Airtel Africa has reported a 6.9% jump in revenues to $851 million in the first quarter that ended on 30th June 2020 with mobile money and data recording the most uptick.
In the three months to June, Airtel’s customers grew by 11.5% to 111.5 Million users throughout the continent. The Telco posted growth in all three business segments; voice, data and mobile money with all regions – Nigeria, East Africa and Francophone Africa contributing to the growth.
Profit for Airtel Africa fell by 56.9% in 2020 Q2 as a result of high finance costs, taxes and an expired indemnity. The company recorded a $ 57 million profit for the quarter ended June 2020, down from $132 million “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.”
“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.” Said Bharti Airtel Africa CEO Raghunath Mandava.
According to the CEO, Covid-19 impacted customer usage pattern, particularly during the month of April. However, he notes that 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.
Mobile money revenue grew by 20% to $81 million, while data revenue grew by 28% to $265 million compared to a similar period last year. The company’s underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 7.9% to $375 million.
The company recorded the most revenue growth in East Africa, which grew by 17.5%, followed by Nigeria and Francophone Africa at 17.1% an 2.2%.
Voice revenues accounted for more than half of its earnings, raking $454 million. However, the segment shrunk by 3.2% YoY compared to $469 million in 2019 Q2. Data followed second and mobile revenue at third. Average Revenue per User grew by 11.8% to 111.5 million.
Expenses for Airtel Africa grew by 6% YoY from $452 million to $479 million. This is as a result of high net finance costs, which increased by $17m to $92 million for the quarter. The devaluation of the currency in Zambia, Madagascar, and Seychelles impacted the company’s foreign exchange denominated liabilities contributed to higher finance costs.
Further, the company’s taxes increased from $35 million to $54 million YoY due to lower tax credits this quarter, which reduced from $13.8 million last quarter to $6.7m this quarter.
Although future outlook remains uncertain, Airtel is optimistic about the numerous growth opportunities in the African continent and the effectiveness of their strategy to focus on winning customers, investing in networks and growing their voice, data and mobile money businesses.
Airtel Africa is a leading telecommunications company in Africa. It is among the leading mobile operators in all the 14 African countries it operates in. The Telco has a huge potential for growth given the rising middle-class population, increasing smartphone users and the growing use of mobile money transfers services in the continent.