Bharti Airtel Q4FY18: 5 key takeaways from financial performance

Bharti Airtel posted yet another disappointing quarter by reporting nearly 78% decline in consolidated net income to Rs 83 crore as on March 2018, compared to net income of Rs 373 crore a year ago same period. This down trend was seen in top-line also, with consolidated revenue coming at Rs 19,634 crore de-grew 5.4% Y-o-Y. 

Gopal Vittal, MD and CEO, India & South Asia said, “Airtel continued to consolidate its leadership position this quarter. Our strategic investments in data capacities, innovative digital content through Airtel TV, customer friendly bundles and upgrade programs led to the highest ever mobile data customer additions of 15 Mn during the quarter. Usage parameters remained robust– on a YOY basis, we saw data and voice traffic grow 584% and 55% respectively.”

Here’s a list of key takeaways from Bharti Airtel’s financial performance.

India business

India revenues for Q4’18 at Rs 14,796 crore have declined by 7.5% Y-o-Y (13.1% on reported) on an underlying basis. Y-o-Y de-growth primarily impacted by mobile drop of 13.5%. India other business have witnessed healthy Y-o-Y growth e.g. 10.7% in Digital TV and 11.2% in Airtel Business on an underlying basis. Mobile data traffic has grown more than 6x to 1,540 billion MBs in the quarter as compared to 225 billion MBs in the corresponding quarter last year. Mobile broadband customers increased by 79.3% to 76.6 million from 42.7 million in the corresponding quarter last year.

Tigo Rwanda

During the quarter, Bharti Airtel acquired Tigo Rwanda country operations in Africa. Financials and operational parameters of the combined entity are part of consolidated results. In constant currency (1st Mar’17) terms, Africa revenues grew by 10.7% Y-o-Y led by strong growth in data and Airtel money transaction value. 

Raghunath Mandava, MD and CEO, Africa, said, "The acquisition of TIGO in Rwanda was completed during the quarter and I am delighted to welcome more than 3 mn TIGO customers to the Airtel family. We continue to focus on expanding our revenue base, underpinned by strong investments in networks and contain costs.”

Data traffic

Mobile data traffic grows to 1,616 Bn MBs in the quarter; growth of 505% Y-o-Y. Mobile data traffic has grown by 88% to 70 Bn MBs in the quarter as compared to 37 Bn MBs in the corresponding quarter last year. Data customers increased by 48% to 24.9 million from 16.9 million in the corresponding quarter last year. Active Airtel Money customer base increased to 11.5 million, boosting the total transaction value on Airtel Money platform by 45% to $ 5.6 billion. Continuous cost control initiatives have resulted in improvement of EBITDA margin by 10.3% Y-o-Y and stands at 35.9%.

Dividend

The Company’s Board has declared a final dividend of Rs 2.5 per share (face value of Rs 5 per share) for the financial year ended March 31, 2018. Together with the interim dividend of Rs 2.84 per share, total dividend for the year comes to Rs 5.34 per share (PY: Rs 1.00 per share), which is entirely a pass through of dividend from the subsidiaries.

Net Debt

Consolidated net debt has increased to Rs 95,228 crore from Rs 91,714 crore in the previous quarter. Net debt to EBITDA ratio (LTM) for the quarter at 3.23 times (vs 3.01 times in the previous quarter). Lower EBITDA along with rising spectrum costs and continued investments in India have resulted in deterioration of Return on Capital Employed (ROCE) to 4.7% from 6.5% in the previous year. 

Talking on outlook ahead, Vital said, “In line with our goal of building market leading 4G networks, with best in class speeds and capacity; while supporting the Digital India initiative, we have ended the financial year with our highest ever capital expenditure of Rs 240 billion. We intend to continue the rollout momentum next year as well”