NEW DELHI : New Delhi: Bharti Airtel Ltd’s Africa unit on Friday posted a sharp 56.9% year-on-year (yoy) drop in profit after tax to $57 million in the quarter ended June. The company had reported a net profit of $132 million in the same quarter last year.
Lower average revenue per user (Arpu), which declined 3.8% yoy to $2.6 due to covid-19-led disruptions, hit profit.
Higher profit a year ago was due to one-time gain of $72 million related to the expired indemnity to certain pre-initial public offering (IPO) investors in Q1FY20. Profit also declined during Q1 because of higher finance costs and tax, the company said in a statement.
Revenue of the company, which listed on the London Stock Exchange in July 2019, increased 6.9% on-year to $851 million in the June quarter, with constant currency growth of 13%, driven by rise in key segments of voice, data and mobile money. Double-digit growth in Nigeria, East Africa, and a 2.2% rise in Francophone Africa also contributed to the revenue, which was $796 million in the same period last fiscal.
Airtel Africa’s total customer base rose 11.8% on year to 111.5 million in April-June, while data subscriber base was up 23.2% on year at 37 million in the April-June quarter, the statement said.
“During last quarter, our business was impacted by the covid-19 pandemic, as restrictions on movements of people and ways of socialising were introduced to contain the spread of infection," said Raghunath Mandava, chief executive officer CEO, Airtel Africa.
Mandava, however, said customer usage trends that were impacted in April started returning to normal in May and June as some restrictions were lifted. Trends in May and June were largely in line with those of the pre-covid-19 levels. “The group’s performance generally reflected these trends, with revenue growth accelerating in May," he added.
As far as the outlook is concerned, Mandava said it remains uncertain due to a potential second wave of coronavirus infections and the ensuing actions governments may take to curb the spread.
"However, these results are further evidence of the growth opportunities our markets offer and the effectiveness of our strategy to focus on winning customers, investing in our network and expanding our voice, data and mobile money businesses," Mandava said.
The company’s earnings before interest tax depreciation and amortisation (Ebitda) grew 7.9% on-year to $375 million in April-June, with constant currency growth of 14.6% driven by revenue increase of 13% and efficiency in operating expenses. Ebitda margin of 44.1% improved by 40 basis points (bps), and by 61 bps in constant currency.
Airtel Africa is the holding firm for Bharti Airtel Ltd’s operations in 14 countries, with Nigeria alone accounting for almost half of its Ebitda.
“Foreign exchange had an adverse impact of $43.3m on revenue and $20.4m on underlying EBITDA, largely driven by the devaluation of the Nigerian naira, Zambian kwacha, Kenyan shilling and other East African currencies," the company said.
The company's capex dropped 33.6% on-year to $66 million in the June quarter. It has a capex target of $625-650 million for this fiscal year given the covid-19 situation improves, the management said in a post-earnings call with analysts.
Airtel Africa’s net finance costs rose by $17 million in the first quarter of FY21 because of higher other finance costs, which more than offset reduced interest costs of $5.5 million. Total tax charge was $54 million compared with $35 million in same period last year due to higher operating profit and withholding tax on dividends declared.
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