Airtel Uganda reported a decline in profitability in the first half as costs, including access charges and content, outpaced revenues and unrealised foreign exchange gains dropped sharply.

The telecom’s net profit was Shs153.2bn for the first six months, down 6.5 per cent from Shs163.8bn in the same period last year.

Airtel’s operating profit, which excludes net financial income and income tax expense, fell 0.6 per cent year-on-year to Shs297.7bn in the first half.

Revenue was Shs966.1bn, up 11.6 per cent. Service revenue jumped up 11.5 per cent to Shs957.7bn, primarily supported by growth in value-added services and data, as well as interconnection revenue, which more than doubled. The company’s total customer base reached 15.6 million, representing a net addition of 1.3 million, while data customers increased by 0.4 million to six million.

The results do not include revenue from Airtel’s mobile money business, which is managed by the privately-owned Airtel Mobile Commerce Uganda Limited.

The telecom reported an 18.1 per cent increase in costs to Shs668.4bn compared to the previous year. This was mainly due to a Shs25.9bn jump in access charges to Shs52.1bn, while content costs rose by Shs20.9bn to Shs41bn. Depreciation and amortisation also grew by 10.7 per cent to Sh177.7bn.

Profits before tax came in at Shs219.7bn, down 6.9 per cent from a year ago, impacted by a Sh13.3bn decline in financial income to Sh6.5 billion as a result of a plunge in net unrealised foreign exchange gains.

Airtel said it would return Shs46bn to shareholders as dividends for the period, up from Shs38.1bn a year ago.