Bharti Airtel posts 12% decline in revenues in Q4 due to competition from Jio

Bharti Airtel on Tuesday posted a 12.1% decline in its consolidated revenues for the fourth quarter as it fell to Rs 21,935 crore in Q4 FY17 from Rs 24,960 crore in the corresponding quarter last year. Airtel's India revenues for Q4 FY17 dropped by 7.1% at Rs 17,036 crore primarily led by mobile drop of 11.4% Y-o-Y.

Giving an indication that the its India revenues have declined due to competition for new entrant Reliance Jio, it said in the release, “Mobile market remains turbulent in the current quarter as well due to free offering by a new operator.”

Bharti Airtel's profit after tax (PAT) declined by 57% as it stood at Rs 1,251 crore in Q4 FY17 from Rs 2,908 crore in the same quarter last year. It's net income too took a big hit as it declined by 71.7% to Rs 373 crore during the quarter from Rs 1,319 crore in the same quarter last year.

“We have added significant data capacities by rolling out over 72,000 incremental Mobile Broadband base stations vs last year. Mobile Broadband customers increased by 20.5% to 42.7 million from 35.5 million in the corresponding quarter last year. Mobile Data revenues now contribute to 21.5% of Mobile India revenues vis-à-vis 23.3% in the corresponding quarter last year,” it said.

Active Airtel Money customer base at 9.0 million, increasing the total transaction value on Airtel Money platform by 35.1% to $4.0 billion.

Consolidated EBITDA at Rs 7,993 crore de-grew 13.0% Y-o-Y with EBITDA margin dropping by 0.4% to 36.4%, led by India SA margin drop of 2.4% Y-o-Y on an underlying basis.

The consolidated EBIT of Rs 2,964 crore represents a Y-o-Y de-growth of 31.4% on account of higher spectrum amortization costs in India. Net interest costs of Rs 1,908 crore have risen from Rs 1,524 crore in the corresponding quarter last year – largely due to increased spectrum related interest costs, it said.

Annual consolidated revenues of Bharati Airtel in FY17 declined by 1.1% as it's revenues stood at Rs 95,468 crore from Rs 96,532 crore in FY16. This was led by growth of 3.6% in India.

It's Africa top-line grew by 4.4% (constant currency) on an underlying basis. The company's consolidated revenue growth was impacted by 2.7% due to currency devaluation in Africa primarily contributed by Nigerian Naira.

Airtel's PAT for FY17 declined by 16.7% and net income was down 37.5%.

The company’s consolidated net debt has decreased to $14,094 million from $ 14,339 million in the previous quarter. Net debt excluding the deferred payment liabilities to the DOT and finance lease obligations has decreased to $7,321 million from $7,650 million in the previous quarter.

Net debt to EBITDA ratio (LTM) for the quarter has moved to 2.73 times from 2.69 times in the previous quarter. High spectrum costs and consequent increase in associated amortization costs has resulted in deterioration of Return on Capital Employed (ROCE) to 6.5% from 8.3% in the previous year.

The Board has proposed a final dividend of Rs 1 per share (face value of Rs 5 per share) for the financial year ended March 31, 2017, subject to approval by the shareholders.