Airtel Africa has stated that double digit revenue growth recorded in Nigeria (22%) and East Africa (4%) has contributed significantly to strong Q1 results submitted to the Nigerian Stock Exchange (NSE) on Friday.
The results which are the first since its initial public offer (IPO) earlier this month is a strong start to the company’s financial year.
According to the results, Airtel declared that its customer base grew by 9.3 percent to 99.7 million in the first quarter period ended June 30 2019.
The company’s revenue increased to $795.9 million, up 6.9 percent, with constant currency growth of 10.2 percent.
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Statement of the results highlighted that this was the 6th consecutive quarter of double-digit constant currency growth recorded by the company.
Growth was equally recorded across business products as constant currency revenue in voice increased by 3.2 percent.
Data revenue which grew by 36 percent was the company’s largest contributor to growth, as an increasing number of customers relied on high-quality and high-speed LTE network, resulting in a 79 percent growth in data usage, the company said.
Mobile money also appreciated by 41.8 percent. According to Raghunath Mandava, Airtel Africa’s CEO, the mobile money segment is the company’s fastest growing business following an expansion of distribution reach.
Mandava said the results were in line with the company’s expectations. “They are clear evidence of the effectiveness of our strategy across voice, data and mobile money,” he said.
A measure of the company’s operating performance calculated by its underlying earnings before interest, tax, depreciation and amortization (EBITDA) was $347.6 million, up 9.7 percent, while constant currency underlying EBITDA growth was 12.8 percent.
In the same vein, the underlying EBITDA margin in reported currency was 43.7 percent, an increase of 111 bps, while there was an increase of 101 bps in constant currency terms.
EBITDA evaluates a company’s performance without having to factor in financing decisions, accounting decisions or tax environments.
Airtel Africa’s free cash flow for the period under review was $102.4 million, down 29.2 percent. The company attributed it to increased capex for network modernization and rollout of additional sites.
Other factors that contributed to the growth according to Mandava, includes a continuous investment in its 4G network, which has added nearly 1,500 sites.
“Now more than half of our sites are 4G. We also continue to prepare for the launch of our Mobile Money business in Nigeria, securing approval of the brand name, an important step as we await approval for our payment service bank license.
The business continues to show momentum and we are confident of delivering sustained growth across voice, data and mobile money, underpinning our medium-term aspirations for revenue and profit growth,” Mandava assured investors.
Meanwhile bottom line of the company showed mixed performance as profit before tax came in at $167.4 million compared with $80.2 million in the first quarter of 2018 indicating 109 percent growth.
However, the profit after tax (PAT) depreciated by 12.2 percent to $132.2 million in Q1 2019 from 150.6 million in Q1 2018, while earnings per share (EPS) depreciated by 62.2 percent to 4.1 cents from 10.8 cents.