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Airtel Africa Records Double-Digits Revenue Growth as Subscribers Hit 118m

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Airtel Africa has announced results for the 9months period ended Dec 2020 showing that revenue increased by 13.8 percent to $2.870bn, according to a filing on the Nigerian Stock Exchange (NSE).

Constant currency underlying revenue growth was 18.6 percent, as growth for the nine months was recorded across all regions, Nigeria up 21.6 percent, East Africa up 23.4 percent and Francophone Africa up 8 percent.

Across all services, voice revenue was up 10.4 percent, data up 31.1 percent and mobile money up 34.2 percent.

Underlying Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) for the nine months was $1.29bn, up 16 percent in reported currency while constant currency underlying EBITDA growth was 22.5 percent.

Underlying EBITDA margin for the nine months was 45.5 percent, up by 118 basis points (bps).

Free cash flow was $466m, up 20 percent compared to the same period last year.

Basic EPS was 5.5 cents, down 36.5 percent, largely due to prior year exceptional items and a one-off derivative gain. Excluding these, basic EPS rose by 19.8 percent.

EPS before exceptional items was 5.0 cents, customer base up 11 percent to 118.9 million with increased penetration across mobile data (customer base up 23.5%) and mobile money services (customer base up 29.0%), while 2.5 million customers were added in Q3’21.

Raghunath Mandava, chief executive officer, Airtel Africa said:

“Our nine-month performance reflects both the resilience of our business model through the Covid-19 pandemic and, for the last six months, a continued improvement in our execution and performance as lockdown restrictions have eased across our countries of operation. I am particularly pleased with our performance in the latest third quarter, which has demonstrated accelerated growth in both revenue and underlying EBITDA in constant currency to 22.8 percent and 28.3 percent respectively.”

Nigerian operations

Following a directive issued by the Nigerian Communications Commission on 15 December 2020 to all Nigerian telecom operators, Airtel Nigeria said it is working with the government to ensure that all subscribers provide their valid National Identification Numbers (NINs) to update SIM registration records.

New customer acquisitions are currently barred until significant progress is made on linking the current active base with verified NINs.

The deadline for customers to register their NIN with their SIM has moved from a provisional date of 30 December 2020 in the initial directive in order to accommodate the logistical challenges involved.

The latest deadline for registration is currently 9 February 2021.

“We have made significant progress on capturing existing NINs and building the database in collaboration with National Identity Management Commission (NIMC). To date, out of Airtel Nigeria’s 44.4 million customers, we have collated NIN information for 21 million mobile customers (47%),” Airtel said.

For Nigeria standalone operations, revenue in reported currency grew by 13.5 percent, while in constant currency revenue grew by 21.6 percent as a result of Nigerian naira devaluation by 7.9 percent (YoY).

Voice revenue continued to grow by double digit to $657m in the nine-month period, up by 14.2 percent in constant currency.

Voice revenue growth was driven by the combination of growing customer base and ARPU.

The customer base increased by 11.5 percent, driven by continued expansion of Airtel’s distribution network and network infrastructure.

Data revenue growth of 35.2 percent in constant currency was driven by 23.6 percent growth in data customers and the 12.2 percent growth in data ARPU.

Data customer penetration was up by 4.1ppts from the previous period and reached 42.4 percent as of December 2020.

The data customer base growth of 23.6 percent was a result of expansion of the 4G network, with 82 percent of total sites now on 4G.

Data usage per customer increased by 49.2 percent and data revenue accounted for 35.1 percent of total revenue in the nine-month period, up by 3.5ppts from 31.6 percent in previous period.

Underlying EBITDA grew by 13.6 percent in reported currency, with constant currency growth of 21.7 percent.

Underlying EBITDA margin during the period was almost flat compared with the previous period.

The slight drop in Q3 underlying EBITDA margin is due to increased operating expenses as a result of higher new sites rollout (1600+ additional sites during the period).

Airtel’s capital expenditure was broadly stable at $178m. Operating free cash flow was $430m, up by 34.2 percent, largely as a result of the growth in underlying EBITDA.

Airtel Africa is a leading provider of telecommunications and mobile money services, with a presence in 14 countries in Africa, primarily in East Africa and Central and West Africa.

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