Airtel’s nine-month profit down by 21% amid higher costs

Airtel Africa Plc Friday said its profit after tax for the nine-month period ended December 2020 contracted by 21.1 per cent despite a spike in turnover, citing higher finance costs, tax and exceptional benefits.

Revenue jumped to $2.870 billion, 13.8 per cent higher when set beside the $2.552 billion posted in the corresponding period of 2019, the financials of the wireless operator published by the Nigerian Stock Exchange (NSE) showed.

Earnings were supported by an expansion of 11 per cent in customer base to 118.9 million on the continent, with deepening in mobile data (customer base up by 23.5 per cent) and mobile money services (customer base up by 29 per cent).

Nigeria, Airtel’s biggest market in Africa, reported a 21.6 per cent growth in the period, almost equalling that of the entire East Africa and nearly three times that of Francophone Africa.

Earnings before income tax, depreciation and amortisation lifted to $1.297 billion from $1.118 billion, signalling a 16 per cent rise.

Profit before tax fell 3.8 per cent to $482 million from $501 million while after-tax profit declined by 21.1 per cent from $331 million to $261 million.

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On the expenditure side, net finance costs, which represent the cost, interest and other charges associated with borrowing, escalated from $225 million to $318 million.

“Our rollout into rural markets, along with robust customer growth, helped voice grow 10%, while data and mobile money continued to be growth engines, with over 30% growth,” said Raghunath Mandava, Airtel Africa’s chief executive.

“While the Covid-19 pandemic has had little impact on our most recent quarter, we remain vigilant about the recent news flow around new strains of the virus and further actions by governments to minimise contagion in our countries of operation.