Airtel parent firm defers Ksh.27 billion debt payments to cushion against pandemic

Airtel Kenya parent firm- Airtel Africa has deferred the payment of Sh.27.1 billion worth of debt by 18 to 24 months to strengthen its cash position amidst Covid-19 pandemic.

The deferment on the maturities due in December and January 2021 is geared at retaining the firm’s strong financial position and further conserves cash for the company as it navigates uncertainties emerging from the global health emergency.

“We have identified other ways to conserve cash, reduce costs and mitigate risks from Covid-19. We have conducted a review of our operating expenses, and discretionary spend has to a large extent stopped,” the firm commented on Wednesday.

The firm has however defied the virus to pay out a final Ksh.3.2 ($3 cents) dividend to shareholders on the back of an improved annual performance to March 31, 2020.

The company’s annual revenues surged by 11 percent to Ksh.362 billion ($3.4 billion) as data and mobile revenue pushed earnings in the period.

Income from mobile money and data stood at Ksh 99 billion ($930 million) and Ksh.33.1 billion ($311 million) respectively to push profit before tax to Ksh.63.4 billion ($598 million) from Ksh.37.1 billion ($348) in the year to March 2019.

The results lifted Airtel’s free cash flows to Ksh.48.2 billion ($453 million) from Ksh.16.1 billion ($151 million).

“These results also demonstrate the strength and resilience of our business and the effectiveness of our strategy with all three business services, voice, data and mobile money, contributing to revenue growth,” said Bharti Airtel Africa CEO Raghunath Mandava.

Airtel Africa’s net debt has fallen to Ksh.340.8 billion ($3.2 billion) from Ksh.426 billion ($4 billion) boosted in part by the company’s gains from its 2019 Initial Public Offer (IPO).

Profit after tax however declined by 4.4 percent to Ksh.43.5 billion ($408 million) from a one-off deferred tax recognition in Nigeria.

Revenues for the firm’s East Africa business which includes Kenya stood at Ksh.117.2 billion ($1.1 billion) from higher data and voice income.