Airtel Africa net profit down 12% on year

2 August 2019

Mergers, Acquisitions and Financial Results

New Delhi: Bharti Airtel’s Africa unit posted a 12% drop on-year in net profit to reach $125 million for the quarter ended June 2019 on-year, on revenue of $796 million on constant currency terms. This was the company's first quarter results after going public.

The Africa unit, which listed on the London Stock Exchange and raised about $750 million by offloading 25% stake, said its revenue growth of 10.2% in constant currency was driven by double-digit growth in Nigeria and East Africa, partially offset by a decline in revenue in Rest of Africa.

"I am pleased to report a strong start to the financial year, in our first quarterly results since the IPO. These results, which are in line with our expectations, are clear evidence of the effectiveness of our strategy across voice, data and mobile money. Voice revenue, our largest business product, was up 3% largely driven by 9% growth in our customer base, now reaching nearly 100 million customers across our footprint,” said Raghunath Mandava, Chief Executive Officer of Airtel Africa.

“We continued to invest in our 4G network, adding nearly 1,500 sites; now more than half of our sites are 4G. We also continue to prepare for the launch of our Mobile Money business in Nigeria, securing approval of the brand name, an important step as we await approval for our payment service bank license,” he added.

Airtel Africa’s data revenue was up 36% to $207.1 million and was the largest contributor to growth owing to an increasing number of customers taking to high-speed LTE services, resulting in a 79% growth in data usage. Data average revenue per user (Arpu) rose to 2.3$ up 17% in constant currency terms for the June ended quarter.

Voice revenue in constant currency grew by 3.2% to $469.9 million largely driven by customer growth driven by stable churn and expansion of distribution infrastructure. Voice Apru however declined by 5.8% on-year to $1.6 in the quarter due to weakness in Rest of Africa and decrease in interconnect rates across key markets, especially in East Africa which more than offset ARPU growth in Nigeria.

The company termed the revenue generated from mobile money revenue as its fastest growing business, which increased by 42% to $67.6 million on the back of expanded distribution reach.

Amid the growth factors, the company’s free cash flow fell to $ 102.4 million in the quarter, by 29.2% on-year, as a result of increased capex for network modernization and rollout of additional sites.

Source: The Econimic Times