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Airtel Africa Plc. – a subsidiary of Bharti Airtel – has released its financial results for the six-month period ended September 30, 2020, showing double-digit revenue growth despite the widespread COVID-19 disruption on many businesses. The results, released on Friday on the Nigerian Stock Exchange (NSE) website, shows the telecommunications company's revenue on reported currency basis grew by 10.7 per cent to $1.815 billion in the first half of its current fiscal year.  

Airtel Africa, which operates across 14 African countries, with Nigeria as its biggest market, said revenue growth was recorded across all the regions. In Nigeria, the company's revenue was up 20.2 per cent in the half-year period, while growing by 21.9 per cent in East Africa and rising 4.4 per cent in Francophone Africa.

“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,” said Raghunath Mandava, Airtel Africa’s CEO. “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."

The telco said its strong performance amid the ongoing pandemic demonstrates Airtel Africa's resilience and the effectiveness of its strategy, which is aimed at capturing growth opportunities in Africa’s fast-growing markets where the penetration of mobile and banking services remains low.

While growing its customer base by 12 per cent to 116.4 million in the six-month period, Airtel Africa's revenue from voice calls rose by 7 per cent; data revenue was also up 33.4 per cent and revenue from mobile money grew by 30.4 per cent in constant currency terms. The telco said growth numbers in the report are provided on constant currency exchange rate basis, which it uses to measure the organic performance of the Group.

Constant currency refers to a fixed exchange rate that eliminates fluctuations when calculating financial performance. Figures that are based on reported currency are where its assets and liabilities are translated into US dollar at the prevailing exchange rates, except for the statements of profit and loss that are based on monthly average exchange rates.

Airtel Africa’s operating profit for the half-year period was $472 million, up by 19.5 per cent, as a result of strong revenue growth and lower operating expenditures. Operating profit in constant currency grew by 28.3 per cent.

While its operating profit, which represents the profit from core business operations before taking into account interest and taxes, grew by double digits, profit after tax (PAT) fell by 36.6 per cent to $145 million. The PAT decline was largely due to the recognition of a one-off gain of $72 million related to the expired indemnity to certain pre-IPO investors in the half-year period ended September 30, 2019, as well as higher finance costs and tax in the current period.

However, the company said without recognising the exceptional items and one-off derivative gain of $46 million in the prior period, PAT increased by 31.8 per cent.

The company disclosed that its half-year earnings before interest, tax, depreciation and amortization (EBITDA) increased by 19.3 per cent to $812 million, compared to $719 million reported in a similar period in 2019. Its EBITDA margin – a measure of a company's operating profit as a percentage of its revenue – increased by 110 basis points (bps) in constant currency to 44.7 per cent.

Airtel Africa said it delivered lower earnings per share (EPS) of $3 in the current reporting year, down 52.9 per cent largely as a result of the exceptional items and a one-off derivative gain incurred in the prior year. Excluding these one-off benefits, basic EPS would have been up 19 per cent, the company said.

The telco, whose primary listing is on the London Stock Exchange (LSE), debuted its cross-border listing on the NSE in July 2019. The company announced an interim dividend of $1.5¢ per share in line with its new progressive dividend policy. As at 11.30 GMT on Friday, Airtel Africa’s stock price on the NSE remained flat at N410.2 per share.