Airtel operating profit up 52% in East Africa

Airtel’s operations in East Africa have recorded approx.52% surge in operating profits to US$279m for the half year period ending Sep.30 riding on a balanced growth of almost all its product segments.

The company’s East Africa business region includes Kenya, Malawi, Rwanda, Tanzania, Uganda and Zambia. Though Airtel Money recorded the highest growth in revenue (43.9%) to post US$190million, data and voice revenue remains the biggest contributors of the company’s revenue stream.

The company recorded a 24.8% growth in revenue to US$217million while voice revenues recorded a 20.7% to US$377million during the same period under review.

Airtel’s operations in the region recorded a 24.7% growth in revenue to US$822million during the period.

Mobile money revenue accounted for 23.1% of total East Africa revenue, up 3.1 percentage points from 20.0% in the prior period.  The slowdown in mobile money revenue growth in the second quarter of the year was due to the implementation of additional levies by the Tanzania government on mobile money withdrawal and person to person transactions from 15 July 2021, which were subsequently revised downwards in early September 2021.

Across its 14 African markets, Airtel Africa saw its operating profit up 55.1% to US$732million while profit after tax more than doubled to US$335m, largely due to higher profit before tax which more than offset the associated increase in tax charges.

Commenting on the performance, Segun Ogunsanya, chief executive officer, Airtel Africa said, their first half financial performance has been strong.

“The first half of last year, and especially Q1, was impacted by the start of Covid, but even after adjusting for these effects, our revenue growth rates for the half year for the Group and all our service segments are ahead of our FY’21 revenue growth trends, and in reported terms, these are all in strong double digits,” he said.

Ogunsanya, however, said the risks from Covid still remain, with sub-Saharan Africa continuing to experience a third wave of the pandemic.

“Governments continue to implement balanced measures of lockdowns and restrictions accordingly. But vaccination levels remain low, and we continue to monitor the situation for potential impacts on economies and consumers,” he said.

Ogunsanya said Airtel now expects a boost from growing demand for mobile broadband and phone-based financial services, after posting rapid growth in first-half earnings.

“Most of these folks are mobile first, mobile only generation. They require mobile broadband to participate fully in the digital world,” he told Reuters, referring to the continent’s generally youthful population.

The provision of fourth generation (4G) internet network in its markets has been a key driver of revenue growth, Ogunsanya said. Mobile financial services, including cash transfers and payments, has also been fuelling growth.

“More than half of adults in Africa don’t have bank accounts. That shows the scope available in driving the mobile money business,” he said.

Airtel plans to cut its net greenhouse gas emissions to zero before 2050 and they will be requiring their suppliers, including cellular towers, to comply with the plan.

“We are convinced it is the right thing to do. It is the best thing to do for the environment,” he said.

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