Airtel Africa turns out decent third quarter performance

(Sharecast News) - Airtel Africa said on Friday that its reported revenue in the first nine months of the financial year was ahead 13.8% at $2.87bn (£2.09bn), with third quarter reported revenue growth at 19.5%.
The FTSE 250 company said its constant currency underlying revenue growth was 18.6% for the nine months ended 31 December, with third quarter growth at 22.8%.

Growth for the nine months was recorded across all of its regions, with Nigeria up 21.6%, East Africa ahead 23.4% and Francophone Africa rising 8.0%.

It was also seen across all services, with voice revenue up 10.4%, data growing 31.1% and mobile money 34.2% higher.

Underlying EBITDA for the nine months came in at $1.3bn, up 16% in reported currency, while constant currency underlying EBITDA growth was 22.5%.

Airtel said its underlying EBITDA margin for the nine months was 45.5%, up 118 basis points or 144 basis points in constant currency, with the company's third quarter underlying EBITDA margin 46.9%.

The firm;s operating profit increased 21.8% to $800m in reported currency, and by 29.9% in constant currency, while free cash flow was $466m, up 20% compared to the same period last year.

Basic earnings per share totalled 5.5 cents, down 36.5%, which the board put down to prior year exceptional items and a one-off derivative gain.

Excluding those, basic earnings per share rose 19.8%, while earnings per share before exceptional items was five cents.

Airtel said its customer base was 11.0% larger at 118.9 million, with increased penetration across mobile data where it grew 23.5%, and mobile money services (customer base growing 29.0%.

A total of 2.5 million customers were added in the third quarter alone.

"Our nine-month performance reflects both the resilience of our business model through the Covid-19 pandemic and, for the last six months, a continued improvement in our execution and performance as lockdown restrictions have eased across our countries of operation," said chief executive officer Raghunath Mandava.

"In part this is due to our continued delivery of strong customer growth in the third quarter, 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."

Airtel, however, was working closely with the government to ensure that all its subscribers provided their valid national identification numbers and updated their SIM registration records, such that disruption was minimised, Mandava explained.

"Our performance improvement is evident across the business.

"Regionally, I am pleased to see that the continued strong revenue growth in Nigeria and East Africa, growing 21.6% and 23.4% in constant currency, is increasingly being matched by improvements across Francophone Africa, posting 8.0% growth for the period and 15.0% in the third quarter.

"Our 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."

Finally, Mandava said that while the Covid-19 pandemic had "little impact" on the company's most recent quarter, it remained vigilant around new strains of the virus and further actions by governments to minimise contagion in its 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."

At 0904 GMT, shares in Airtel Africa were down 0.38% at 79.3p.