Zambia’s second most preferred network provider Airtel Networks (ISIN:ZM0000000342) scaled its top line higher by 26% to K2.02billion in 1H22 supported by a 15% expansion in subscriber base to 8.22 million. The stellar sales take a positive cue from increased data demand in the copper producer as risk appetite restores to pre pandemic levels. Zambia has seen an uptick in digital commerce which is a key demand driver.
The mobile network operator scaled its after tax earnings by 299% to K353million supported by a 43% ebb in finance costs and a 14% decline in liabilities. The company decreased its investment costs leveraging off a stronger Kwacha in the period.
Airtel has continued to hemorrhage cash to plug a heavily leveraged position reflected by a 294% slide in cash position to K579 million. The MNOs debt to current ratio sagged 10% to 6 times. Lower capital expenditure spending was on account of dollar depreciation which resulted in lower costs of imported capital goods and not necessarily slowing down expansion.
A stable macroeconomic environment given Zambia’s strides to attain fiscal fitness, growth of the data industry and ebbing lending rates keep the stocks outlook more positive. Headwinds in the wake of tightening global monetary conditions, voice over IP cannibalization and competitiveness of the industry from emerging data providers remain key threats to attainment of the telco’s strategic objectives.
The Kwacha Arbitrageur