Airtel Africa Q2 profit drops 18.4% to $133 m | The Financial Express

Airtel Africa Q2 profit drops 18.4% to $133 m

While the net profit fell, the company’s revenue from operation rose 4% QoQ to $1.31 billion in the September quarter largely due to increase in consumer base.

Airtel Africa Q2 profit drops 18.4% to $133 m
During the quarter, the company added 3.1 million subscribers, taking its total base to 134.7 million, higher than 131.6 million in the preceding quarter. (IE)

Bharti Airtel-owned Airtel Africa’s net profit attributable to owners fell 18.4% quarter-on-quarter to $133 million in the September quarter owing to an increase in finance costs driven by higher foreign exchange and derivative losses. Since the company operates in 14 countries within Africa, the depreciation of currencies against the dollar has a negative impact on its operations.

While the net profit fell, the company’s revenue from operations rose 4% q-o-q to $1.31 billion, largely due to an increase in consumer base.

On a year-on-year basis, the company’s net profit fell 17%, while revenues rose nearly 13%.

During the quarter, the company added 3.1 million subscribers, taking its total base to 134.7 million, higher than 131.6 million in the preceding quarter. Further, owing to increased usage across voice, data and mobile money, Airtel Africa’s average revenue per user (Arpu) rose 3% sequentially to $3.3.

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“While we are not immune to the current macroeconomic challenges and currency devaluation risks, I am pleased to report double-digit reported revenue growth in the period largely driven by customer growth of 9.7% and Arpu growth of 7.2% (for the half year ended September), as we increased penetration and usage through our affordable service offerings,” chief executive officer Segun Ogunsanya said.

The company’s revenue from the voice business rose nearly 1% q-o-q to $616 million, whereas its data revenue rose 6.7% q-o-q to $446 million. The mobile money business rose 8.8% q-o-q to $173 million.

“Following the receipt of the Payment Service Bank and Super-Agent licence in Nigeria during the period, we have launched our mobile money operations. We are excited about the opportunity in our biggest market and will continue to build trust and confidence in the brand, while investing in distribution to increase access to financial services for underserved communities within the country,” Ogunsanya said.

Apart from a decent topline growth, a major reason for the fall in net profit was higher finance cost for the company, which rose 36% q-o-q and 190% y-o-y to $206 million. For the half year ended September, the company’s finance cost rose more than two times to $358 million, which includes foreign exchange and derivative losses of $184 million.

During the quarter, Airtel Africa’s Ebitda margins rose 20 basis points sequentially to 49% owing to an improvement in the revenues.

“Our cost efficiency initiatives combined with improving growth trends have also helped offset inflationary pressures on our cost base and expand our Ebitda margin by 38 bps in constant currency (for the half year ended September). We continue to invest for growth and have increased capital expenditure by 27% over the period, alongside a substantial investment into additional spectrum across several markets,” Ogunsanya said.

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As of September end, the company’s net debt was at $3.28 billion, an increase of 7.3% from the preceding quarter and 5% on year. “We continue to de-risk our balance sheet and have further reduced holding company debt with the early repayment of $450 million of bond in July,” he added.

Airtel Africa was listed on the London Stock Exchange in June 2019.

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First published on: 27-10-2022 at 18:27 IST