Increased customer base and forex gains drive profitability
n Bharti Airtel’s (Bharti) subscriber base increased substantially from 97 mn in FY09 to 131 mn in FY10. This rise catapulted the company’s revenues 11.9% to INR 418.3 bn in FY10 (FY09: INR 373.5 bn) despite 20.8% dip in ARPU on back of stiff tariff war in the sector.
n PBT margin improved from 21.1% in FY09 to 24.6% in FY10, primarily on account of foreign exchange gain of INR 7.9 bn (FY09: loss INR 17.9 bn). Excluding forex impact, the company’s PBT margin dipped from 25.8% in FY09 to 22.8% in FY10 primarily on account of increase in network operating expenditure and new business ventures, currently under gestation period, making losses.
n Bharti’s network operation expenditure increased significantly from INR 62.5 bn in FY09 to INR 89.1 bn in FY10 (from 16.7% of sales to 21.3%) which was partially offset by decrease in access charges from INR 52.9 bn in FY09 to INR 44.8 bn in FY10 (from 14.2% in FY09 to 10.7% in FY10).
n During the year, provision for doubtful debts increased to INR 12.5 bn (28.1% of debtors) from INR 9.8 bn in FY09 (25.3% of debtors).
n Bharti provided INR 277.9 mn (FY09: INR 60.6 mn) in FY10 towards dimunition in the value of inventory which is 36.5% of inventory (FY09: 5.9%).
n Auditors have highlighted that funds amounting to INR 6.5 bn raised on short-term basis (primarily represented by capital creditors) have been used for long-term investments (primarily represented by fixed assets).
n During FY10, the company had revised estimates for assets retirement obligations (ARO) and consequently, reversed provision of INR 5.8 bn with corresponding reversal from fixed assets. The change in estimate led to INR 269.6 mn increase in PBT.
Segmental analysis
n Mobile services segment continued to be the highest revenue and segmental EBIT contributor. However, EBIT margins were the highest and continued to grow in the enterprise services segment.
n Revenue share from passive infrastructure segment increased from 3.4% in FY09 to 8.4% in FY10.
Other highlights
n In FY10, Bharti Infratel converted interest free unsecured convertible debentures of INR 32.0 bn into 40.3 mn equity shares at an average price of INR 793.9. Consequently, Bharti’s stake in Bharti Infratel dipped from 92.5% to 86.1%. The imputed valuation for Bharti Infratel on this basis stands at INR 461.2 bn.
n The company acquired 55% stake in Bharti Telemedia for INR 73.8 mn from Bharti Enterprises. This led to its stake in Bharti Telemedia increasing to 95%. Also, the company extended an INR 14.9 bn (FY09: INR 6.4 bn) interest free loan to Bharti Telemedia.
n As at FY10 end, accumulated losses of a few subsidiaries including Bharti Telemedia, Bharti Airtel Lanka, etc., exceed the networth of respective companies.
n During the year, the company remitted USD 311.5 mn (INR 14.1 bn) to its subsidiary Bharti Airtel Holdings (Singapore) for acquisition of 70% stake in Warid Telecom, Bangladesh.
No comments:
Post a Comment