Bharti Airtel Q1 net falls 28 %, eaten away by interest cost, taxes
05 August 2011
Impacted by an array of factors, ranging from rise in interest costs, higher taxes and tariff war in the country, Bharti Airtel's posted a 28 per cent slump in net profit for April-June quarter.
During the quarter, the GSM operator's net profit fell 28 per cent to Rs1,215 crore, compared with Rs1,682 crore recorded during the same period a year ago. Its total revenues rose 38.6 per cent to Rs 16,974.9 crore from Rs12,244 crore a year ago, the firm said in a statement.
The New Delhi-based firm's first quarter net profit was impacted by losses of recent acquisitions in Africa, costs related to its Indian 3G network, rising interest costs, higher tax payout and a prevailing price war in the country.
In a comparison, rival GSM service provider Idea Cellular reported a 12 per cent decline in consolidated net profit at Rs177.26 crore for the first quarter ended 30 June 2011. The Aditya Birla group firm's net profit was hurt by amortisation of 3G spectrum fee and interest costs following 3G services launch. (See: Idea Cellular first quarter net dips 12 %)
"On a year on year basis the income before taxes dropped mainly on account of higher interest outgo (Rs344 crore) caused by the Africa acquisition and 3G investments in India, and 3G license fee amortisation (of Rs159 crore)," Bharti Airtel said.
The firm's interest costs and finance charges rose as it started to amortise loans taken to acquire third-generation (3G) licences and broadband wireless access spectrum (BWA) last year.