Airtel Africa’s profit after tax was $145m, down by 36.6%, largely as a result of the recognition in the prior year of a one-off gain of $72m related to the expired indemnity to certain pre-IPO investors, as well as higher finance costs and tax in the current period.
Excluding the benefit of exceptional items and one-off derivative gain of $46m in the prior period, profit after tax has increased by 31.8%.
Airtel Africa’s customer base grew by 12.0% to 116.4 million. Also, the telecom service provider’s revenue basis increased by 10.7% to $1,815m, with Q2 revenue growth of 14.3%.
Revenue growth in constant currency was 16.4% in H1, and 19.6% in Q2. Growth was recorded across all regions:
Nigeria up 20.2%, East Africa up 21.9% and Francophone Africa up 4.4%, and services, with voice revenue up by 7.0%, data by 33.4% and mobile money by 30.4%.
Underlying EBITDA increased 12.8% to $812m while constant currency underlying EBITDA growth was 19.3%
Reported underlying EBITDA margin was 44.7%, up by 85 bps (110 bps in constant currency)
Operating profit increased by 19.5% to $472m, an increase of 28.3% in constant currency
Free cash flow was $319m compared to $210m in the same period last year
Basic EPS was $3.0¢, down 52.9% largely as a result of exceptional items and a one-off derivative gain incurred in the prior year. Excluding these one-off benefits, basic EPS would be up 19%. EPS before exceptional items was $3.0¢
The board declared an interim dividend of $1.5¢ per share in line with the new progressive dividend policy to focus on growth opportunities and faster deleveraging.
The new policy aims to grow the dividend annually by a mid to high-single-digit percentage from a base of $4 cents per share for FY 2021 until reported leverage falls below 2.0
Raghunath Mandava, chief executive officer, on the trading update:
“The first half of our fiscal year included the peak impact of the COVID-19 pandemic in the countries where we operate, as lockdown measures were swiftly implemented to stem the initial spread of contagion.
In these unprecedented times, the telecoms industry has emerged as a key and essential service for these economies, allowing customers to work remotely, reduce their travels, keep them connected and allow access to affordable entertainment.
In these exceptional circumstances, in the first half, we delivered a strong set of results and as lockdown restrictions eased during Q2 our performance continued to improve with constant currency revenue growth of 19.6%, up 6.6% from the prior quarter.
Importantly, the fundamentals of our business remain strong and revenue growth further benefitted from the execution of our strategy with a specific focus on expanding distribution in the rural areas, investing in our network and increasing 4G coverage, as well as benefitting from the fact we provide an essential service to consumers.
In Q2, performance in our mobile money business also significantly improved with constant currency revenue growth of 33.9%, up 8% from the prior quarter, as lockdown restrictions were eased and fees on certain transactions, which had been previously waived, were largely reintroduced.
We also continued to enter new partnerships with leading institutions such as WorldRemit, MoneyGram, Standard Chartered Bank, and Mukuru to increase use cases and improve customers’ access to digital payments and financial services.
We remain alert to the potential for further disruptions from a second wave of COVID-19 across Africa, and the associated actions of governments to minimise contagion.
Nevertheless, we are in a strong financial position to capture the opportunities in a fast-growing region that is vastly underpenetrated in terms of mobile and banking services. We remain confident of delivering long term sustained growth for our shareholders.”