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Airtel Africa’s Q3 profit plunges by $30m despite improved earnings

Airtel announces N363 per share IPO on NSE

Airtel Africa has posted a negative growth of $30 million (about N10.875 billion) or 22.6% in its after-tax profit for the 3rd quarter ended 31st December, 2019 year-on-year despite expansion in its revenue.

In its financial results published on the website of the Nigerian Stock Exchange (NSE) today, the telco reported a 12.8% rise in its Revenue, which leapt to $883 million in the period under review compared to the $783 million posted in the corresponding period of 2018.

According to the firm, the growth had been largely driven by improved performance in the ‘Rest of Africa’ region, boosted by spectacular results in Nigeria and East Africa

“This is now the eighth consecutive quarter that we have delivered double-digit revenue growth and EBITDA margin expansion in constant currency,” Raghunath Mandava, Airtel’s Chief Executive Officer, said.

Voice Revenue grew by 4%, climbing up from $487 million at Q3 2018 to $506 million in the corresponding period of 2019.

Data Revenue similarly appreciated, in this case by 39.8% from $174 million at Q3 2018 to $243 million at Q4 2019.

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Mobile Money Revenue soared from $64 million at Q3 2018 to $82 million in the period under review, translating to 27.5% growth.

Profit Before Tax (PBT) surged by 77.5% to $186 million at Q3 2019 from $105 million in the same period the year before.

However, Profit After Tax (PAT) shrank from $133 million at Q3 2019 from to $103 million at Q3 2019, representing 22.6% decline.

Principally responsible for the plunge in its after-tax profit was the dramatic spike in its tax expense by 618.5% from $13 million at Q3 2018 to $95 million at Q4 2019.

Its Basic Earnings Per Share (EPS) plummeted from 4.8 Cents at Q3 2018 to 2.4 Cents in the review period, signalling a 49.5% fall.

Airtel Africa, the African arm of India’s Bharti Airtel, debuted simultaneously on the Nigerian bourse and London Stock Exchange (LSE) last June after an Initial Public Offering (IPO) that raised about $750 million for the firm.

Africa has been tremendously favourable to the company, whose Indian operations has been confronted with a series of financial upheavals over the years.

Its customer base in Africa currently stands at 107.1 million. 32.9 million of which are data users.

Its average revenue per user at Q3 2019 was $2.8. It has presence in 14 African countries at the moment.

Airtel Africa currently trades on the floor of the NSE at N298.9 per share and at the LSE at 72.10 Cents.

Earnings Per Share is the profit that each unit of a company’s ordinary shares  yields  during a particular period. It is simply calculated by dividing the Profit After Tax by the company’s total outstanding shares.  Increase in a company’s EPS often reflects an improvement in its bottom-line while a fall, on the other hand, indicates a declining profit.

 

Ronald Adamolekun

Ronald Adamolekun is a creative writer with a mixed bag of experience in fields as diverse as data journalism, financial reporting and editing.
Ronald Adamolekun

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Ronald Adamolekun

Ronald Adamolekun is a creative writer with a mixed bag of experience in fields as diverse as data journalism, financial reporting and editing.

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