2 min read.Updated: 23 Oct 2020, 01:08 PM ISTIshita Guha
Currency devaluation in major markets such as Nigeria, Zambia and Kenya partially offset the revenue growth in constant currency terms in the six months ended September
NEW DELHI: Bharti Airtel Ltd’s Africa unit on Friday posted an 8.8% year-on-year (yoy) drop in net profit to $88 million in the quarter ended September due to higher expenses. The company had reported a net profit of $57 million in the quarter ended June.
The telco’s revenue grew 14.3% yoy on a reported basis and 19.6% in constant currency, to $965 million. This was driven by customer base growth of 12%, both in Q2 FY21 and half-year ended September, and average revenue per user (Arpu) growth of 6.8% in constant currency in July-September, the Sunil Mittal-led company said in a statement.
Currency devaluation in major markets such as Nigeria, Zambia and Kenya partially offset the revenue growth in constant currency terms in the six months ended September, the telco said.
“Revenue growth was recorded across all the regions – Nigeria, East Africa and Francophone Africa. Revenue growth was broad based across all segments - voice up 7.0%, data up 33.4% and mobile money up 30.4% in constant currency terms," the company said.
Airtel Africa’s total customer base grew to 116.4 million in the September quarter from 103.9 million, of which data customer base rose 24.1% to 39.6 million from a year ago.
“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," said Raghunath Mandava, CEO, Airtel Africa.
Mandava, however, said the company remains cautious on potential disruptions likely to be caused by a second wave of coronavirus across Africa, and the related actions of the local governments to arrest the spread of infections. Despite this, Mandava is confident in terms of growth.
“We are in a strong financial position to capture the opportunities in a fast-growing region that is vastly under-penetrated in terms of mobile and banking services," he said.
The company’s mobile money revenue jumped 27.9% yoy to 100 million on a reported basis, and was up 33.9% in constant currency. Airtel Africa partnered with WorldRemit, MoneyGram, Standard Chartered Bank, and Mukuru to increase use cases, and improve customers’ access to digital payments and financial services, Mandava said.
“In Q2, performance in our mobile money business also significantly improved as lockdown restrictions were eased and fees on certain transactions, which had been previously waived, were largely reintroduced," he added.
The company’s earnings before interest tax depreciation and amortisation (Ebitda) grew 17.5% on-year to $437 million in July-September, with constant currency growth of 23.8% Ebitda margin of 45.3% improved by 153 basis points (bps) in constant currency during the quarter.
Airtel Africa is the holding firm for Bharti Airtel's operations in 14 countries, with Nigeria alone accounting for almost half of its Ebitda.
The company's capex rose 1.9% on-year to $149 million in the September quarter. It has a capex target of $625-650 million for this fiscal year given the covid-19 situation improves.