By Victor Akindele
Nigeria’s third-largest mobile network operator, Airtel, generated a total of N122.8 billion (USD341 million) from voice calls, data subscriptions, and other digital services in the last three months. According to the financial statement released by the company’s parent body, Airtel Africa, the Nigerian operation recorded an 8.9 per cent growth in its revenue for the first quarter ended June 30, 2020.
An analysis of the company’s financial performance in the period under review shows that Airtel Nigeria realised N70.9 billion (USD197 million) from voice calls, while data subscriptions fetched the telco of N43.9 billion (USD122 million). A sum of N7.9 billion (USD22 million) was realised from its other services.
Airtel Nigeria’s positive performance lifted the group revenue to record by 6.9 per cent growth in revenue of USD 851 million. The company accounted for 43 per cent of the group’s revenue.
Net profit for the group was USD 57 million, down by 56.9 percent from USD 132 million a year earlier, largely as a result of a one-off gain of USD 72 million related to the expired indemnity to certain pre-IPO investors in the same period last year, higher finance costs and tax. Excluding one-off benefits in the previous quarter, net profit for the quarter fell by USD 13 million, mainly due to a higher derivative and exchange loss of USD 19.4 million in Q1 2021.
Underlying EBITDA increased by 7.9 percent to USD 375 million, with constant currency growth of 14.6 percent. The underlying EBITDA growth was driven by revenue growth of 13 percent and efficiency in operating expenses. Free cash flow was USD 96 million, up by 53.5 percent, largely due to underlying EBITDA rising by USD 27 million, interest payments falling by USD 8 million resulting from lower debt, and CAPEX down by USD 33 million, partially offset by an increase in cash tax.
Commenting on the result, Airtel Africa CEO Raghunath Mandava said: “During last quarter, our business was impacted by the Covid-19 pandemic, as restrictions on movements of people and ways of socialising were introduced to contain the spread of infection.
“In these unprecedented times, we have worked with governments, regulators, partners, and suppliers to keep customers and businesses connected as well as supporting the economies and communities.
“We focussed on expanding and maintaining our network to ensure it could cope with increasing demand, we kept our distribution up and running by increasing the penetration of digital recharges and stock levels, and we expanded our home broadband solutions to ensure customers could work and access entertainment remotely,” he said.
Mandava added that “Covid-19 impacted customer usage pattern, particularly during April, however, as some of these restrictions started to be lifted, customer usage trends in May and June returned to being broadly consistent with pre-COVID-19 trends.
“The Group’s performance generally reflected these trends, with revenue growth accelerating in May, and we ended the quarter with 13% revenue growth and 61 bps of EBITDA margin expansion in constant currency.
“The business showed its resilience even during these unprecedented circumstances with all key business segments - voice, data, and mobile money, and all regions - Nigeria, East Africa and Francophone Africa contributing to growth.”