Bharti Airtel posts staggering Rs 23,045 crore net loss in Q2 after AGR provisioning

Telecom operator Bharti Airtel on Thursday submitted a shocking Rs 23,045 crore net loss for its second quarter ended September 30, because of provisioning of Rs 28,450 crore in the wake of the Supreme Court judgment on statutory dues.

The Sunil Mittal-led firm said the apex court decision -- that had declared government's method of calculating earnings of telcos (where statutory obligations like license fee and spectrum utilization fees are calculated ) -- has"major financial implication for your firm".

Last month, Bharti Airtel had stalled the launch of its entire Q2 earnings to November mentioning the uncertainty in the industry in the aftermath of the court judgment on the definition of telecom revenues.

Airtel's massive net loss for just-ended September quarter has been due to outstanding cost pertaining to provisioning of Rs 28,450 crore towards the AGR dues, which comprised principle of Rs 6,164 crore, interest of Rs 12,219 crore, penalty of Rs 3,760 croreinterest penalty of Rs 6,307 crore.

The organization had recorded net profit of Rs 119 crore in precisely the exact same quarter previous year, even though it stated that year-on-year numbers weren't comparable because of adoption of new accounting standard.

Airtel CEO, India and South Asia, Gopal Vittal expected that the authorities is going to have a thoughtful view about the adjusted gross revenue (AGR) matter granted the"delicate state of this sector".

"About the AGR conclusion of the Supreme Courtwe continue to participate with the authorities and are assessing a variety of alternatives available to people," he explained.

The combined revenue of Bharti Airtel was up by 4.7 percent at Rs 21,199 crore from the just-ended quarter. India earnings were up 3 percent year-on-year (5.7 percent on an underlying basis), while Africa revenues rose 12.6 percent over precisely the exact same period previous year.

"India earnings for Q2 at Rs 15,361 crore have risen by 5.7 percent year on year (reported growth of 3 percent ) in an underlying foundation. Mobile earnings have seen a year-on-year development of 7.1," it added.

Consolidated earnings before interest, taxation, depreciation and amortisation (EBITDA) arrived at Rs 8,936 crore from the Q2 FY2020 from Rs 6,343 crore in the year ago period.

Even the Supreme Court, last month, had declared the government's position on adding earnings from non-telecommunication companies in calculating the yearly AGR of telecom businesses, a share of that is compensated as license and spectrum fee into the exchequer. Old telecom operators Bharti Airtel and Vodafone Idea were assumed to select the maximum hit the payment of statutory dues to the authorities.

According to latest estimates by the telecom division, Bharti Airtel confronts a liability of approximately Rs 62,187 crore (including talk of Tata Group of companies along with Telenor India), whereas Vodafone Idea might need to pay about Rs 54,184 crore. The rest of the liability is with state-owned BSNL/MTNL and a number of those shut/bankrupt telecom businesses.

The Supreme Court has permitted three weeks into the impacted telcos to cover sums due to the DoT, and on Wednesday the authorities shot off note to telecom operators to cover their earnings share dues over the timelines given by the court. The section has given choice to telecom operators to manually clean all of the dues on self-assessment foundation.

"Being a seasonally weak quarter, we seen positive earnings growth in Q2 on the rear of various initiatives directed at supplying superior metering providers through our'Due' platform. We continue to see strong data traffic expansion of approximately 81 percent year-on-year and added approximately 8 million 4G clients on our network throughout the quarter," Vittal said.

Bharti Airtel stocks closed at Rs 362.65 apiecedown by 1.59 percent compared to previous near the BSE.

Bharti Airtel posts staggering Rs 23,045 crore net loss in Q2 after AGR provisioning Bharti Airtel posts staggering Rs 23,045 crore net loss in Q2 after AGR
provisioning Reviewed by Techno Sick on November 14, 2019 Rating: 5
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