NEW DELHI : Bharti Airtel Ltd’s Africa unit on Friday posted a sharp 56.9% year-on-year (y-o-y) 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.
The company had reported higher profit in the same quarter of the preceding fiscal due to a one-time gain of $72 million related to the expired indemnity to certain pre-initial public offering (IPO) investors in Q1FY20. Profit declined in the April-June quarter because of higher finance costs and tax.
Revenue of the company, which got 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. The rise in revenue was largely driven by the growth in total customer base, up 11.8% y-o-y to 111.5 million, and average revenue per user (Arpu) growth of 1.6% in constant currency.
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.
“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 growth 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.
“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.
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 the same period last year due to higher operating profit and withholding tax on dividends declared, Airtel Africa said.
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