Bharti Airtel saw its overall revenues in Africa increase by 11.2% to $3,422 million, with fourth quarter revenue growth up by 15.1% according to its financial results for the year ended March 31, 2020. Revenue in constant currency grew by 13.8% in the full year and 17.9% in the fourth quarter while growth was recorded across all business segments, with voice revenue up by 5.2%, data by 39% and mobile money by 37.2%.
The telco’s customer base increased by 11.9% to stand at 110.6 million while operating profit grew by 22.8% to $901 million and increased by 25.4% in constant currency terms.
Airtel has operations Kenya, Uganda, Tanzania, Nigeria, Niger, Chad, Rwanda, DRC, Gabon, Congo Brazzaville, Zambia, Malawi, Madagascar, and Seychelles.
According to the results, the telco’s free cash flow was $453 million, which is more than double compared to the same period last year.
Raghunath Mandava, the Airtel Africa CEO, commented on the trading update: “These are a strong set of results which delivered against our aspirations set out at the time of the IPO, with performance sequentially improving during the year. Revenue increased by 11.2%, 13.8% in constant currency, and underlying EBITDA by 13.8%, 16.3% in constant currency, to a reported $1,515 million, underpinned by significant improvement in our Free cash flow generation and reduced leverage. These results also demonstrate the strength and resilience of our business and the effectiveness of our strategy – with all three business services, voice, data and mobile money, contributing to revenue growth. We have also continued to invest in future growth opportunities as we expanded our distribution, modernised and expanded our network with 65% of sites now on 4G, acquired new spectrum in Nigeria, Tanzania, Malawi and Chad, and entered into strategic partnerships in our mobile money business.”
“More recently, the markets where we operate have begun to be impacted by the COVID-19 and the related actions that governments have implemented to reduce the risk of contagion. Our priority has been to keep our colleagues, suppliers and customers safe whilst supporting the communities in which we operate. Telecoms businesses provide strategically essential services to ensure the functioning of economies and communities and are, therefore, more resilient compared to some other sectors. In Africa, the spread of the COVID-19 has lagged the rest of the world and, therefore, it is difficult to precisely forecast what the impact of this will be on customers and business. However, our performance during the month of April has been resilient as the business continued to deliver constant currency revenue growth, although at a lower rate.”
Reported revenue grew by 11.2% as 13.8% constant currency growth was partially offset by currency devaluation. Airtel’s strong performance in Africa was largely driven by the growth of its subscriber base which was up by 11.9% to stand at 110.6 million, as well as a 3.3% growth in ARPU.
In terms of performance of individual subsidiaries and across the regions, Nigeria and East Africa continued to deliver strong performance, while performance in Francophone Africa continued to improve with revenue up 4.1% in the fourth quarter of 2020.
Revenue growth was broadly based across all key segments: voice up 5.2%, data up 39.0% and mobile money up 37.2% in constant currency terms. The reported operating profit was $901 million, up by 22.8% and 25.4% in constant currency. According to the telco, this was the result of strong revenue growth with broadly stable operating expenditures as a percentage of revenue.
Net finance costs increased by $18 million driven by higher finance costs which more than offset reduced interest costs of $64 million as a result of lower debt. The increase in other finance costs was primarily driven by higher impact of devaluation on foreign exchange denominated liabilities largely driven by $75 million increase in the fourth quarter of 2020 as a result of the devaluation of Nigerian naira, the Kenyan and Ugandan shilling, as well as the Zambian kwacha.
During the previous quarter, Airtel Nigeria acquired from Intercellular Nigeria the 10 MHz spectrum in the 900 band for $70 million. In June 2019, Airtel Nigeria also acquired a spectrum of 20 MHz in 2600 band.
Airtel Tanzania has been allocated an additional spectrum of 10 MHz in the 1800 band for an annual fee of $600,000, thereby bringing the telco to 22.5 MHz of spectrum in the 1800 band. Airtel Tanzania has been authorized by the TCRA (Tanzania Communications Regulatory Authority) to use 10 MHz in the 700 band for eight months from October 2019. The licence of 700 band will be issued post completion of a total of $12 million payment to the regulatory authorities in June 2020.
Additional spectrum has been acquired in Chad (5 MHz in 1800 band) and Malawi (10 MHz in 2100 and 5 MHz in 1800 band) during the period.
In February 2019, Airtel TV launched in Uganda. The TV platform currently has more than half a million installations across Nigeria, Uganda and Zambia. The telco also launched Hollywood and premium international content on its VoD platform, with movies and TV shows from MGM, Lionsgate, BBC and NBC Universal as well as local content, primarily Nollywood.