Network operator Airtel Africa acquires shares in $29m buyback
TLDR
- Airtel Africa purchased 21 million shares for $29 million in a share buy-back program, increasing customer base by 8.6% to 155.4 million.
- Despite a revenue decline of 16.1%, Airtel achieved a profit before tax of $74 million (up 134%) and a profit after tax of $31 million (up 120.3%).
- Airtel's data capacity increased by 33%, with the share buy-back program set to continue for up to seven more months.
For the quarter ending June 30, Airtel Africa reported purchasing 21 million shares for a total consideration of $29 million in nearly five months, as part of the share buy-back program it commenced on March 1.
The Lagos-listed network operator saw an 8.6% increase in its customer base, reaching 155.4 million, with data capacity across its network increasing by 33%. It also disclosed revenue of $1.16 billion, a decline of 16.1%, but achieved a profit before tax of $74 million, up 134%, and a profit after tax of $31 million, up 120.3%.
In February, Airtel announced its intention to launch a share buy-back program of up to $100 million over 12 months and the program still has up to seven months before it concludes.
Key Takeaways
A buyback is when a company purchases its shares in the stock market. This repurchase reduces the number of shares outstanding, which inflates earnings per share (EPS) and can often lead to an increase in the stock's market price, benefiting shareholders. Besides its share buyback program, the company in March was considering taking its mobile money unit public, eyeing an initial public offering (IPO) that could value Airtel Money at over $4 billion. By June, the number of mobile money subscribers in Kenya surged following Airtel's removal of withdrawal codes. The total customer base grew by 9% to 152.7 million, while its data customer base increased by 17.8%, it said in May. In addition, Airtel's mobile money customer base saw a significant rise, increasing by 20.7% to 38 million.
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