No longer facing business uncertainty: Airtel Africa

Bharti Airtel no longer faces any uncertainty around its ability to continue as a going concern, having raised $3 billion (Rs 21,240 crore) recently, Airtel Africa said Tuesday.

Bharti’s Africa arm said the recent fundraise by the parent company had reduced the level of uncertainty about Airtel’s ability to comply with the Supreme Court’s verdict on adjusted gross revenue (AGR) dues.

“The directors have concluded that the previously highlighted material uncertainty around the (Bharti) Group’s ability to continue as a going concern no longer exists, and that the Group has adequate committed and non-committed facilities to operate as a going concern,” Airtel Africa in its December quarter earnings report.

Earlier this month, Airtel raised $3 billion through a mix of private sale of shares and an overseas issue of convertible bonds to build a war chest for clearing its over Rs 35,500 crore statutory AGR dues to the government.

Last November, Airtel had raised doubts over its ability to continue as a going concern while posting an unprecedented Rs 23,045 crore loss in the July-September quarter, after provisioning for AGR dues after the top court’s October 24 ruling.

Airtel shares closed 4.55% lower at Rs 490.9 on BSE.

Airtel Africa’s reassurances though came on a day Bharti’s Africa unit suffered a 27% on-year fall in net profit to $90 million (Rs 641.52 crore) for the December-end quarter, stung by heavy taxes and higher net finance and depreciation & amortisation ((D&A) costs. The company though reported strong customer adds, higher data consumption and a rise in the transaction value in its Airtel Money platform.

Its December quarter revenue climbed 13% on-year and 4.62% sequentially to $883 million, driven by double-digit growth in Nigeria, East Africa and Rest of Africa markets.

Airtel Africa’s “profit after tax (on reported basis) at $90.2 million, was a decrease of $33 million compared to the prior year, largely contributed by higher tax expense,” the company said.

Total tax charge for the period, it said, “was $83 million as compared to a tax credit of $28 million” a year ago, due to “higher operating profit and withholding tax on dividends on dividends as Airtel Nigeria – the company’s most profitable African market -- declared a first dividend”.

“Revenue growth continues to be broad-based across voice, data and mobile money…we continued to add customers, up 9.4% on year (to 107.1 million), contributing to the increase in voice revenue,” Airtel Africa CEO Raghu Mandava, said in a media statement.

The profitable Nigeria market, he said, has been leading the charge, with “double-digit voice revenue growth and over 70% data growth” as a result Airtel’s lead in 4G rollouts and creation of huge data capacities.

Airtel Africa’s data revenue jumped 41.3% on-year, resulting in a near 58% growth in data usage, while mobile money revenue increased 30.6%, driven by customer growth and expansion in distribution infrastructure.

Its Airtel Money customer base swelled 20.5% on-year to 16.6 million, boosting total transaction value on its mobile money platform by nearly 32% on-year to $8.57 billion.

Airtel Africa’s average revenue per user – a key performance metric – was virtually unchanged sequentially though up 3.5% on-year at $2.8. Voice ARPU fell 3.9% on-year to $1.6 but was unchanged sequentially.

Data ARPU jumped 23.6% on-year and 3.7% on-quarter to $2.6, propelled by expansion in data customer base amid rising smartphone penetration and an upsurge in data consumption by users who went 4G.

Airtel Africa’s total expenses rose 2% on-year to $625 million due to higher network operating costs, access charges and D&A costs.