Airtel Africa Profit Rises As Customer Base Knocks 140 Million Users

Airtel Africa Plc has maintained a strong profit margin which reflects the resilience of its operating model despite inflationary cost pressures as the telecommunication giant continues to magnify its total customer base.

BrandNewsDay reports that Airtel Africa recorded an operating profit of $1.75 billion for the quarter ended March 2023, 20.10 percent up from $1.53 billion in the same period of March 2022. ‘

Earnings before interest taxation depreciation, and amortisation (EBITDA) grew by 17.30 percent to $2.57 billion in March 2023 from $2.31 billion the previous year.

The telecommunication giant generates higher returns from its capital, and there are improvements in the companies’ efficiencies as the return on capital employed (ROCE) increased to 23.30 percent in March 2023 from 22.30 percent as at March 2022.

Total customer base grew by 9.0 percent to 140.0 million, as the penetration of mobile data and mobile money services continued to rise, driving a 16.9 percent increase in data customers to 54.6 million and a 20.4 percent increase in mobile money customers to 31.5 million.

All in all, total revenue spiked by 17.60 percent to $5.25 billion in March 2023 from $4.71 billion as of March 2022.

“Over the last year, the operating environment has been challenging in many ways, yet our strategic focus on providing reliable, affordable and accessible services across our markets has enabled us to sustain our top-line growth momentum. The resilience of our underlying EBITDA margins has shown the effectiveness of our operating model, despite significant inflationary and foreign exchange pressures,” said Olusegun Ogunsanya, chief executive officer, on the trading update.

“Strong customer and ARPU growth over the year demonstrates that demand for our services remains very strong and gives us the confidence to continue investing to support our future growth potential,” said Ogunsanya.

Over the year, Bharti Airtel has invested $500 million on additional spectrum, including 5G, across many of our OpCos which, combined with its capex, will underpin its growth ambitions.

It underpinned its balance sheet with a de-risking strategy through the prepayment of $450 million HoldCo debt in July last year. Leverage was at 1.4x in March 2023, broadly stable despite $500m of spectrum investment during the year.

Capital expenditure increased by 14.0 percent to $748 million, in line with its guidance, as the company continued to invest for future growth. Additionally, it acquired spectrum in Nigeria, the DRC, Tanzania, Zambia and Kenya during the year.

Of course, Airtel Africa felt the pang of the global economic and geopolitical crisis that spilt into the continent as central bankers are forced to devalue the currency to protect their external reserves and raise interest rates for an indeterminable period of time to tame rising inflation.

“Currencies across our footprint have been under pressure, and the impact from the revaluation of our foreign currency-denominated liabilities provided some headwinds in the last financial year,” said Ogunsanya.

“While currency devaluation is not in our control, we have plans to continue to mitigate its impact by growing our revenues at a faster pace than devaluation, with double-digit revenue growth in reported currency delivered this year and as we continue to reduce our foreign currency exposure across our balance sheet,” summed Ogunsanya.