Airtel Africa Q2 net profit up 78% at USD 96 million

Bharti Airtel's African arm Airtel Africa on Friday reported a 78 percent jump in net profit to USD 96 million for the second quarter ended on September 30, 2019, driven by growth in customer base. The company had recorded a net profit of USD 54 million in the same period a year ago.

The profit growth of the company, which provides telecom services in 14 African countries, was 83.6 percent during the period under review in constant currency terms. "The constant currency revenue growth of 11.4 percent was driven by double-digit growth in Nigeria and East Africa, partially offset by a slight decrease in the Rest of Africa," Airtel Africa said in a statement.

The revenue of Airtel Africa grew 9.8 percent to USD 844 million during the reported quarter from USD 769 million in the corresponding quarter of 2018-19. "In the first six months of this financial year, we delivered revenue growth of 11.4 percent in constant currency terms, with even higher underlying EBITDA growth as we continued to improve our operating leverage and a tight focus on costs," Airtel Africa Chief Executive Officer Raghunath Mandava said in a statement.

The average revenue per user almost remained flat at USD 2.8 in the second quarter. However, it grew by 2.4 percent on a constant currency basis. The total customer base of Airtel Africa grew by 10.4 percent to 103.9 million from 94.1 million during the period under review. Data users on the company's network grew by 17.7 percent to 31.9 million in July-September 2019 from 27.1 million a year ago.

"This performance underlines our ability to consistently grow in double digits, powered by our growth engines of data and Airtel Money growing at 37 percent and 46 percent respectively. This is the 7th quarter of double-digit growth with EBITDA margin expansion of over 90 basis points," Mandava said. The net debt on the company almost halved to USD 3,191 million at the end of September 30, 2019, from USD 6,439 million a year ago.

"The reduction in net debt is a result of bond repayments of USD 2.2 billion and an increase in cash from the net IPO proceeds of USD 670 million. As a result, leverage reduced to 2.3 times as of September 2019 as compared to 5.1 times as of September 2018 basis last twelve months EBITDA," the company said.