Bharti Airtel on Tuesday missed street estimates when it reported a 37.50 per cent decline in net profits (attributable to owners) for the quarter ended September 30, 2023.
The country’s second largest telco posted a consolidated net profit of Rs 1,340.7 crore compared with Rs 2,145.2 crore in the corresponding quarter of the previous year. A Bloomberg consensus estimate had pegged the net profit at Rs 3,250.2 crore.
The company said net profit fell as it had to make a tax provision of Rs 226.3 crore. The Supreme Court ruled that the licence fee paid at regular intervals should be classified as capital expenditure, leading to the provision.
``On October 16, 2023, the Supreme Court of India pronounced a judgement regarding the tax treatment of adjusted revenue linked Variable Licence Fee (VLF) payable to DoT since July 1999 and held that it is capital in nature and not revenue expenditure for the purpose of computation of taxable income,” Airtel said.
“This decision does not alter the total amount of VLF allowed as deduction over the licence period but creates a timing difference wherein later years would have a higher deduction. This has resulted in an additional tax provision of Rs 226.3 crore primarily due to change in effective tax rate on account of adoption of new tax regime.’’
An interest charge of Rs 1,350 crore on this has shown as an exceptional item.
The quarter saw its consolidated revenues rising to Rs 37,043.8 crore against Rs 34,526.8 crore in the year-ago period, a rise of 7.28 per cent which was also below analyst estimates of a nearly 10 per cent growth.
Revenues from Indian operations showed a rise of 11 per cent at Rs 26,994.7 crore compared with Rs 24,333.3 crore in the same period of the previous year.
EBITDA (earnings before interest, taxes, depreciation & amortisation) rose 16 per cent to Rs 14,561.2 crore.
The company had 342.3 million customers as on September 30, 2023, compared with 327.8 million in the corresponding quarter last year, an increase of 4.4 per cent.
Overall average revenue per user (ARPU) for the quarter was Rs 203 compared with Rs 200 in the preceding three months, a rise of 1.5 per cent.
Bharti Airtel disclosed that during the quarter, it incurred a capex of Rs 5,685.6 crore and it continued to accelerate site deployment and enhance coverage.
During the quarter, it added over 11,000 new towers.
Consolidated net debt excluding lease obligations stood at Rs 1,474,59.3 crore against Rs 1,572,77.6 crore as on September 30, 2022.
“This has been yet another quarter of solid revenue growth and improved margins. Our India revenue continues to gain momentum and grew sequentially by 2.4 per cent. Our consolidated revenue was impacted by the devaluation of the Nigerian Naira,” MD Gopal Vittal said.
