Airtel Africa Net Profit Dips 21% on Year

Leading telecoms firm, Bharti Airtel Africa has reported a mixed result for the third quarter of 2020 with a net profit of $116 million which increased 12.6% on-year and 31.8% from the preceding quarter’s $88 million, on account of higher revenues and decrease in exceptional item expenses. Consolidated revenues grew quarter-on-quarter to $1,034 million, while average revenue per user (ARPU) increased from $2.8 to $2.9 in the October-December period, as per financial results released.

Raghunath Mandava, CEO, Airtel Africa said strong growth in revenue and earnings is partly due to “our continued delivery of strong customer growth in Q3, despite the introduction mid-December of additional customer registration requirements in Nigeria.”

“This has meant a temporary halt to the ability of all operators in the country to onboard new customers. But we are working closely with the government to ensure that all our subscribers provide their valid National Identification Numbers (NINs) and update their SIM registration records, such that disruption is minimised,” he said.

Mandava added that Airtel’s rollout into rural markets, along with robust customer growth, helped voice grow 10%, while data and mobile money continued to be growth engines, with over 30% growth. Data revenues grew 4.2% to $295 million while mobile money transaction value shot up 11.3% to $12,959. Data ARPU, however, declined marginally from $2.5 to $2.4.

Airtel’s subscriber base across 14 African countries grew 2.2% to 118.9 million, with increased penetration across mobile data and mobile money services. 2.5 million customers were added in Q3, the company said. As of December-end, Airtel had 21,460 active mobile money users and mobile money ARPU increased from $1.7 to $1.8. Data usage grew to 2.6 GB per user while voice usage per customer was 241 minutes. Earnings before interest, tax, depreciation and amortization (EBITDA) stood at $485 million, up 14% on-quarter.

Even as the Covid-19 pandemic has had little impact the telco’s performance, Airtel remains vigilant about the new strains of the virus and further actions by governments to minimise contagion in our countries of operation.

“The opportunities for sustainable profitable growth from our underpenetrated markets for both mobile and mobile money services remain hugely attractive, and we are confident of continuing to deliver on our growth strategy,” Mandava said.

Speaking on other markets across the region, the CEO said that “we have a lower market share in Nigeria, Congo, DRC, Tanzania and Kenya. And our entire current focus is on these countries in order to grow, we are not looking at bidding for Ethiopia at this stage”. The company had said it that its nine-month reported revenue increased by 13.8% to $2.87 billion, with third quarter revenue up by 19.5%.

The company reported a slight decline in profit before tax to $482 million in the period to Dec. 31, 2020 from $501 million in the period to Dec. 31, 2019. It attributed the drop to a combination of higher finance costs and benefits from non-operating exceptional items in the prior period. Excluding the benefit of exceptional items and the one-off derivative gain in the prior period, profit before tax rose by 20.4%, it said.

The company said that its Nigerian subsidiary has collected national identity numbers from nearly half of its customers as part of a process to adhere to regulator demands to add valid National Identification Numbers to every SIM card registered in the country. It was working to verify the data, Mandava said.

“This could require a little bit more time and we will not be able to complete the full exercise, in which case, after all efforts if we don’t manage by Feb. 9 then we will, I am sure, discuss with the government and request for some extension,” he told reporters.

After Airtel Kenya’s merger with Telkom fell through, the company has “invested solo” on expanding its rural network as a way to compete with market leader Safaricom. “We are consistently gaining market share over the last few years, and we are growing quite handsomely in Kenya on our own,” Mandava said.

The company still sees voice as crucial to growth in the future, as huge swathes of the continent are still under-using their phones, as costs still remain high.

“We all need to work towards reducing these interconnected costs in some countries,” Mandava said. “The need for telecommunication is far higher, it’s a latent, inherent demand that exists, that we as operators are not fulfilling enough. And if you can do a good job of it, you can grow faster.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

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