Airtel Africa posts eighth consecutive quarter of growth
By Josh White
Date: Tuesday 28 Jan 2020
(Sharecast News) - Airtel Africa reported its eighth consecutive quarter of double-digit revenue growth and EBITDA margin expansion in constant currency on Tuesday, as its customer base grew 9.4% to 107.1 million in its third quarter.
The FTSE 250 company said revenue increased 9.9% to $2.52bn (£1.93bn) for the nine month period ended 31 December, with third quarter revenue ahead 12.8%.
It said that in constant currency terms, revenue was up 12.4% during the nine month period, and 14.2% in the third quarter, which was the eighth consecutive quarter of double-digit constant currency growth.
Airtel said growth was recorded across all services, with revenue in voice, data and mobile Money up by 3.9%, 39.0% and 40.4% respectively in constant currency.
Underlying EBITDA was $1.12bn for the nine-month period, up 13.2%, while constant currency underlying EBITDA growth was 15.5% over the same period.
The company said its underlying EBITDA margin in reported currency was 44.3%, which was an increase of 129 basis points, while there was an increase of 121 basis points in constant currency terms,
Its operating profit was 21.3% higher, or 23.7% firmer in constant currency, while free cash flow almost doubled to $391m in the period.
Earnings per share before exceptional items totalled 5.8 US cents, and basic earnings per share were 8.6 cents.
The firm's net debt-to-EBITDA ratio was 2.2x, compared to 3.2x as at December 2018.
"Today I am pleased to announce another set of strong results which further demonstrate our ongoing ability to deliver against the opportunities offered by the markets in which we operate," said chief executive officer Raghunath Mandava.
"Our financial performance in the third quarter was strong as we delivered double-digit revenue growth in both reported and constant currency.
"Revenue growth accelerated in the quarter to 14.2%, as a result of improved performance in the Rest of Africa, supported by solid results in Nigeria and East Africa."
Mandava explained that revenue growth continued to be broad-based across voice, data and mobile money, with the continued addition of customers contributing to an increase in voice revenue.
"We are also increasingly seeing the success of our strategy to lead in the roll-out of our modernised 4G networks, with more than 40% increase in data revenues for the quarter.
"Alongside this, a focus on increasing the number of use cases through international partnerships for our mobile money offer as well as increasing the distribution footprint have helped gain further acceptance of airtel money.
"On a market specific basis, Nigeria has been leading our growth with double digit voice revenue growth and over 70% data growth as a result of our lead in 4G rollouts and the huge data capacities we are creating."
Mandava added that Airtel Africa was operating in "dynamic, underpenetrated" markets, with opportunities for continued growth.
"These results give me confidence that we have the right strategy to continue to deliver against these opportunities."
At 1000 GMT, shares in Airtel Africa were up 2.28% at 72.62p.
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