Bharti Airtel Q2'18 results hit by Jio effect: Net profit falls 76.5% Y-o-Y to Rs 343 crore
Bharti Airtel, along with other incumbent telecommunication service providers, has been engaged in a fierce tariff war with Mukesh Ambani-controlled Reliance Jio.
- Oct 31, 2017,
- Updated Oct 31, 2017 8:55 PM IST
Effects of ongoing tariff war in telecom sector was evident in Bharti Airtel's quarterly results released today. The quarter that ended on September 30, 2017 saw the net profits of country's largest telecom company nosediving to Rs 343 crore, a decline of 76.5 per cent in comaprison to the same quarter in the corresponding year. The consolidated revenues earned by the company during the second quarter of the current fiscal slipped to Rs 21,777 crore, falling 11.7 per cent, a statement by Bharti Airtel said. Bharti Airtel had posted net profit of Rs 1,461 crore for the July-September quarter of last fiscal. The total revenues posted by the telco in the same period amounted to Rs 24,652.
The consolidated revenues for just-ended quarter, at Rs 21,777 crore, represented a year on year drop of 10.4 per cent (reported drop of 11.7 per cent) on an underlying basis (that is adjusted for Africa and Bangladesh divested operating units and tower assets sale), Airtel said in a statement. On the other hand, India revenues posted by the company for the September quarter at Rs 16,728 crore have declined by 13 per cent over the year ago period, led by mobile drop of 16.8 per cent.
Meanwhile, the company's consolidated net debt rose to Rs 91,480 crore as opposed to Rs 87,840 crore as seen in the previous quarter. Net debt excluding the deferred payment liabilities to the Telecom Department and finance lease obligations increased by Rs 2,554 crore sequentially in the quarter, the company added.
Mobile market continues to experience value erosion and financial stress led by competitive pressures, Airtel mentioned in the statement.
"The financial stress in the industry continues due to double digit revenue decline and will be further accentuated by the reduction in IUC rates in the next quarter. This will eventually force operator consolidation and exits as we have witnessed in the recent past," Gopal Vittal, MD and CEO, India and South Asia, Bharti Airtel said in the statement.
Bharti Airtel, along with other incumbent telecommunication service providers, has been engaged in a fierce tariff war with Mukesh Ambani-controlled Reliance Jio. Over the past few quarters, Bharti Airtel has been blaming the "pricing disruption" in the Indian telecom market casued by Jio's freebies for the eating into industry revenues and stress on sector profitability, cash flows and leverage.
The company said it had "stepped up" the capex investments in the quarter on the back of data coverage and capacity.
Bharti Airtel's net interest costs increased to Rs 1,905 crore compared to Rs 1,603 crore in the same quarter last year on account of lower investment income.
"The forex and derivative loss for the quarter was at Rs 422 crore compared to loss of Rs 302 crore in the corresponding quarter last year," it said.
On the day of the quarterly results, the shares of the company closed at Rs 497.65 a piece, after rising by 0.98 per cent over the previous close on BSE.
(With PTI inputs)
Effects of ongoing tariff war in telecom sector was evident in Bharti Airtel's quarterly results released today. The quarter that ended on September 30, 2017 saw the net profits of country's largest telecom company nosediving to Rs 343 crore, a decline of 76.5 per cent in comaprison to the same quarter in the corresponding year. The consolidated revenues earned by the company during the second quarter of the current fiscal slipped to Rs 21,777 crore, falling 11.7 per cent, a statement by Bharti Airtel said. Bharti Airtel had posted net profit of Rs 1,461 crore for the July-September quarter of last fiscal. The total revenues posted by the telco in the same period amounted to Rs 24,652.
The consolidated revenues for just-ended quarter, at Rs 21,777 crore, represented a year on year drop of 10.4 per cent (reported drop of 11.7 per cent) on an underlying basis (that is adjusted for Africa and Bangladesh divested operating units and tower assets sale), Airtel said in a statement. On the other hand, India revenues posted by the company for the September quarter at Rs 16,728 crore have declined by 13 per cent over the year ago period, led by mobile drop of 16.8 per cent.
Meanwhile, the company's consolidated net debt rose to Rs 91,480 crore as opposed to Rs 87,840 crore as seen in the previous quarter. Net debt excluding the deferred payment liabilities to the Telecom Department and finance lease obligations increased by Rs 2,554 crore sequentially in the quarter, the company added.
Mobile market continues to experience value erosion and financial stress led by competitive pressures, Airtel mentioned in the statement.
"The financial stress in the industry continues due to double digit revenue decline and will be further accentuated by the reduction in IUC rates in the next quarter. This will eventually force operator consolidation and exits as we have witnessed in the recent past," Gopal Vittal, MD and CEO, India and South Asia, Bharti Airtel said in the statement.
Bharti Airtel, along with other incumbent telecommunication service providers, has been engaged in a fierce tariff war with Mukesh Ambani-controlled Reliance Jio. Over the past few quarters, Bharti Airtel has been blaming the "pricing disruption" in the Indian telecom market casued by Jio's freebies for the eating into industry revenues and stress on sector profitability, cash flows and leverage.
The company said it had "stepped up" the capex investments in the quarter on the back of data coverage and capacity.
Bharti Airtel's net interest costs increased to Rs 1,905 crore compared to Rs 1,603 crore in the same quarter last year on account of lower investment income.
"The forex and derivative loss for the quarter was at Rs 422 crore compared to loss of Rs 302 crore in the corresponding quarter last year," it said.
On the day of the quarterly results, the shares of the company closed at Rs 497.65 a piece, after rising by 0.98 per cent over the previous close on BSE.
(With PTI inputs)