Airtel Africa revenues up double digits in Q1

Telecommunications group Airtel Africa said on Thursday that first-quarter revenues had grown by double digits amid margin and earnings progression and a further strengthening of its balance sheet.

Airtel Africa posted a 13% increase in reported currency revenues to $1.25bn, with total revenues for mobile services and mobile money services growing by 18.3% in Nigeria, 14.1% in East Africa, and 11.7% in Francophone Africa.

Revenue improved in constant currency across all four of the group's reporting segments, with mobile services revenue up 14.2%, voice revenue up 11.3%, data revenue up 19.8%, and mobile money revenue 26.5% higher.

As a result, operating profits increased 20.6% to $425.0m, profits after tax improved 25.3% to $178.0m, underlying earnings grew 14.9% in reported currency to $614.0m and EBITDA margins expanded 78 basis points in reported currency terms to 48.8%. Basic earnings per share increased 31% to 4.4 cents.

Airtel added that operating free cash flow grew by 10.3% to $473.0m, while net cash generated from operating activities reduced by 13.2% to $388.0m, principally due to increased cash tax payments from both higher taxes on declared dividends and increased taxable profits.

However, Airtel also cautioned that it had faced headwinds from outbound voice call barring for customers who had not yet registered their National Identification Numbers in Nigeria and the loss of site sharing revenue in those OpCos where it recently sold towers.

"Inflation is also having an impact on our cost base, particularly on energy costs, but our continued efficiency drives have ensured that we have still been able to increase our margins, albeit at a slightly slower rate," said chief executive Segun Ogunsanya.

"We continue to target growth ahead of the market this year and, despite inflationary pressures, our continued focus on cost efficiencies should also support margin resilience. Longer term, the opportunities for sustainable profitable growth stemming from our underpenetrated markets for each of mobile voice, data, and mobile money services remain hugely attractive, and we are confident of continuing to deliver on our growth strategy," added Ogunsanya.

As of 0825 BST, Airtel Africa shares were down 8.13% at 157.0p.

Reporting by Iain Gilbert at Sharecast.com