Airtel Africa achieves 13% revenue growth due to 12% growth in customer base, now 111.5m

Airtel Africa, one of the major mobile telecoms companies in Africa, has released its Q1 results for the period ended June 2020. The company posted an on-year revenue growth of 6.9%, with constant currency growth of 13.0%.

This was largely driven by an 11.8% growth in its customer base (YoY) to 111.5 million and ARPU growth of 1.6% in constant currency. The revenue growth was achieved across all the regions: Nigeria up 17.1%, East Africa up 17.5% and Francophone Africa up 2.2%. Out of all its key segments, Data achieved the highest growth at 35.7% closely followed by mobile money at 26.3% and lastly by voice which recorded a 2.2% growth

Though revenue witnessed a growth, net profit slumped by 56.9% to $57m largely as a result of a one-off gain of $72m related to the expired indemnity to certain pre-IPO investors in the same period last year, higher finance costs and tax.

Key Highlights of the results is as listed below.

• Customer base grew by 11.8% to 111.5 million.
• Revenue increased by 6.9% to $851m, with constant currency revenue growth of 13.0%
• Constant currency revenue growth was recorded across all key business segments, with voice revenue up by 2.2%, data by 35.7%, and mobile money by 26.3%.
• Underlying EBITDA increased by 7.9% to $375m, with constant currency growth of 14.6%
• The reported underlying EBITDA margin was 44.1%, up by 40 bps.
• Operating profit increased by 12.9% to $210m, an increase of 21.5% in constant currency
• Free cash flow was $96m compared to $62m in the same period last year.
• Earnings per share (EPS) before exceptional items was $1.0 cents and basic EPS was $1.1 cents.
• Net debt to underlying EBITDA was 2.2x, compared to 3.0x in June 2019.

According to the CEO of Airtel Africa, Raghunath Mandava,

“During last quarter our business was impacted by the Covid-19 pandemic, as restrictions on movements of people and ways of socialising were introduced to contain the spread of infection. In these unprecedented times, we have worked with governments, regulators, partners, and suppliers to keep customers and businesses connected as well as supporting the economies and communities. We focussed on expanding and maintaining our network to ensure it could cope with increasing demand, we kept our distribution up and running by increasing the penetration of digital recharges and stock levels, and we expanded our home broadband solutions to ensure customers could work and access entertainment remotely. 

Covid-19 impacted customer usage pattern, particularly during the month of April, however, as some of these restrictions started to be lifted, customer usage trends in May and June returned to being broadly consistent with pre Covid-19 trends. The Group’s performance generally reflected these trends, with revenue growth accelerating in May, and we ended the quarter with 13% revenue growth and 61 bps of EBITDA margin expansion in constant currency. The business showed its resilience even during these unprecedent circumstances with all key business segments – voice, data and mobile money, and all regions – Nigeria, East Africa and Francophone Africa contributing to growth. 

During the quarter we also increased our support of the communities where we operate by providing financial support towards essential workers, free data for educational purposes and we worked together with governments to temporarily waive fees on certain mobile money transactions. We also created an exciting partnership with UNICEF to provide children with access to remote learning and enable access to cash assistance for their families via mobile cash transfers. 

The outlook remains uncertain, particularly regarding a so called potential second wave of infections and the actions governments will decide to take in that event. However, these results are further evidence of the growth opportunities our markets offer and the effectiveness of our strategy to focus on winning customers, investing in our network and expanding our voice, data and mobile money businesses.”

Airtel Africa currently operates in 14 countries in Africa and is quoted on the Nigerian Stock Exchange. Its stock closed at N348 at the end of Friday’s trading day without a response to the release of the results.