Airtel Africa on Thursday reported a reduced (nine-month) profit of $801 million, down from $864 million in the previous year. Despite growing its customer base and revenue, expenses increased and net finance costs jumped, leading to a decline in gross profit.
However, profit after tax for the group was $523 million, which is 1.7% higher than was reported in the preceding year.
As the firm’s customer base increased by 10.1% to 138.5 million, average revenue per user (ARPU) also grew by 7.2%, according to reporting from Market Screener.
Airtel Africa recorded revenue growth of 12% to $3.91 billion from $3.49 billion in the preceding year. but expenses increased by 12% to $2.00 billion from $1.80 billion. This together with a 78% leap in net financing costs ($519 million from $291 million in 2021), cost the company what would have amounted to record profit. Net financing cost is the difference between the cost of financing the purchase of an asset and the money the asset brings back into the business. Among other things, Aritel acquired new spectrum in Nigeria (5G), the DRC, Tanzania, Zambia and Kenya over the nine-month period reported.
Nigeria remains Airtel Africa’s largest market, growing by 20.9%, followed by East Africa with 11.9%, and 11.8% from francophone Africa. Across the Group revenue increased by 15.9%, with voice revenue growing by 12.7% and trailing data revenue growing 22.3%.
Mobile Money revenue grew by 29.8%, driven by a strong 32.5% performance in East Africa and 21.7% in Francophone Africa.
Despite launching Smartcash in Nigeria in July 2022, the group did not report revenue details from its foray into mobile money in Nigeria, perhaps opting to pursue a more cautious approach to enter Nigeria’s bank-dominated payments market.
The London-listed company said its revenue performance was impacted by voice customer bans in Nigeria, and the loss of tower-sharing revenues following the sale of towers in Tanzania, Madagascar and Malawi in the last half of 2022.