Bharti Infratel, the telecom tower arm of Bharti Airtel, on Thursday reported a 24 per cent year-on-year decline in its consolidated net profit at Rs 733 crore for the second quarter ended September 30, 2020, as against Rs 964 crore in the year ago period. In the earnings release, the company also announced the closure of its long-pending merger deal with Indus Towers.
The consolidated revenue for the quarter was Rs 3,695 crore as compared to Rs 3,638 crore in the year ago period, registering a year-on-year growth of 2 per cent.
Consolidated Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) was down 3 per cent at Rs 1,836 crore from Rs 1,885 crore in Q2 FY20.
While the operating free cash flow was down 4 per cent YoY at Rs 1,035 crore, return on equity pre-tax and post-tax decreased to 29.1 per cent and 21.8 per cent as against 32.6 per cent and 28.1 per cent, respectively, on YoY basis. The return on capital employed pre tax was 23 per cent against 25.7 per cent in the year ago period.
On development relating to merger of Indus Tower and Bharti Infratel, the company said that National Company Law Tribunal (NCLT) has given its approval to the deal which has been in process for a long time.
"The filing with Registrar of Companies (ROC) post final closing based on agreed closing adjustments is likely to be done within 30 days. To facilitate integration and to ensure continuity, the Board of Directors of Infratel today appointed Bimal Dayal, the current MD & CEO of Indus Towers and the proposed CEO of the merged entity by the Shareholder Groups (Bharti Airtel and Vodafone Plc) as the MD of Bharti Infratel with immediate effect," said Akhil Gupta,Chairman, Bharti Infratel.
Indus Towers is a joint venture between Bharti Infratel, UK-based Vodafone Group Plc and Vodafone Idea. Bharti Infratel and Vodafone Group hold 42 per cent stake each in Indus. Vodafone Idea holds 11.15 per cent stake and the remaining 4.85 per cent is with private equity firm, Providence. Airtel has a majority stake in Bharti Infratel.
During the July-September quarter, Infratel added 1,482 towers and 2,116 co-locations, registering a sequential growth of 2.4 per cent in sharing revenue per tower per month. As of September 30, 2020, the company had consolidated portfolio of 97,283 telecom towers, which includes over 43,000 of its own towers and the balance from its 42 per cent equity interest in Indus Towers, makes it one of the largest tower infrastructure providers in the country with presence in all 22 telecom circles.
"During the quarter, we have witnessed the highest net tower additions in the last eight years and the highest net co-location additions in the last three years," Gupta said.
Ahead of Q2 results, shares of Bharti Infratel closed Thursday's trade at Rs 196.05, up 1.84 per cent against the previous close of Rs 192.50 on the BSE.