Airtel Africa Plc on Friday release its first quarter financial statement for the period ended 30 June 2020 to the Nigerian Stock Exchange and the investing public. The company’s financial calendar does not follow the normal year calendar.
Airtel Africa posted a 56.9% drop in profit after tax despite a 6.9% rise in revenue. The company’s revenue rose to $851 million from $769 million in Q1 2019, while the profit after tax slumped to $57 million from $132 million last year.
The company’s revenue grew by 6.9%, with constant currency growth of 13.0%. The constant currency growth of 13.0% was partially offset by currency devaluation, mainly in Nigeria (6.9%), Zambia (28.3%) and Kenya (4.4%). The revenue growth was largely driven by the growth of our customer base, up by 11.8% to 111.5million and Average Revenue Per User (ARPU) growth of 1.6% in constant currency.
According to the report, Revenue growth was recorded across all the regions: Nigeria up 17.1%, East Africa up 17.5% and Francophone Africa up 2.2%. Notably, revenue growth was broad based across all our key segments: voice up 2.2%, data up 35.7% and mobile money up 26.3% in constant currency terms.
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According to Airtel Africa, 56.9% drop in profit in after tax was largely as a result of a one-off gain of $72m related to the expired indemnity to certain pre-IPO investors in the same period last year, higher finance costs and tax. Excluding one-off benefits in the previous quarter, profit after tax for the quarter reduced by $13m mainly due to higher derivative and exchange loss of $19.4m in Q1 2021.
Free cash flow was $96m, up by 53.5% largely due to the higher underlying EBITDA rising by $27m, reduced interest payments falling by $8m resulting from lower debt and lower capex reduced by $33m partially offset by an increase in cash tax.
Net debt was $3,425m compared to $4,081m in June 2019. The $656m reduction in net debt is due to an increase in cash of $680m from the IPO proceeds and a $122m proceeds from the cancellation of derivatives which was partially offset by interim dividend payment of $113m. As a result, leverage improved to 2.2x at the end of June 2020, from 3.0x at the end of June 2019.