Airtel Africa reports $57 mn profit, falling 53% in constant currency terms

Indian company's revenue grew in constant currency terms across all key business segments

Airtel Africa on Friday reported net profit of $57 million for the June 2020 quarter, aided largely by higher data consumption and mobile wallet usage.

However, net profit slumped 53.6 per cent in constant currency (CC) terms, compared to $132 million reported for the June 2019 quarter.

The decline was driven by a one-off gain of $72 million related to the expired indemnity to certain pre-IPO investors for the same period last year, as well as higher finance costs and tax outgo. 

Reporting figures in CC terms eliminates the impact of exchange rate fluctuation on a firm’s financial statements.

Net debt for the African arm of Bharti Airtel stood at $3.4 billion, down $656 million from $4.1 billion in June 2019, thanks to an inflow of $680 million from the IPO proceeds and $122 million from the cancellation of derivatives — partially offset by interim dividend payment of $113 million — according to Airtel Africa’s financial statements.

Revenue saw an uptick in CC terms across all key segments. Voice revenue rose 2.2 per cent, data by 35.7 per cent, and mobile money by 26.3 per cent. Overall, revenues rose 7 per cent to $851 million, compared to $796 million in the June 2019 quarter — a 13 per cent rise in CC terms.

Raghunath Mandava, CEO of Airtel Africa, said the “outlook remains uncertain”, particularly with respect to the “so-called potential second wave of infections and the actions governments will take in that event”.

Airtel Africa has presence in 14 countries, primarily in eastern, central and western Africa.

“In these unprecedented times, we have worked with governments, regulators, partners, and suppliers to keep customers and businesses connected. We focused on expanding and maintaining our network to ensure it could cope with the increasing demand, kept our distribution up and running by increasing penetration of digital recharge and stock levels, and expanded our home broadband solutions to ensure customers could work and access entertainment remotely,” said Mandava.