Airtel Africa unfolds gains amid Covid-19 as H1’20 revenues up 10.7% to $1.82bn

Charles Abuede

• Operating profit increased by 19.5% to $472m
• Free cash flow was $391m
• Interim dividend of $1.5 cents per share

Africa’s telecommunications giant, Airtel Africa has reported a 10.7 per cent growth in its revenue for the half-year ended 30 September 2020 to $1,815 million from $1,640 million generated during the corresponding period of 2019, and a constant revenue currency revenue growth of 16.4 per cent, year on year.

The statement bearing the information was signed by Simon O’Hara, its company secretary, and filed with The Nigerian Stock Exchange (NSE). It showed that the revenue growth was largely driven by the growth of its customer base which was up by 12 per cent to 116.4 million and the average revenue per user (ARPU) growth of 4.3 per cent in constant currency.

Revenue growth was recorded across all regions: Nigeria was up 20.2 per cent, East Africa up 21.9 per cent and Francophone Africa up 4.4 per cent, and services, with voice revenue up by 7 per cent, data by 33.4 per cent and mobile money by 30.4 per cent.

Further analysis of the financial statement shows that profit after tax (PAT) was $145 million, down by 36.6 per cent, largely as a result of the recognition in the prior year of a one-off gain of $72 million related to the expired indemnity to certain pre-IPO investors, as well as higher finance costs and tax in the current period.

Further breakdown of the financial data revealed that Nigeria contributed $718 million of the total revenue indicating revenue growth of 12.1 per cent in the half-year from $640 million recorded during the previous year from the West African region. This revenue figure was recorded owing to the devaluation of the Nigerian naira by 6.6 per cent year on year.

Similarly, Airtel also reported that revenue from voice increased 11.4 per cent to $413 million; this was driven by customer base increase of 11.5 per cent which was partially offset by a 0.8 per cent drop in voice ARPU, a result of a change in the customer mix due to the COVID-19 pandemic in the first quarter. The customer base growth was driven by the expansion of the distribution network and network infrastructure. Voice usage per customer increased by 13.5 per cent.

Raghunath Mandava, Airtel’s chief executive officer, said of the performance: “The first half of our fiscal year included the peak impact of the COVID-19 pandemic in the countries where we operate, as lockdown measures were swiftly implemented to stem the initial spread of contagion. In these unprecedented times, the telecoms industry has emerged as a key and essential service for these economies, allowing customers to work remotely, reduce their travels, keep them connected and allow access to affordable entertainment. In these exceptional circumstances, in the first half, we delivered a strong set of results and as lockdown restrictions eased during Q2 our performance continued to improve with constant currency revenue growth of 19.6 per cent, up 6.6 per cent from the prior quarter.”

He noted that the fundamentals of the business remain strong and revenue growth further benefitted from the execution of our strategy with a specific focus on expanding distribution in the rural areas, investing in our network and increasing 4G coverage, as well as benefitting from the fact we provide an essential service to consumers. We remain alert to the potential for further disruptions from a second wave of COVID-19 across Africa, and the associated actions of governments to minimise contagion. Nevertheless, we are in a strong financial position to capture the opportunities in a fast-growing region that is vastly underpenetrated in terms of mobile and banking services,” he said.