Airtel Africa Revenue Grew By 30.7% to $1.1B, Mobile Money Up 53.7%

Airtel africa
The logo of telecommunications company Airtel is pictured on an umbrella and chairs set up by vendors in Abuja. REUTERS/Afolabi Sotunde

Airtel Africa posted 30.7% growth in revenue to $1,1B, driven by constant currency growth of 33.1% partially offset by currency devaluations, mainly in the Nigerian naira (6%) and Zambian kwacha (24.2%), in turn partially offset by appreciation in the Central African franc (6.6%) and Ugandan shilling (5.3%) as indicated in the recently released financial results for the period ended 30 June 2021.

Airtel Africa’s revenue growth for the quarter partially benefitted from a weakened performance in the first quarter of the prior year during the peak period of Covid-19 related restrictions across the region.

The telecoms company’s profit after tax was $142m, a 148.7% increase on the $57m of the prior period. This increase was largely due to higher operating profits along with stable net finance costs, which more than offset the increase in tax charges due to increased profits.

Airtel africa
The logo of telecommunications company Airtel is pictured on an umbrella and chairs set up by vendors in Abuja. REUTERS/Afolabi Sotunde

Airtel Africa’s customer base grew by 8.4% to 120.8 million, with increased penetration across mobile data (customer base up 14.8%) and mobile money services (customer base up 24.6%). The slowdown in customer base growth was due to new SIM registration regulations in Nigeria; excluding Nigeria, the customer base grew by 15.9%.

Mobile money revenue grew by 62.4%, largely driven by growth in Tanzania, Zambia, Uganda and Malawi. Revenue growth was driven by both customer base growth of 23.9% and ARPU growth of 34.5%, due largely to expansion of our distribution network.

Mobile money ARPU growth was driven by the 39.3% growth in transaction value per customer (from $131 per customer per month to $176 per customer per month). Mobile money revenue accounted for 23.2% of total revenue in the quarter, up 4.2 percentage points from 19.0% in the prior period.

Operating profit increased by 67.6% to $352m in reported currency, due to a combination of strong revenue growth and improvements in operating efficiency. In constant currency operating profit grew by 73.9%.

Net finance costs were broadly stable in the period. Effective interest rate increased to 5.0% from 4.7% in the prior year largely as a result of a reduction in foreign currency debt and increase in local currency OpCo debt, however interest charges were broadly stable
due to lower market debt and slightly higher interest income.

Total tax charges increased by $62m, to $117m. The $62m increase in tax charges was due to higher operating profit, a one-time tax case settlement charge of $9m in one of our operating markets and a higher withholding tax of $4m on dividends by subsidiaries. The
the prior period also benefited from the recognition of deferred tax credit of $7m in Tanzania.

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Basic EPS was 3.3 cents, up from 1.1 cents in the prior period. This increase was mainly due to higher operating profits which more than offset the increased tax charges from higher profits. Net finance cost and minority interest were broadly stable

Raghunath Mandava, chief executive officer, on the trading update:

“Our Q1’22 results have been very strong, with reported growth of 30.7% in revenue and 42.4% in underlying EBITDA, with constant currency growth of 33.1% and 46.2% respectively. Q1 of last year was impacted by the start of Covid, but even after adjusting for these effects, our Q1’22 revenue growth rates for the Group, service segments and reporting regions were all ahead of Q4’21 trends.

We have posted strong double-digit growth across voice (26.0%), data (37.4%) and mobile money (53.7%), and across all our regions.

Sub-Saharan Africa is now experiencing a third wave of the pandemic. Governments are implementing balanced measures of lockdowns and restrictions. But vaccination levels remain very low. In these challenging times, our business model has so far proven resilient, but we continue to monitor the situation closely for the potential impact on local economies and consumers.

Our total customer base has returned to growth with acceleration in our East Africa and Francophone regions and despite continuing negative net additions in Nigeria. With the easing of these restrictions in late April, we have since been able to gradually increase
locations for activations in line with regulatory compliance across Nigeria, and we have begun adding new customers.

Our continued focus on modernisation and rollout of our network, along with simplifying our products and improving our distribution, have all helped us to make handsome gains on our ARPUs across voice, data and mobile money. Our robust operating model and solid execution should enable us to continue our profitable growth.

We continue to see huge potential across voice, data and mobile money due to the low penetration levels in Africa, as we continue to partner the nations in bridging the digital divide and enhancing financial inclusion. We remain committed to continuing to efficiently and effectively deliver services that help to improve the lives, communities and economies we serve.”