Airtel Africa reports fall of 21% in net profit at $65 mn for March qtr

Airtel Africa on Wednesday reported a 21% decline in its net profit at $65 million for the quarter ended March 31. This was against $82 million in the corresponding period, last fiscal, mainly on account of higher finance costs.

While Airtel Africa’s total expenses climbed 11% year-on-year to $658 million due to sharply higher network operating costs, access charges, sales & marketing expenses and bigger payouts towards licence fees/SUC, depreciation & amortizations costs rose marginally by 1%.

The African arm of Bharti Airtel reported 15% on-year rise in revenue and 1.81 % sequentially to $899 million, driven by strong contributions from the voice, data and mobile money verticals.

“These results demonstrate the strength and resilience of our business and the effectiveness of our strategy – with all three business services, voice, data and mobile money, contributing to revenue growth,” Airtel Africa CEO Raghunath Mandava, said in a media statement.

 

However he added that the coronavirus had some impact on Airtel Africa numbers.

More recently, the markets where we operate have begun to be impacted by the Covid-19 and the related actions that governments have implemented to reduce the risk of contagion. Our priority has been to keep our colleagues, suppliers and customers safe whilst supporting the communities in which we operate, Mandava said.

Net finance costs increased by $ 18 million driven by higher other finance costs which more than offset reduced interest costs of $ 64 million as a result of lower debt. The increase in other finance costs was primarily driven by higher impact of devaluation on foreign exchange denominated liabilities.

Airtel Africa’s data revenue jumped nearly 39% on-year, resulting in over 56% growth in data usage, while mobile money revenue increased 29.5%, driven by customer growth and stronger distribution infrastructure.

Airtel Money customer base rose 28.7% on-year to 18.29 million, boosting total transaction value on its mobile money platform by over 33% on-year to $8.62 billion.

 

Airtel Africa’s average revenue per user – a key performance metric – was virtually unchanged sequentially though up 6.4% year-on-year to $2.8. Voice ARPU fell 2.2% on-year to $1.6 but was virtually unchanged sequentially.

These results also demonstrate the strength and resilience of our business and the effectiveness of our strategy – with all three business services, voice, data and mobile money, contributing to revenue growth. We have also continued to invest in future growth opportunities as we expanded our distribution, modernised and expanded our network with 65% of sites now on 4G, acquired new spectrum in Nigeria, Tanzania, Malawi and Chad, and entered into strategic partnerships in our mobile money business, Mandava said.

Key highlights

• Customer base up by 11.9% to 110.6 million
• Revenue increased by 11.2% to $3,422m, with Q4 revenue growth up 15.1%
• Revenue in constant currency grew by 13.8% in the full year and 17.9% in Q4. Growth recorded across all businesssegments, with voice revenue up by 5.2%, data by 39% and mobile money by 37.2%
• Underlying EBITDA up 13.8% to $1,515m, with underlying EBITDA growth in constant currency at 16.3%
• Reported underlying EBITDA margin improved to 44.3% by 100 bps(up 94 bpsin constant currency)
• Operating profit grew by 22.8% to $901m and increased by 25.4% in constant currency
• Free cash flow was $453m, more than double compared to the same period last year
• Earnings per share (EPS) before exceptional items was $7.3 cents and basic EPS was $10.3 cents, a decrease of $9.2 cents
• Net debt to underlying EBITDA was 2.1x, compared to 3.0x in March 2019
• The Board recommended a final dividend of $3 cents per share, to a total dividend of $6 cents per share