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Bharti Airtel FY13 profit drops by half, misses expectations

The Indian telco reports its smallest annual profit in seven years, but is optimistic over price stability returning to the sector which will allow it to improve margins.
Written by Mahesh Sharma, Correspondent
India's biggest telco, Bharti Airtel, has posted a 50 percent drop in its annual net profit at US$414 million (22.76 billion rupees).
In a statement released Thursday, Bharti Airtel said revenues were US$14.9 billion (803.11 billion rupees) for the year ending March 31, 2013. This was 12.4 percent higher than the previous financial year. The lower net income was primarily impacted by faster depreciation of assets, net interest costs, and also a higher deferred tax charge.
The huge profit drop and modest revenue growth also played out over the final quarter, when the company reported a 50 percent decline in profits to US$94 million (5.09 billion rupees). This fell short of the 7.41 billion rupees quarterly revenue predicted by analysts polled by Thomson Reuters. The newswire also noted the annual profit was the telco's smallest in seven years.
Annual operating free cashflows rose 11.9 percent to US$2.09 billion (113.34 billion rupees). This was despite cashflow in the fourth quarter declining by 23.1 percent compared to the corresponding period the previous year.
As at March 31, Airtel had 259.8 million mobile customers, a 7.8 percent growth over the year. This was largely driven by almost 20 percent growth in the number of African subscribers, which number 63.7 million.
In a statement, Bharti Airtel chairman Sunil Bharti Mittal said quarter-on-quarter growth was consistent across all geographies. "I am pleased to see that market corrections have started with improvements in the quality of customer acquisitions, and that pricing stability is returning to the sector in India.
"With Africa over its peak of organic investments we are optimistic about the potential for improved market shares and margin expansions," he said.
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