HALF YEAR

Airtel Kenya revenue slows 4.5% on currency devaluation

The global economic slowdown resulted in currencies devaluing across the telco's markets leading to the slow growth

In Summary

•In the whole East Africa region however, performance continued to be strong with 14.1 per cent revenue growth.

•During the period in August 2020, Airtel Africa announced that its subsidiary Airtel Kenya and Telkom Kenya Limited decided to no longer pursue completion of the M&A.

Airtel Kenya Headquarters at Parkside Towers along Mombasa Road/FILE
Airtel Kenya Headquarters at Parkside Towers along Mombasa Road/FILE

Airtel Kenya posted a 4.5 per cent growth in its 2020 half-year results on account of currency devaluations, it said in a statement Monday.

“The global economic slowdown combined with lower oil and commodity prices has resulted in currencies devaluing across our markets leading to the slow growth,” the telco.

In the East Africa region however, performance remained strong with a 14.1 per cent revenue growth in reported currency (currencies of the countries in which the firm  operates) and 21.9 per cent in constant currency (fixed exchange rate).

 

Growth was broad-based across all services and all markets, as five out of six countries delivered more than 20 per cent revenue growth.

Voice revenue was $312million, with a double-digit growth of 12.8 per cent in constant currency as a result of a 13.9 per cent customer base growth and 20.1 per cent growth of voice usage per customer.

Data revenue amounted to $174million, up by 29.6 per cent supported by data customer base growth of 22.9 per cent

In August 2020, Airtel Africa announced that its subsidiary Airtel Kenya and Telkom Kenya Limited decided to no longer pursue completion of the merger and acquisition transaction.

Despite the two telco's respective endeavours to reach a successful closure, the transaction has gone through a very lengthy process which has led the parties to reconsider their stance.

Overall, Airtel Africa posted an 8.8% year-on-year drop in net profit to $88 million in the quarter ended September due to higher expenses.

The company had reported a net profit of $57 million in the quarter ended June.

 

Overall revenue  increased by 10.7 per cent to $1.815 billion, with second quarter revenue growth of 14.3 per cent.

The revenue growth in constant currency was 16.4 per cent in the first half of the year, and 19.6 per cent in the second quarter.

Operating profit increased by 19.5 per cent to $472 million, while free cash flow was $319 million compared to $210 million in the same period last year.

“The first half of our fiscal year included the peak impact of the COVID-19 pandemic in the countries where we operate, in these exceptional circumstances, we atill delivered a strong set of results,” said Raghunath Mandava, CEO, Airtel Africa.

“In Q2, performance in our mobile money business also significantly improved with constant currency revenue growth of 33.9 per cent, as lockdown restrictions were eased and fees on certain transactions, which had been previously waived, were largely reintroduced.”