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… Declares 3 cents Interim Dividend
Notwithstanding the global economic challenge, Airtel Africa Plc listed on the Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE) has increased its Customer base to 104 million, this indicating a 10.4 per cent rise.
Also, the leading telecommunications service provider in its second quarter financials made public on the NSE on Friday, increased its revenue profile by 8.4 per cent to $1.640 billion and operating profit by 8.6 per cent respectively in its half year ended September 30th, 2019.
A further x-ray of the company’s result further showed that in constant currency terms, revenue grew 11.4 per cent in H1 and 12.6 per cent in Q2. Thus making it the 7th consecutive quarter of double digit constant currency growth. The constant currency revenue growth of 11.4 per cent was driven by double-digit growth in Nigeria and East Africa, partially offset by a slight decrease in Rest of Africa
The outlook for the company which saw it declared a 3 cent interim dividend, was occasioned by broad based growth across all services, with revenue in Voice, Data and Mobile Money up by 3.2 per cent, 37.8 per cent and 46.5 per cent respectively.
“Reported underlying EBITDA was $ 719 Mn in H1, up 10.9 per cent, while constant currency underlying EBITDA growth was 13.7 per cent over the same period. The underlying EBITDA margin in reported currency was 43.9 per cent in H1, an increase of 100 bps, while there was an increase of 90 bps in constant currency terms. Free cash flow was $ 237 Mn, up by 28 per cent in H1. EPS before exceptional items was $ 4.1¢ and Basic EPS was $ 6.3¢. Net debt to EBITDA was 2.3x, compared to 5.1x as of September 2018.
Commenting on the company’s financials, the Chief Executive Officer, Mr. Raghunath Mandava, said “These figures underline the strength of our ability to consistently deliver growth across voice, data and mobile money. In the first 6 months of this financial year, we delivered revenue growth of 11.4 per cent in constant currency terms, with even higher underlying EBITDA growth as we continued to improve our operating leverage and tight focus on costs. This performance underlines our ability to consistently grow in double digits, powered by our growth engines of Data and Airtel Money growing at 37 per cent and 46 per cent respectively. This is the 7th quarter of double-digit growth with EBITDA margin expansion of over 90 basis points.
“In July we reached an important milestone as we crossed 100 million customers across our footprint. Our strong customer growth aided by distribution expansion was a key driver behind voice revenue growth. Our investments ahead of the industry in LTE network along with our simple and intuitive customer journeys have helped grow data consumption by 81 per cent and data revenue growth by 37.8 per cent. Over the last 6 months we launched 4G services in the Democratic Republic of Congo and Niger, and 4G sites now account for 58 per cent of total sites. Now we are ready to launch in Tanzania, thereby making 4G services available across all our 14 countries.
“Revenue in our Mobile Money business grew 46.5 per cent in H1 and just above 50 per cent in Q2, as a result of compelling customer propositions and the investments in our exclusive franchise stores and Kiosks.We have also announced exciting partnerships with Mastercard, Ecobank and Finablr which we believe will help to further support our growth aspiration and drive financial inclusion. The business continues to show positive momentum and we are confident we will continue to deliver sustained growth across Voice, Data and Mobile Money, underpinning our medium-term aspirations for revenue and profitable growth’, he added.
Revenue
Revenue increased by 8.4 per cent, with constant currency growth of 11.4 per cent being partially offset by currency devaluation. Growth accelerated in the second quarter to 12.6 per cent in constant currency as a result of improvement in the performance of Rest of Africa. Constant currency revenue growth was largely driven by a 10.4 per cent increase in the customer base, to 104 Mn, and ARPU growth of 1.5 per cent. Double digit revenue growth in Nigeria and East Africa was partially offset by a decrease in Rest of Africa revenues. Across services, revenue growth in constant currency terms was positive with mobile Voice up 3.2 per cent, Data up 37.8 per cent, and Mobile Money up 46.5 per cent.
Operating Profit
Operating profit increased by 8.6 per cent as a result of strong revenue growth, while operating expenditures as percentage of revenue remained broadly flat. Operating profit in constant currency terms grew by 11.1 per cent, partially offsetting the currency devaluation.
Finance Cost
Finance costs reduced by $ 70 Mn. A 23 per cent decrease in interest costs, as a result of lower debt, and derivatives gains more than offset the impact from one-off benefits incurred in the prior year, higher costs related to the IPO and foreign exchange impact on debt.
Taxation
Total tax charge for the period was $ 88 Mn, as compared to a tax credit of $ 82 Mn in the same period last year as a result of one-off items which included deferred tax recognition in Nigeria for $ 116 Mn and a tax reversal of $ 27 Mn in the 6 months ended 30 September 2018.
Profit After Tax
Profit After Tax was $ 228 Mn, an increase of 11.9 per cent driven by an increase in operating profit and lower finance costs partially offset by higher tax charges.
Basic Earnings Per Share
Basic EPS was $ 6.3¢, down 59.4 per cent, due to the increase in the number of shares issued. If all the shares as at 30th September 2019 had been issued on 1st April 2018, the restated Basic EPS for 6 months ended 30 September 2019 would have been $ 5.7¢ and 6 months ended 30th September 2018 would have been $ 4.8¢.
The proposed interim dividend will be paid on 29 November 2019 to shareholders who are on the register of members at close of business on 15 November 2019 (the Record Date).
