In Short:
Bharti Airtel’s Africa business saw its profit drop 65% to $48 million for the second quarter due to currency issues in Nigeria. Revenue also declined by 2.6% to $1.21 billion. Despite these challenges, the company turned a profit of $79 million over the first half of the year, compared to a loss last year. Customer growth continues, with increased data usage and smartphone adoption.
Bharti Airtel’s Africa division has disclosed a consolidated profit of $48 million for the second fiscal quarter, representing a significant decline of 65% compared to the $138 million profit realized during the same period last year. This decrease is primarily attributed to foreign exchange challenges, notably including the devaluation of the Nigerian naira.
Quarterly Performance
The consolidated revenue for the quarter ended September 2024 fell by 2.6% year-on-year, totaling $1.21 billion, down from $1.24 billion in the corresponding quarter of the previous fiscal year, also impacted by currency devaluation.
Half-Yearly Overview
On a half-yearly basis, Airtel reported a profit of $79 million, a notable improvement from a loss of $13 million in the same timeframe last year. However, revenues declined by 9.7%, reaching $2.37 billion compared to $2.62 billion in the previous period.
The company stated that the profit after tax of $79 million was adversely affected by $151 million in exceptional derivative and foreign exchange losses (net of tax), which resulted from the depreciation of the Nigerian naira during the reported period.
Operational Insights
Airtel Africa also highlighted that the considerable rise in fuel prices across its markets, coupled with a diminished contribution from Nigeria following the naira devaluation, led to a decline in EBITDA margins, which fell to 45.8% from 49.6% during the first half of fiscal year 2024.
Dividends and Share Buyback
The board has declared an interim dividend of 2.6 cents per share, marking a 9% increase and aligning with the company’s progressive dividend policy. The ongoing $100 million share buyback has seen the acquisition of 61 million shares for a total consideration of $88 million as of the end of September 2024.
Future Outlook
Commenting on the prospects, Sunil Taldar, Chief Executive Officer of Airtel Africa, stated, “The scale of the opportunity across our markets remains substantial. A young and fast-growing population, combined with low levels of SIM and banking penetration on one side, and increasing smartphone and digital payment adoption across our existing base on the other, provides a unique opportunity to leverage our extensive infrastructure for sustained growth in Sub-Saharan Africa.”
Customer Metrics
In terms of operational metrics, the total customer base has increased by 6.1%, reaching 156.6 million. Data customer penetration continues to grow, with a 10.4% rise in data customers to 66.0 million. Furthermore, data usage per customer surged by 30.9% to 6.6 GBs, alongside an increase in smartphone penetration, which rose by 5.3% to reach 42.9%.
However, the average revenue per user (ARPU) for the September quarter decreased to $2.6, down from $2.9 in the same period last year.
