Profits fall 27% as expenses rise

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The profits of Bharti Airtel Ltd. in the third quarter fell, due to lack of estimates, while financial charges and expenses increased.

The telecom operator’s net profit fell 26.8% sequentially to Rs 829.6 crore in the three months to December, according to its trading filing. This compares to the consensus estimate of Rs 1,021.2 crore from analysts tracked by Bloomberg.

The billionaire Sunil Mittal-led carrier’s revenue increased by 5.4% from the previous quarter to Rs 29,866.6 crore, against the forecast of Rs 29,370.3 crore. Other income jumped 81.2% to Rs 197.1 crore.

FY22 Third Quarter Highlights (QoQ)

  • Operating profit increased by 6.3% to Rs 14,905 crore.

  • The margin was 49.9% against 49.5%.

  • Total expenditure increased by 4.5% to Rs 15,163.8 crore. This includes network operating expenses, access fees, license fees and marketing expenses.

  • Finance charges increased by 10.2% to Rs 4,367.1 crore.

  • The average revenue per user – the amount an operator earns per subscriber per month – has risen from 153 rupees to 163 rupees.

Rate increases in the quarter supported revenue, along with 4G additions and a drop in low-cost subscribers. The full impact of the rate increases, however, will be visible in the fourth quarter ending in March.

The carrier’s customer base stood at 35.6 crore in December 2021. It gained 10 lakh wireless subscribers in the third quarter. The 4G subscriber base grew 1.6% QoQ to 19.55 crore. Bharti Airtel has maintained an active subscriber market share of over 34% since January 2021, according to the latest TRAI data.

Airtel Africa recorded revenue and profit after tax of $1.22 billion (Rs 9,142 crore) and $180 million (Rs 1,350 crore) in the quarter ended December. Its revenue increased 5.1% sequentially, but its net income fell 6.3% due to higher finance charges.

Africa revenues were supported by growth in all regions (Nigeria, East Africa and Francophone Africa) and services (voice, data and mobile money activities).

Shares of Bharti Airtel closed down 1.42% ahead of the earnings release, versus a 0.31% gain in the benchmark Nifty 50 index.

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