A man rides a bicycle past an advertisement for Airtel Ghana Ltd. in Accra, Ghana. (Photographer: Ty Wright/Bloomberg)

Airtel Africa’s Ebitda Grows In A Seasonally Weak Quarter

Bharti Airtel Ltd.’s profitable African unit witnessed a growth in its operating income in constant currency terms in the March quarter despite seasonal weakness.

The company’s earnings before interest, tax, depreciation and amortisation grew 0.6 percent over the last quarter.

That could largely be attributed to the cost-saving initiatives of the company. Its total costs, excluding access charges, cost of goods and license fees, declined to $280 million from $286 million over the last quarter. That reflected on its margin, which expanded by 70 bps to 44 percent—its highest.

The fourth quarter is considered seasonally weak when spending gets curtailed, coinciding with the start of academic year in schools. Rains in some countries also leads to migration, resulting in lower usage.

On reported currency terms, the African unit’s revenue and Ebitda was $781 million and $344 million, respectively, according to an exchange filing. Capital expenditure during the quarter was $305 million for African operations due to investment in data capacities and network modernisation.

Bharti Airtel continues to gain footing in Africa even as its India business is under pressure.

The company’s average revenue per user declined by 3.4 percent to $2.7 while the churn ratio increased to 5.4 percent. However, this fall was largely offset by an increase in its customer base, which rose to 98.85 million from 97.92 million in the December quarter.

The African unit’s revenue remained largely flat at $781 million on reported currency terms, while its Ebitda grew to $344 million from $339 million in the December quarter.

The African unit’s net debt also declined by five percent to $4 billion due to a fund infusion by the Qatar Investment Authority. Recently, Bharti Airtel raised nearly $1.45 billion from seven global investors to pare debt in its African unit through a fresh issue of shares. The company is also looking to list its African unit on the London Stock Exchange during the 2019-20 fiscal.