Bharti Airtel (BHARTIARTL) Q4 16/17 earnings summary

Executive summary

• FY17 consolidated revenue declined 1.1% YoY to ₹954,683 Mn, while EBITDA rose 4.3% to ₹356,206 Mn and EBITDA margin expanded to 37.3%.

• Net income was ₹37,998 Mn versus ₹60,767 Mn; India market disruption pressured results, while Africa turned PBT-positive for the first time.

• Priorities included defending market share, controlling costs, expanding data capacity and building adjacent businesses; 2017-18 was expected to remain competitive and turbulent.

Financial highlights

• Consolidated revenue ₹954,683 Mn versus ₹965,321 Mn; reported decline 1.1% YoY, with underlying growth of 1.1%.

• EBITDA before exceptional items increased 4.3% to ₹356,206 Mn; operating expenditure, excluding access charges, cost of goods sold, license fees and CSR, fell 3.5% to ₹399,731 Mn.

• Net income before exceptional items was ₹38,134 Mn versus ₹47,991 Mn; exceptional items had a net impact of ₹139 Mn, leaving reported net income at ₹37,998 Mn.

• Consolidated operating free cash flow rose 16.0% to ₹157,461 Mn; FY17 capex was ₹198,745 Mn, versus ₹205,919 Mn in FY16.

Outlook and guidance

• India management expected continued consolidation and disruption from the new entrant, while viewing the market reset as an opportunity to gain share; rapid digitisation and adjacent services were key growth drivers.

• Africa management expected growth in subscribers and revenue in FY18, supported by distribution, customer experience, network quality, cost discipline and people development.

• India’s mobile broadband users were projected to reach 500–600 Mn by 2020; data growth, digital payments and mobile banking were identified as long-term opportunities.