Airtel Africa Q2 net profit more than doubles on-year to $192 million

Airtel’s Africa business reported a net profit of $192 million in the fiscal second quarter, which more than doubled year-on-year and over 35% sequentially, on the back of a sharp reduction in finance costs coupled with decent growth in data and mobile money revenues.

Revenue for the quarter to September rose 20% on-year and 4.31% sequentially to $1.16 billion, the company said Thursday.

Accordingly, Airtel Africa’s profit for the first-half ended September more than doubled on-year to $335 million, while revenue for the same period rose 25% on-year to $2.27 billion.

“Our first half financial performance has been strong, though risks from Covid still remain. The first half of last year, and especially Q1, was impacted by the start of Covid, but even after adjusting for these effects, our revenue growth rates for the half year for the Group and all our service segments are ahead of our FY’21 revenue growth trends, and in reported terms, these are all in strong double digit,” Segun Ogunsanya, Airtel Africa’s recently named new chief executive officer, said in an official statement Thursday.

Operationally, he said, Airtel Africa has continued network modernisation and expansion, aligned with an extension of its distribution capabilities, which have together contributed towards continued strong growth in ARPUs across voice, data and mobile money. “We have seen an improvement in our customer growth trends for the Group as we approach stability of net monthly movements in Nigeria.”

Airtel’s Africa arm said “the continued strength of the business has led the board to declare an interim dividend of 2 cents per share in accordance with an upgraded dividend policy which sets a new target base dividend for FY’22 of 5 cents per share, with the aim to grow this at a mid-to high-single-digit percentage each year”.

The Africa unit’s net finance cost in the September quarter fell 23% on-year and nearly 27% sequentially to $71 million. “Net finance costs were lower compared with the previous period due to higher derivatives and forex loss of $11 million in the prior period,” Airtel Africa said in its earnings statement.

The company added that net finance costs were also lower as a result of stable net interest costs, lower foreign exchange losses (mainly driven by appreciation of the Zambian kwacha) and a one-time $11.9 million gain in other finance charges as a result of the reversal of an interest provision in one of our operating entities”.

Airtel Africa’s net debt fell 11.61% sequentially to $3.12 billion in the quarter to September.

The Africa unit’s customer base across 14 markets in the continent rose 1.6 % on-quarter to 122.7 million but monthly churn rose to 4.3% (3.6%). The Africa unit’s average revenue per user (ARPU) grew 1.5% sequentially to $3.1 in the September quarter.

Data revenue, in turn, grew 5.2% on-quarter to $373 million while voice revenue rose 2.7% sequentially to $574 million in the June quarter. Data customer base at the end of September, FY22 stood at 43.9 million, indicating 3.5% sequential growth.

The Africa operation’s mobile money business revenue climbed 32.5% on-year and 5.2% on-quarter to $129 million. The active mobile money user base, in turn, rose 3.7% sequentially to 23.9 million, though mobile money ARPU saw flattish sequential growth to $1.8.

Bharti’s Africa operation has seen a strong business resurgence in recent years, after it completed its first full year of profitability in FY18, marking a turnaround from previous years when losses had mounted every quarter, dragging down consolidated numbers and had even cast doubt on Bharti’s strategy of entering into the continent back in 2010.

Airtel Africa Plc was listed on London Stock Exchange in late-June 2019.