Airtel Africa Q3 net profit slumps nearly 21% to $103 million; revenue rises 14.2% to $883 million

New Delhi: Bharti Airtel’s Africa unit, Airtel Africa, on Tuesday posted about 21 percent fall in net profit for the third quarter ended December 2019 at $103 million (around Rs 735 crore). Airtel Africa said that the group’s parent company has raised $3 billion in capital through a mix of of qualified institutional equity placement and convertible bond offerings. The firm also said that these activities have “reduced the level of uncertainty about the ability of the group’s intermediate parent company to comply” with the recent Supreme Court judgement on statutory dues. “As a result, the directors have concluded that the previously highlighted material uncertainty around the 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,” it added. [caption id=“attachment_4546351” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] Airtel Africa’s net profit for quarter ended December 2019 was 20.9 percent lower in constant currency terms at $103 million on a year-on-year basis. However, the revenue for the quarter at $883 million was 14.2 percent higher (on constant currency basis) and 12.8 percent higher (on reported basis), helped by broad-based growth across voice, data and mobile money. The difference between reported currency and constant currency growth rates is on account of currency movements. “Revenue increased by 9.9 percent to $2,522 million for the nine-month period ended 31 December, 2019, with Q3 FY20 revenue growth increasing to 12.8 percent,” the statement added. Growth was recorded across all services, with revenue in voice, data and mobile money up by 3.9 percent, 39 percent and 40.4 percent, respectively, in constant currency. Airtel Africa CEO Raghunath Mandava said, “Revenue growth accelerated in Q3 to 14.2 percent as a result of improved performance in the Rest of Africa, supported by solid results in Nigeria and East Africa. This is now the eighth consecutive quarter that we have delivered double digit revenue growth and EBITDA margin expansion in constant currency.” In its financial review, the company noted that the total tax charge for the period was $170 million, as compared to a tax credit of $111 million in the same period last year, as a result of higher operating profit and withholding tax on dividends, as Airtel Nigeria - its largest and most profitable market - declared a first dividend. “In addition, the prior year period benefitted from one-off items which included deferred tax recognition in Nigeria of $170 million and a reversal of tax provision of $55 million,” it said. The results come at a time when, back home, telecom companies owe the government Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges. These liabilities arose after the Supreme Court in October last year held that non-core revenues have to be considered for calculating statutory dues. In the case of Bharti Airtel, the liabilities added up to nearly Rs 35,586 crore, of which Rs 21,682 crore is licence fee and another Rs 13,904.01 crore is the spectrum usage charge dues (not including the dues of Telenor and Tata Teleservices). Bharti Airtel, Vodafone Idea Ltd, and Tata Teleservices have, meanwhile, jointly filed a modification application in the Supreme Court asking for more time to pay the statutory dues.