May 13, 2020

By Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE)-Leading provider of telecommunications and mobile money services, Airtel Africa Plc on Wednesday announced its Pretax profit for the period ended March 31, 2020 grew 71.7 percent to $598 million from $348 million recorded a year ago.

This is coming on the heels of an increased revenue of 11 percent to $3.42 billion from $3.08 billion with fourth-quarter revenue growth up 15 percent.

However, profit after tax was $408 million, down by 4.4 percent due to a one-off deferred tax recognition in Nigeria in the year ended 30 March 2019 and a lower exceptional item gain in the current period. “Post one-off tax benefit, profit after tax for the year increased by $43m or 17 percent,” Airtel said in its report highlights.

According to the telecom giant, growth was recorded across all business segments, with voice revenue up by 5.2 percent to $1.97 billion, data by 39 percent to $930 million and mobile money revenue increase by 37.2 percent to $311 million.

Basic EPS was down 47 percent to $10.3 cents, due to an increase in shares issued. “If all the shares as of 31 March 2020 had been issued on 1 April 2018, the restated basic. EPS for the year would have been $9.8 cents and $10.3 cents for the year ended 31 March 2019. Restated EPS reduced as a result of higher tax and finance costs. This was primarily the result of a $75m, or $2.0 cents per share, higher impact of foreign exchange on debt due to the devaluation of the Nigerian naira, Kenyan and Ugandan shilling and Zambian kwacha in Q4 2020,” Airtel Africa added.

The board has recommended a final dividend of $3 cents per ordinary share, to a total dividend of $6 cents per share to investors of the company.

The proposed final dividend will be paid on 24 July 2020 to shareholders who are on the register of members at the close of business on 3 July (the record date). Airtel paid an interim dividend of $3 cents per ordinary share in November 2019.

On 28 June 2019, Airtel Africa plc announced the successful pricing of its IPO on the London Stock Exchange at 80 pence (NGN 363) per share. The offer comprised 676,406,927 new shares (637,178,959 shares available to institutional investors outside of Nigeria and 39,227,968 shares available to qualified institutional investors and high net worth investors in Nigeria). Unconditional trading of the shares on the London Stock Exchange began on 3 July 2019 and on the Nigerian Stock Exchange on 9 July 2019.

Raghunath Mandava, chief executive officer said: “These are a strong set of results which delivered against our aspirations set out at the time of the IPO, with performance sequentially improving during the year.”

“Revenue increased by 11.2 percent, 13.8 percent in constant currency, and underlying EBITDA by 13.8 percent, 16.3 percent in constant currency, to a reported $1,515 million, underpinned by significant improvement in our Free cash flow generation and reduced leverage.”

“These results also demonstrate the strength and resilience of our business and the effectiveness of our strategy – with all three business services, voice, data and mobile money, contributing to revenue growth. We have also continued to invest in future growth opportunities as we expanded our distribution, modernised and expanded our network with 65% of sites now on 4G, acquired new spectrum in Nigeria, Tanzania, Malawi and Chad, and entered into strategic partnerships in our mobile money business.”

“More recently, the markets where we operate have begun to be impacted by the COVID-19 and the related actions that governments have implemented to reduce the risk of contagion. Our priority has been to keep our colleagues, suppliers and customers safe whilst supporting the communities in which we operate.”

“Telecoms businesses provide strategically essential services to ensure the functioning of economies and communities and are, therefore, more resilient compared to some other sectors. In Africa, the spread of the COVID-19 has lagged the rest of the world and, therefore, it is difficult to precisely forecast what the impact of this will be on customers and business.”

“However, our performance during the month of April has been resilient as the business continued to deliver constant currency revenue growth, although at a lower rate.”

“We enter this period of increased volatility in a strong financial position and our view on the medium-term opportunities across our footprint has not changed, as these markets will continue to benefit from strong population growth and the need for increased connectivity and financial inclusion.”

Shares of Airtel at the close of business on the Nigerian bourse closed flat at N298.90 per share.