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Bharti Airtel turns volatile after Q2 net loss balloons

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Bharti Airtel reported consolidated net loss of Rs 23,044.90 crore in Q2 September 2019 compared with net profit of Rs 118.80 crore in Q2 September 2018.

Shares of Bharti Airtel were up 2.41% at Rs 371.40. The stock traded in the range of Rs 354.40 and Rs 381.25 so far during the day. The stock recovered after sliding as much as 2.27% in early trade.

The stock has fallen 2.43% in two session as it ended at Rs 362.65 in yesterday's session from a recent closing high of Rs 371.70 on 11 November 2019.

Total revenues rose 4.9% to Rs 21,131 crore in Q2 September 2019 from Rs 20,148 in Q2 September 2018. Airtel's revenues from the India business rose 3% while those from the African business were up 12.6% in Q2 September 2019 over Q2 September 2018.

Mobile data traffic on the network grew to 4,661 petabytes (PBs) in the quarter, a growth of 81% Y-o-Y.

The average revenue per user (ARPU) declined to Rs 128 in Q2 September 2019 from Rs 129 in Q1 June 2019.

EBITDA stood at Rs 8,936 crore in Q2 September 2019, up by 40.9% from Rs 6,343 crore in Q2 September 2018. EBITDA margin stood 42.3% on 30 September 2019 as compared to 31.5% on Q2 September 2018.

The consolidated net loss before exceptional items for the quarter stands at Rs 1,123 crore. The consolidated net loss after exceptional items for the quarter stands at Rs 23,045 crore.

On 24 October 2019, the Supreme Court of India delivered a judgement in relation to a long outstanding industry-wide case upholding the view considered by Department of Telecommunications (DoT) in respect of the definition of Adjusted Gross Revenue (AGR) (Court Judgement). This Court Judgement has significant financial implications on the company. The Supreme Court has allowed a period of three months to the affected parties to pay amounts due to DoT. The company is hopeful of relief and in the absence of the same, has provided for an additional amount aggregating Rs 28,450 crore as a charge for the quarter (comprising of principal of Rs 6,164 crore, interest of Rs 12,219 crore, penalty of Rs 3,760 crore, and interest on penalty of Rs 6,307 crore) with respect to the license feeas estimated based on the Court Judgement and spectrum usage charges (SUC) as estimated based on the definition of AGR. These provisions have been made without prejudice to the company's right to contest DoT's demands on facts as well as on rights available in law. Thus the liabilities/provisions as at 30 September 2019 aggregate Rs 34,260crore (comprising of principal of Rs 8,747 crore, interest of Rs 15,446 crore, penalty of Rs 3,760 crore and interest on penalty of Rs 6,307 crore).

Total capex spend for the quarter ended on 30 September 2019 was Rs 3,790 crore. The company's overall customer base stands at 411 million across 16 countries.

In a statement, Gopal Vittal, MD and CEO, India & South Asia, said, "Despite being a seasonally weak quarter, we witnessed positive revenue growth in Q2 on the back of various initiatives aimed at providing superior differential services through our Thanks platform. We continue to witness strong data traffic growth of ~81% Y-o-Y and added ~8 mn 4G customers on our network during the quarter. We remain committed to strengthening our network and providing a superior experience to our customers. On the AGR verdict of the Supreme Court, we continue to engage with the government and are evaluating various options available to us. We are hopeful that the government will take a considerate view in this matter given the fragile state of the industry."

Bharti Airtel is a leading global telecommunications company with operations in 18 countries across Asia and Africa.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, November 15 2019. 09:50 IST