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Airtel Africa posts 33.9% revenue growth in Q2 2020

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Airtel Africa
Airtel Africa

Airtel Africa PLC has reported 33.9% growth in revenue for the second quarter of 2020 supported by double-digit growth in voice and data revenue.

Airtel Africa, a subsidiary of India’s Bharti Airtel, has a presence in over 14 countries and a 111.5 million subscriber base in the continent, making it one of the biggest telecommunications providers in Africa.

According to the telecommunication company’s second quarter of financial results released on Friday, voice revenue up by 7.0%, data by 33.4% and mobile money by 30.4%.

Airtel Africa explains the results are driven by a double-digit increase in customer growth and the expansion of its 4G network.

The company’s report read in part:

Importantly, the fundamentals of our 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.

In Q2, performance in our mobile money business also significantly improved with constant currency revenue growth of 33.9%, up 8% from prior quarter, as lockdown restrictions were eased and fees on certain transactions, which had been previously waived, were largely reintroduced.

Airtel Africa also said the company continues to enter new partnerships with leading institutions such as WorldRemit, MoneyGram, Standard Chartered Bank, and Mukuru to increase use cases and improve customers’ access to digital payments and financial services.

“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. We remain confident of delivering long term sustained growth for our shareholders.”

Key highlights:

  • Customer base grew by 12.0% to 116.4 million
  • Revenue on reported basis increased by 10.7% to $1,815m, with Q2 revenue growth of 14.3%
  • Revenue growth in constant currency was 16.4% in H1, and 19.6% in Q2. Growth was recorded across all regions: Nigeria up 20.2%, East Africa up 21.9% and Francophone Africa up 4.4%, and services, with voice revenue up by 7.0%, data by 33.4% and mobile money by 30.4%
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  • Underlying EBITDA increased 12.8% to $812m while constant currency underlying EBITDA growth was 19.3%
  • Reported underlying EBITDA margin was 44.7%, up by 85 bps(110 bpsin constant currency)
  • Operating profit increased by 19.5% to $472m, an increase of 28.3% in constant currency
  • Free cash flow was $319m compared to $210m in the same period last year
  • Basic EPS was $3.0¢, down 52.9% largely as a result of exceptional items and a one-off derivative gain incurred in the prior year.

Excluding these one-off benefits basic EPS would be up 19%. EPS before exceptional items was $3.0¢

  • The board declared an interim dividend of $1.5¢ per share in line with the new progressive dividend policy to focus on growth opportunities and faster deleveraging.

The new policy aims to grow the dividend annually by a mid to highsingle digit percentage from a base of $4 cents per share for FY 2021, until reported leverage falls below 2.0x.

@TechEconomyNG connects past-present-emerging technological impacts on Businesses, People and Cities. All Correspondence to: [email protected]

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