Airtel’s nine-month profit surges 97% to $514 million on post-Covid data boom

Airtel Africa recorded an earnings spike that helped its after-tax profit almost double to more than half a billion dollars in the nine months to December, according to its unaudited earnings report issued Friday.

Airtel jumped 9.99 per cent to N1,398 per unit in Lagos at 10:54 WAT in Lagos on Friday, following the news.

Revenue leapt 21.7 per cent to $3.5 billion, drawing support from its data business, whose contribution to turnover in constant currency approached one-third of Airtel’s turnover.

A rapid acceptance of mobile money services in its Nigerian, East African and Francophone Africa markets means earnings from that income source, now at $406 million, accelerated at the rate 37.2 per cent when set beside the figure posted a year earlier.

The future of earnings for the telco will be substantially shaped by its mobile money business which, having been spun off from its regular operation after hitting a valuation of $2.65 billion last March, pooled $550 million from investors as varied as Mastercard, Qatar Investment Authority, Chimera Investment LLC and San Francisco-based TPG in less than nine months.

Profit before tax for the period stood at $894 million compared to the $482 million posted in the relative period of 2020.

Profit after tax spiralled by 97.3 per cent to $514 million. It was $261 million a year earlier.

“We have also seen further improvement in our customer growth trends for the Group with Nigeria returning to strong customer growth,” said CEO Segun Ogunsanya.

That followed “a period affected by the implementation of new ‘know your customer’ requirements, posting 1.9 million net additions in the third quarter, taking total group customer additions to 3.1 million,” he added.

Analysts, including Goldman Sachs, Bank of America, Barclays and Chapel Hill Denham, expect Airtel’s revenue to touch $4.1 billion for financial year 2022.

Now Nigeria’s most valuable company in terms of open market worth, the mobile network operator last week outpaced Dangote Cement to reach that milestone, with the remarkable financials expected to pull hefty buyers’ interest in the market on Friday, helping strengthen its hold on the top spot.

In November, Airtel and rival MTN Nigeria got an approval-in-principle from regulator Central Bank of Nigeria to run payment service banks, hoping to leverage their broadband connectivity strength to penetrate rural markets and drive inclusion, a sore point for conventional banks who risk losing income to the fierce competition the development will engender.