Companies

Airtel parent profit falls to Sh33 billion

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Airtel shop in Kenya. FILE PHOTO | NMG

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Summary

  • Airtel Africa's sales jumped 9.9 percent to $2.5 billion (Sh252.2 billion) but its earnings were lower because it paid higher taxes in its Nigerian operations.
  • The firm’s financials show that data revenue accounted for 25.2 percent of total sales of $891 million (Sh89 billion) in East Africa in the review period.
  • The higher internet revenue growth was mainly driven by Kenya, Malawi and Zambia as a result of increased 4G data usage, which was up by almost four times, Airtel Africa said.

Airtel Kenya’s parent company Airtel Africa has posted a 2.2 percent net profit decline to $331 million (Sh33.1 billion) in the nine months ended December on the back of higher taxation.

The multinational’s sales jumped 9.9 percent to $2.5 billion (Sh252.2 billion) but its earnings were lower because it paid higher taxes in its Nigerian operations.

“The total tax charge for the period was $170 million (Sh17 billion) as compared to a tax credit of $111 million (Sh11.1 billion) in the same period last year … as Airtel Nigeria, our largest and most profitable market, declared a first dividend,” the firm said in a trading update.

The firm’s financials show that data revenue accounted for 25.2 percent of total sales of $891 million (Sh89 billion) in East Africa in the review period.

The higher internet revenue growth was mainly driven by Kenya, Malawi and Zambia as a result of increased 4G data usage, which was up by almost four times, Airtel Africa said.

Mobile money revenue in the East Africa region increased 44.1 percent in reported currency to $155 million (Sh15.5 billion).

The firm indicated that the growth was driven by customer base growth of 19.9 percent and transaction value per customer growth of 23.1 percent.

“We continued to expand the mobile money distribution network (increasing the number of agents, kiosks and Airtel Money branches),” the multinational said.

In Kenya, the multinational’s local subsidiary is set to merge with Telkom Kenya in a business combination that is expected to give them a better chance of competing against market leader Safaricom.

In terms of network infrastructure, Safaricom #ticker:SCOM had the highest number of frequencies at 82.5 as of 2018, according to latest available disclosures.

It was followed by Telkom which had 48.5, Airtel (40) and Jamii Telecom (17).

Operating as one, Airtel and Telkom will match Safaricom’s capacity on most spectrum bands.

Airtel says its strategy of cutting prices is helping it to acquire more customers.