Airtel’s Q4 profit dragged down 31% on forex losses

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NEW DELHI : Nigeria’s decision in February to devalue its currency for the second time in eight months as part of what are seen as market-friendly reforms have ended up severely hurting Bharti Airtel Ltd. Factoring out its African operations, however, India’s second-largest telecom services provider rang in improved financials for the March quarter, as it added nearly 8 million new subscribers while reducing customer churn. Bharti Airtel reported foreign exchange losses of ₹2,544 crore from its African subsidiary, which contributed to dragging down its fourth-quarter consolidated profit by 31% to ₹2071.6 crore.

Consolidated revenue grew 4.4% to ₹37,599 crore. “Consolidated performance was impacted primarily by the devaluation of the Nigerian naira," Bharti Airtel managing director Gopal Vittal said, announcing the quarterly results after market hours on Tuesday. The shares ended the day’s trading on NSE nearly unchanged at ₹1,287.05 each.

The devaluation of the naira due to policy changes in Nigeria resulted in derivative and forex losses of $770 million in the 2023-24 financial year, Airtel said. The telecom carrier has classified the losses as exceptional. Apart from the net forex loss, Airtel was also charged ₹90 crore as indemnity liabilities for past transactions.

But it gained from the reversal of a provision amounting to ₹179 crore after the Supreme Court in February ruled against the demand of tax deducted at source (TDS) for selling prepaid SIM cards or recharge vouchers to distributors at discounted rates. The net tax benefit added up to ₹822.6 crore, while the net charge allocated to non-controlling interest was ₹752.5 crore. Also read | Why foreign investors ploughed into India's telecom stocks On a