Bharti Airtel post net loss in Q4

India’s largest listed telecom services provider Bharti Airtel reported a net loss of Rs 5,237 crore in the quarter ended March, compared with a profit of Rs 107.2 crore a year ago.
Exceptional loss of Rs 7,004 crore due to reassessment of regulatory cost related to spectrum charges
Sunil Bharti Mittal led company took a hit due to an exceptional item of Rs 7,004 crore in the quarter, which comprises mainly of a charge on account of reassessment of regulatory cost based on a recent judgment on one-time spectrum charge (OTSC) related matter.

However, its consolidated revenue for the quarter witnessed a growth of 15.1% on year (YoY) on reported basis to Rs 23,723 crore.
Its consolidated EBITDA increased by 51.7% YoY to Rs 10,326 crore in the March quarter. This led to an improvement in EBITDA margin of 10.5 percentage points YoY to 43.5%.
India revenues for the quarter came in at Rs 17,438 crore, and have increased by 14.4% YoY on a reported basis.
Mobile revenues have witnessed a YoY growth of 21.8%, primarily led by increase in the 4G customer base coupled with improved tariffs.

The telcos average revenue per user (ARPU) for the quarter came in at Rs 154 as compared to Rs 123 a year ago.
Total minutes of usage on the network during the quarter were 902 billion, representing a growth of 13.3% as compared to 796 billion in the corresponding quarter last year.
Mobile Data traffic grew 74.3% to 6,688 billion MBs during the quarter, as compared to 3,836 billion MBs in the corresponding quarter last year.

Bharti Airtel’s consolidated net debt, excluding lease obligations for the company, stood at Rs 88,251 crore as on March 31, down 18.5% from Rs 108,235 crore a year ago.
The company recommended a dividend of Rs 2 per share, in line its policy of passing through dividends received from Bharti Infratel.

As on March 31, Bharti Airtel’s customer base stands increased by 4.9% to 423 million customers from 404 million in the corresponding quarter last year.
Capex increased QoQ: During Q4, capex was of Rs 70 bn for India mobile vs. Rs 25.4 bn in Q3 for India mobile.
On a consolidated basis it generated negative operating free cash flow of Rs 10.1 bn in Q4FY20 (vs. Rs 41.7 bn in Q3FY20) due to high capex of Rs 113.4 bn (Rs 51.3 bn in Q3).

Reported mobile subscriber base was 283.7 mn (vs. 283 mn in Q3), addition of 0.63 mn customers vs. 3.6 mn added in Q3. Data subscriber base was at 148.6 mn (vs. 138.4 mn in Q3 +7.3%QoQ; +29.0%YoY), with moderation in addition rate (10.2 mn vs. 14.2 mn in Q3). RJio had added 17.5 mn net subscribers in Q4.
For India Mobile business voice and data usage improve further: Voice traffic improved by 8.3% QoQ (+12.4%YoY) to 821.9 bn minutes. Data traffic grew 16.3% QoQ (+74.2% YoY) to 6,452 bn MB. Voice/data traffic was up +7.2%QoQ/+6.3%QoQ for RJio.

Also data per user was above RJio: Data Usage per customer was 14.6 GB (7.5% QoQ) vs. 13.6 GB per month for Q3 (11.3 GB/ month for RJio in Q4).
For 4G addition rate remains strong 4G data subscriber base was at 136.3 mn (vs. 123.8 mn in Q3; +10.1%QoQ; +57%YoY) as company continues to shutdown 3G network. 4G addition rate remains strong (+12.5 mn vs. +20.7 mn /+7.9 mn in Q3/Q2).

Enterprise Business revenue up by 1.8% QoQ (+12.4%YoY) while EBITDA margin expanded by 334 bps QoQ to 39.9%
Homes revenue was up 3.2% QoQ (+3.4%YoY) to Rs 5.7 bn due to ARPU improving by 2%QoQ to Rs803 with subscriber improving by 2.7%QoQ at 2.41mn. Margin compression of 693 bps QoQ to 52.6%.
DTH revenue were down 23.8% QoQ (-42.6%YoY) to Rs 6.0 bn with ARPU decline of 24.3% QoQ and subscriber growing by 1.9%QoQ (net addition of 30.5k in Q4 vs. 10k in Q3). Margin erosion of 823bps QoQ to 60.5%.
Passive Infra revenue up 1.0% QoQ (+0.7%YoY) to Rs 16.8 bn with margin expansion of 97 bps QoQ to 53.7%.
Net net Bharti Airtel starts on a clean slate as it has provided for the entire AGR writeoff hence going ahead there are unlikely to be any big exceptional hits to the bottomlime expected. Additionally with debt being reduced, ARPUs going up and more data being consumed in the present lock down will ensure that growth continues to remain solid in the medium ahead.

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