Airtel Africa Q2 profit slips 9 pc to USD 88 mn

Revenue during the quarter under review grew 14.3 per cent to USD 965 million from USD 844 million in the year-ago period, the company said in a statement. "Importantly, the fundamentals of our business remain strong and revenue growth further benefited 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 benefiting from the fact we provide an essential service to consumers," Airtel Africa CEO Raghunath Mandava said.

The company's revenue on constant currency terms grew 19.6 per cent during the period under review. "In the second quarter, performance in our mobile money business also significantly improved with constant currency revenue growth of 33.9 per cent, up 8 per cent from prior quarter, as lockdown restrictions were eased and fees on certain transactions, which had been previously waived, were largely reintroduced," Mandava said.

Revenue increased 10.7 per cent on reported currency basis to USD 1,815 million during the six-month period ended September 2020 from USD 1,640 million in the corresponding period of 2019-20. The growth was 16.4 per cent in constant currency terms, according to the statement.

The company had a negative impact of about USD 14 million due to devaluation of Nigerian Naira on a valuation done for a 12-month basis, it said. Mandava said the first half of the current fiscal year included the peak impact of the COVID-19 pandemic in the countries.

The company posted 36.6 per cent decline in profit after tax on reported currency basis at USD 145 million (Rs 1,066 crore) for the six-month period ended September 2020 compared to USD 228 million profit in the same period of 2019-20. "Profit after tax was USD 145 million, down by 36.6 per cent, largely as a result of the recognition in the prior year of one-off gain of USD 72 million related to the expired indemnity to certain pre-IPO investors, as well as higher finance costs and tax in the current period," the company said.

Airtel Africa posted 12 per cent growth in customer base to 116.4 million on a year-on-year basis during the reported quarter. In constant currency terms, Airtel Africa's average revenue per user increased by 6.8 per cent to USD 2.8.

"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 the 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," Mandava said.

The net debt of the company increased to USD 3,459 million at September-end 2020 from USD 3,191 million by the year-ago same period.