluded finance lease obligation (FLO) of USD 665 million arising from lease back of towers post the sale of towers in Africa. During the quarter, the agreement between company and Helios Towers Africa for sale of tower assets in Tanzania and Chad was terminated. However, its subsidiary Bharti Airtel International Netherlands BV entered into non-binding but exclusive agreement with France’s Orange SA to explore the possible acquisition of group’s subsidiaries in Burkina Faso, Chad, Congo Brazzaville and Sierra Leone by Orange SA. The board of directors has approved the establishment of sponsored level 1 ADR program in the United States, subject to all subsequent regulatory approvals and clarifications from SEBI and RBI, said the company. These ADRs can be traded on the US OTC market. Bharti Airtel has appointed Nilanjan Roy as its Global CFO.
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