Unlike rival Vodafone Idea, Indian operator Bharti Airtel seems to have overcome any doubts about its ability to continue operating in the face of the Supreme Court’s verdict on adjusted gross revenue (AGR) dues.
Based on information in the December quarter earnings report of its Africa division, Airtel Africa, the Indian press is reporting that the recent successful attempt to raise $3 billion from share sales and an overseas issue of convertible bonds has reduced the level of uncertainty about Airtel’s ability to comply with the Supreme Court’s verdict on AGR dues.
In fact “the Group has adequate committed and non-committed facilities to operate as a going concern”, as the Airtel Africa earnings report puts it.
As reported earlier, the payment deadline for the AGR dues has passed, but seems now to have been put on hold ahead of another, imminent Supreme Court hearing relating to a modification petition designed to give operators more time to make the payments.
This is something of a turnaround for Airtel given large losses posted for July-September after provisioning for AGR dues. However, despite this good news, and even though it remains profitable, Bharti’s Africa unit reportedly experienced a 27 per cent on-year fall in net profit to $90 million for the quarter-year to the end of December.
This may have been partly due to taxes and higher net finance and depreciation & amortisation costs rather than any trading issues. In fact the company insists that customer adds, data consumption and its Airtel Money platform are all going well, led by the high-performing Nigerian and East African markets.