BHARTIARTL — earnings call

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Prepared remarks

PRESENTATION · Deepti - Moderator

Deepti - Moderator Good afternoon, ladies and gentlemen.

I am Deepti, the moderator for this webinar.

Welcome to the Bharti Airtel Limited’s first quarter ended June 30, 2023 Earnings Webinar.

Present with us today is the senior leadership team of Bharti Airtel Limited.

I must remind you that the overview and discussions today may include certain forward-looking statements that must be viewed in conjunction with the risks that we face.

Post the management opening remarks, we will open up for an interactive Q&A session.

Interested participants may click on “Raise Hand Option” on their zoom application to join the Q&A queue.

Participants may click this option during the management opening remarks itself to ensure that they find a place in the queue.

Upon announcement of name, participants to kindly click on “Unmute Myself” in the pop up on screen and start asking their question post introduction.

With this, I would now like to hand over to Mr. Gopal Vittal for the opening remarks.

Gopal Vittal - Managing Director & Chief Executive Officer, Bharti Airtel Limited Thank you very much, and a very warm welcome for our earnings call for the quarter ended June 2023.

With me on the call, are Soumen, Harjeet Kohli, Naval and Sunil Taldar.

Let me start by giving a quick update on our business and I want to start with ESG.

During the quarter we were recognized by the Economic Times as well as Business World for our sustainability practices and leading the charter in India.

Let me give you a few examples on the progress we have made especially on our green agenda.

Nxtra now utilizes renewable energy for 41% of data center energy needs; that is a big jump from 32% a year ago, 43% of our Network sites are now green sites.

These sites consume less than 100 liters of diesel in a quarter versus 420 liters on average for other sites.

The rural site expansion we have undertaken is leveraging green energy for 35% to 40% of the requirement.

Such initiatives have helped us reduce our diesel emissions in the network by almost 48% per terabyte of data, and this is over the last two years.

In addition, we continue to double down on our agenda to drive diversity in the workforce as well as make Airtel a safe and secure workplace.

Let me turn to our financial performance.

We delivered a strong competitive performance this quarter.

Consolidated revenues grew by 4% sequentially to a shade under Rs 37500 Crores to Rs 37440 Crores precisely, powered by a strong India performance.

India revenues grew by 4.5% sequentially to Rs 26675 Crores, EBITDA margins are at 52.7%.

This is an expansion of 0.5% from the last quarter, aided by the continued momentum on the war on waste program.

Let me talk a little bit on this program.

This quarter we really focused on our network costs.

Our network cost takeout program has been delivering a very strong outcome, network opex for India declined by 0.5%, despite our rollouts.

So in effect for the first time in the history of the company, the operating cost per site, per month was actually lower than what it was in prior quarters, and this was done through a combination of identifying very high cost sites I had referred to this a quarter ago, that we have identified over 50,000 sites that are more than a lakh per month in terms of network opex per site.

Our teams have visited every one of these sites, we put in place solutions that include either solar solutions or better batteries, sometimes reconfiguring the site, rental negotiations, or indeed even relocating the site, and this is really what has helped us take this cost to set a new baseline on the network opex per site.

The company generated operating free cash flows of Rs 4827 Crores for India, despite the elevated capex.

Our capex as I have highlighted earlier as well, continues to be front loaded at about Rs 9300 Crores for the quarter.

So while the full year capex is more or less in line with the Rs 28,000 to Rs 31,000 Crore guidance that we have given for the year, you must also remember what this capex is for.

It is really for future proofing Airtel, 5G radio rollout, transport infrastructure, broadband rollout, and data centers.

Each of these is a massive opportunity for future growth.

At the same time despite the elevated capex, our net debt to EBITDA for India is Final Transcript