Bharti experiences profit loss after African takeover
06 May 2011 |
Bharti airtel’s annual report shows a profit loss of 32.6% with the company’s takeover of Zain’s African operations taking the blame.
The acquisition last June is being held responsible for profits dropping to $1.35 billion despite it also causing revenue to increase by 42.1% to $13.28 billion.
The Indian telco’s African operations saw losses of $319.5 million for the year having bought them from Zain for $10.7 billion. For the final quarter of the year, these operations made a combined loss of $92.44 million but were an improvement on the $117.23 million loss from the previous quarter.
The company reported a number of factors that contributed to its profit loss including, foreign exchange losses, increased spectrum charges and the cost of rebranding the company to airtel.
Bharti saw EBITDA margins fall by 6.5% to 33.6% which was caused by the lower margins of their African business and the competitive pricing that is continuing to put pressure on operators in the Indian market.
The report also showed that the company had added 13.1 million customers over the final quarter contributing to 83.9 million additions over the entire year. This gave them a total of 220.9 million customers at the close of the year.
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