Revenues, profits rise sharply for Airtel Africa

(Sharecast News) - Airtel Africa reported a sharp rise in both revenue and profit for the quarter ended 30 June on Thursday, underpinned by continued demand for data and mobile money services, as well as easing currency headwinds across its markets. Group revenue rose 24.9% in constant currency and 22.4% in reported terms to $1.42bn, with data and mobile money the standout drivers.

Data revenue surged by 38.1% in constant currency, while mobile money revenue rose 30.3%, reflecting deeper smartphone penetration, growing financial inclusion, and ongoing investments in network infrastructure.

Mobile service revenue climbed by 23.8% in constant currency, while voice revenue increased by 13.9%.

EBITDA grew 29.8% to $679m, lifting the EBITDA margin to 48% from 45.3% a year earlier, helped by stable fuel prices and a cost efficiency programme.

Profit after tax rose sharply to $156m from $31m, supported by a $22m gain linked to the appreciation of the Central African franc.

"The strength of this performance, and the scale of the growth we achieved, reflects the sustained demand for our services and the strength of our business model to meet these demands," said chief executive officer Sunil Taldar.

"Operationally, the acceleration in customer base growth to 9%, and 17.4% growth in our data customers to 75.6m reflects the strong on-ground execution with a relentless focus on digitisation and the simplification of the customer experience."

He highlighted the potential for further growth in mobile money, with the customer base now approaching 46 million, up 16.1% year-on-year.

Annualised transaction value rose 35% to $162bn , while mobile money ARPU increased 11.3% in constant currency.

The group's total customer base rose 9% to 169.4 million, with smartphone penetration increasing by 4.3 percentage points to 45.9%.

Data usage across its network increased 47.4% over the year.

Airtel continued to invest in its network, rolling out over 2,300 new sites during the quarter and extending its fibre network by 2,700 kilometres.

Its 4G population coverage reached 74.7%, up from 71.3% a year earlier.

Capital expenditure for the quarter was $121m, down on the prior period due to timing differences.

The company reaffirmed its full-year capex guidance of between $725m and $750m.

Leverage increased to 2.2x from 1.6x, driven by a $1.3bn rise in lease liabilities linked to tower contract renewals.

However, lease-adjusted leverage remained steady at 0.9x.

The company said it continued its share buyback programme, returning $16.9m to shareholders through the repurchase of 7.1 million shares as of 30 June.

"With smartphone penetration at only 45.9%, we see significant headroom to drive further adoption and play a key role in bridging the digital divide," Taldar added.

"With a strong balance sheet and sustained network investment, I remain confident about our ability to capture the available growth potential across our markets."

At 0934 BST, shares in Airtel Africa were up 7.05% at 196p.

Reporting by Josh White for Sharecast.com.