Strong Customer Growth in Nigeria Buoys Airtel Africa 9-month Results

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By Dipo Olowookere

After getting battered by the implementation of new know your customer requirements by the Nigerian authorities, Airtel Africa is beginning to see an improvement in its customer base.

In its unaudited financial statements for nine months ended December 31, 2021, the leading telco said it recorded 1.9 million net additions in the third quarter, taking total group customer additions to 3.1 million.

This supported that 21.7 per cent revenue growth to $3.492 million from $2.850 million achieved in the same period of 2020.

A closer look into the revenue line showed that voice accounted for $1.747 million compared with $1.537 million in the first nine months of the preceding accounting year, while data contributed $1.127 million as against $842 million of the earlier period, with mobile money accounting for $406 million versus $291 million and other revenue contributing $306 million as against $255 million in 2020.

Business Post observed that the revenue of Airtel Africa grew partly because of a one-time exceptional revenue of $20 million relating to a settlement in the Niger Republic.

Excluding this, revenue grew by 22.5 per cent in reported currency and by 24.8 per cent in constant currency, with the difference relating to currency devaluations, mainly in the Nigerian naira (6.3 per cent) and the Malawian kwacha (8.2 per cent), in turn partially offset by appreciation in the Ugandan shilling (4.3 per cent) and the Central African franc (2.0 per cent).

Revenue growth for the 9 months period benefitted from a weakened performance in the first quarter of the prior year during the peak period of COVID-19 related restrictions across the region. However, even after adjusting for this, group revenue growth rates were ahead of FY’21.

“A strong third quarter has contributed to a pleasing nine-month financial performance across all key metrics.

“Operationally, we have continued to execute on our network and distribution expansion plans, driving continued strong growth in ARPUs across voice, data and mobile money.

“We have also seen further improvement in our customer growth trends for the group with Nigeria returning to strong customer growth,” the chief executive of Airtel Africa, Mr Segun Ogunsanya, stated.

In the period under review, the operating profit of the firm grew by 43.1 per cent to $1.146 million in reported currency, while profit after tax almost doubled to $514 million as higher profit before tax more than offset associated tax charges, with the basic earnings per share (EPS) at 11.7 cents, an increase of 113.8 per cent, largely as a result of higher profit.

This good performance excited Mr Ogunsanya, who noted that, “I am particularly pleased with developments in Nigeria, where in November we received approval in principle for both a payment service bank (mobile money) licence and a super-agent licence.”

“We are now working closely with the Central Bank (of Nigeria) to meet all its conditions to receive the final operating licences and commence operations.

“This will enable us to expand our digital financial products and reach the millions of Nigerians that do not have access to traditional financial services,” he assured.

He disclosed that the company “continued to strengthen our balance sheet, with our leverage ratio now 1.4 times underlying EBITDA, thanks to both to continued increases in operating cash flow delivery and to over $550 million of cash that has now been received from minority investments into our mobile money business.”

“We will continue to invest in expanding and evolving our platform to further deepen both financial and digital inclusion across Africa. I continue to see huge growth potential across voice, data and mobile money and our strategy is delivering against this opportunity.

“Our sustained investments in both network and distribution expansion will help to ensure that both the communities and economies across our footprint will continue to benefit from increased and affordable connectivity and financial inclusion.

“We are committed to continuing to improve the delivery of our services to our customers, with sustainability at the heart of our continued purpose to transform lives across Africa,” he added.

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