Airtel
Africa plc
Results for quarter ended 30 June 2024
25 July 2024
Operating highlights
·
Total customer base grew by 8.6% to 155.4 million.
Data customer penetration continues to rise, driving a 13.4%
increase in data customers to 64.4 million. Data usage per customer
increased by 25.1% to 6.2 GBs, with smartphone penetration
increasing 4.7% to reach 41.7%.
·
Mobile money subscriber growth of 14.9% reflects
our continued investment into distribution to support increased
financial inclusion across our markets. Transaction value increased
by 28.7% in constant currency with annualised transaction value of
$120bn in reported currency.
·
Data ARPU growth of 9.6% and mobile money ARPU
growth of 8.8% in constant currency continued to support overall
ARPU's which increased 9.3% YoY.
·
Customer experience remains core to our strategy
with sustained network investment driving increased capacity and
coverage. Data capacity across our network has increased by 33%
with the rollout of almost 3,000 sites and over 5,600 kms of
fibre.
·
Launched a comprehensive cost efficiency programme
to identify specific cost reduction initiatives across the Group.
Steps taken include the optimisation of network utilisation and
design, introducing energy saving initiatives to reduce network
costs and the renegotiation of key contracts, whilst ensuring
future growth ambitions remain protected. We anticipate the full
benefit of this programme to accrue over the year ahead.
Financial performance
·
Revenue in constant currency grew by 19.0% in
Q1'25, driven by 33.4% growth in Nigeria and 22.3% growth in East
Africa, respectively. Reported currency revenues declined by 16.1%
to $1,156m reflecting the impact of currency devaluation,
particularly in Nigeria. Across the Group mobile services revenue
grew by 17.4% and Mobile Money revenue grew by 28.4% in constant
currency.
·
A substantial increase in fuel prices across our
markets and the lower contribution of Nigeria to the Group after
the naira devaluation contributed to a decline in EBITDA margins to
45.3% from 49.5% in Q1'24 and 46.5% in Q4'24. However, constant
currency EBITDA increased 11.3% whilst reported currency EBITDA
declined by 23.3% to $523m.
·
Profit after tax of $31m was impacted by $80m of
exceptional derivative and foreign exchange losses (net of tax),
arising from the further depreciation in the Nigerian naira during
the quarter.
·
The translation impact of currency devaluation on
reported currency results was the primary driver of EPS before
exceptional items declining from 3.9 cents in the prior period to
2.3 cents. Basic EPS of 0.2 cents compares to negative (4.5 cents)
in the prior period, predominantly reflecting the $471m of
exceptional derivative and foreign exchange losses in the prior
period, compared to $122m in the current period.
Capital allocation
·
Capex at $147m was 4.9% higher compared to prior
period. Capex guidance for the full year remains between $725m and
$750m as we continue to invest for future growth.
·
In line with our plan, we now have zero HoldCo
debt following the full repayment of the $550m bond in May 2024. In
total, 86% of our market debt is now in local currency, having paid
down $828m of foreign currency debt over the last year.
·
Leverage of 1.6x on 30 June 2024 compares to 1.3x
in the prior period. Of the 0.3x increase, 0.2x was due to the
decrease in reported currency EBITDA, with the balance due to an
increase in lease liabilities.
· The
$100m share buyback continues, with 21m shares purchased for a
consideration of $29m as at the end of June 2024.
Sustainability strategy
·
The Sustainability Report for 2024 was published
in June, updating on the Group's progress against its
sustainability goals, continued contribution to the UN SDGs and
commitment to sustainability which underpins the Group's business
strategy.
Sunil Taldar, Chief executive officer, on the trading
update:
"The continued revenue growth
momentum once again reflects the resilient demand for our services,
with sustained growth in our customer base and usage. Our superior
execution enables us to capture these opportunities, whilst
retaining our reputation as a cost leader across the
industry.
Having visited most of our OpCos
since I joined Airtel Africa, I am encouraged by the scale of the
opportunity available across our markets in both the GSM and mobile
money business. A key priority for us is to look for new
opportunities to further grow our business especially in the
enterprise, fibre and data centre businesses across our footprint
in Africa.
We will build on the strong
foundation established over many years to deliver on these new
business opportunities. Most importantly, our emphasis is on
significantly improving customer experience by simplifying customer
journeys and providing best in class network experience to our
customers, whilst remaining focused on driving efficiencies across
the business.
We have initiated a comprehensive
cost optimisation programme across the Group. We have already seen
success in this project, with savings arising in network and
distribution costs, and continued opportunities as contract
renegotiations continue. We expect sustainable savings to continue
as the year progresses.
A strong capital structure is
critical to enabling these ambitions and future proofing our
ambitious growth targets. During the quarter, we fully repaid the
outstanding debt due at the HoldCo and we remain committed to
further reduce foreign currency exposure across the Group to limit
the impact of currency devaluation on our business. The growth
opportunity across our markets remains compelling and we continue
to focus on margin improvement as indicated in our FY'24
results."
GAAP measures
(Quarter ended)
|
Description
|
Jun-24
|
Jun-23
|
Reported
currency
|
$m
|
$m
|
change
|
Revenue
|
1,156
|
1,377
|
(16.1%)
|
Operating profit
|
335
|
462
|
(27.4%)
|
Profit/(Loss) after tax
|
31
|
(151)
|
120.3%
|
Basic EPS ($ cents)
|
0.2
|
(4.5)
|
103.9%
|
Net cash generated from operating
activities
|
414
|
580
|
(28.7%)
|
Alternative performance measures (APM)
1
(Quarter ended)
|
Description
|
Jun-24
|
Jun-23
|
Reported
currency
|
Constant
currency
|
$m
|
$m
|
change
|
change
|
Revenue
|
1,156
|
1,377
|
(16.1%)
|
19.0%
|
EBITDA
|
523
|
682
|
(23.3%)
|
11.3%
|
EBITDA margin
|
45.3%
|
49.5%
|
(424)
bps
|
(312)
bps
|
EPS before exceptional items ($
cents)
|
2.3
|
3.9
|
(41.4%)
|
|
Operating free cash flow
|
376
|
542
|
(30.6%)
|
|
(1)
Alternative
performance measures (APM) are described on page
18.
About Airtel Africa
Airtel Africa is a leading provider
of telecommunications and mobile money services, with a presence in
14 countries in Africa, primarily in East Africa and Central and
West Africa.
Airtel Africa offers an integrated
suite of telecoms solutions to its subscribers, including mobile
voice and data services as well as mobile money services, both
nationally and internationally. We aim to continue providing a
simple and intuitive customer experience through streamlined
customer journeys.
Enquiries
Conference call
Management will host an analyst and
investor conference call at 13:00pm UK time (BST), on Thursday 25th
July 2024, including a Question-and-Answer session.
To receive an invitation with the
dial in numbers to participate in the event, please register
beforehand using the following link:
Conference call registration link
Key consolidated
financial information
Description
|
Unit of
measure
|
Quarter ended
|
Jun-24
|
Jun-23
|
Reported currency
change
|
Constant currency
change
|
Profit and loss
summary
|
|
|
|
|
|
Revenue 1
|
$m
|
1,156
|
1,377
|
(16.1%)
|
19.0%
|
Voice revenue
|
$m
|
476
|
621
|
(23.4%)
|
9.5%
|
Data revenue
|
$m
|
409
|
486
|
(15.8%)
|
26.4%
|
Mobile money revenue
2
|
$m
|
222
|
201
|
10.1%
|
28.4%
|
Other revenue
|
$m
|
100
|
114
|
(12.6%)
|
23.0%
|
Expenses
|
$m
|
(641)
|
(702)
|
(8.7%)
|
26.3%
|
EBITDA 3
|
$m
|
523
|
682
|
(23.3%)
|
11.3%
|
EBITDA margin
|
%
|
45.3%
|
49.5%
|
(424)
bps
|
(312)
bps
|
Depreciation and
amortisation
|
$m
|
(188)
|
(220)
|
(14.6%)
|
20.4%
|
Operating profit
|
$m
|
335
|
462
|
(27.4%)
|
6.8%
|
Other finance cost - net of finance
income 4
|
$m
|
(139)
|
(212)
|
(34.1%)
|
|
Finance cost - exceptional items
5
|
$m
|
(122)
|
(471)
|
(74.2%)
|
|
Total finance cost
|
$m
|
(261)
|
(683)
|
(61.8%)
|
|
Profit/(Loss) before tax
|
$m
|
74
|
(221)
|
133.6%
|
|
Tax
|
$m
|
(85)
|
(84)
|
1.5%
|
|
Tax - exceptional items
5
|
$m
|
42
|
154
|
(72.5%)
|
|
Total tax (charge)/credit
|
$m
|
(43)
|
70
|
162.1%
|
|
Profit/(Loss) after tax
|
$m
|
31
|
(151)
|
120.3%
|
|
Non-controlling interest
|
$m
|
(24)
|
(19)
|
26.1%
|
|
Profit attributable to owners of the
company - before exceptional items
|
$m
|
87
|
147
|
(41.3%)
|
|
Profit/(Loss) attributable to owners of the
company
|
$m
|
7
|
(170)
|
103.9%
|
|
EPS - before exceptional
items
|
Cents
|
2.3
|
3.9
|
(41.4%)
|
|
Basic EPS
|
Cents
|
0.2
|
(4.5)
|
103.9%
|
|
Weighted average number of
shares
|
million
|
3,737
|
3,751
|
(0.4%)
|
|
Capex
|
$m
|
147
|
140
|
4.9%
|
|
Operating free cash flow
|
$m
|
376
|
542
|
(30.6%)
|
|
Net cash generated from operating
activities
|
$m
|
414
|
580
|
(28.7%)
|
|
Net debt
|
$m
|
3,728
|
3,321
|
|
|
Leverage (net debt to
EBITDA)
|
Times
|
1.6x
|
1.3x
|
|
|
Return on capital
employed
|
%
|
22.9%
|
23.7%
|
(82)
bps
|
|
Operating KPIs
|
|
|
|
|
|
ARPU
|
$
|
2.5
|
3.2
|
(22.9%)
|
9.3%
|
Total customer base
|
million
|
155.4
|
143.1
|
8.6%
|
|
Data customer base
|
million
|
64.4
|
56.8
|
13.4%
|
|
Mobile money customer
base
|
million
|
39.5
|
34.3
|
14.9%
|
|
(1)
Revenue includes inter-segment eliminations of
$51m for the quarter ended 30 June 2024 and $45m for the prior
period.
(2) Mobile money revenue post inter-segment eliminations with
mobile services were $171m for the quarter ended 30 June 2024, and
$156m for the prior period.
(3) EBITDA includes other income of $8m for the quarter ended 30
June 2024 and $7m for the prior period.
(4) Other finance cost - net of finance income of $139m for the
quarter ended 30 June 2024 and $212m in the prior period includes
derivative and foreign exchange losses of $14m and $99m in the
respective periods which have not been treated as exceptional
items. Excluding these losses, other finance cost - net of finance
income was $125m for the quarter ended 30 June 2024 and $113m for
the prior period.
(5) Finance cost - exceptional items of $122m for the quarter
ended 30 June 2024 and $471m for the prior period relates to
derivative and foreign exchange losses following the devaluation of
the Nigerian naira, which resulted in an exceptional tax gain of
$42m and $154m, respectively. As a result, there was a $80m
negative impact on profit after tax in quarter ended 30 June 2024
and $317m in the prior period.
Financial review for the quarter ended 30 June
2024
Revenue
Group revenue in reported currency
declined by 16.1% to $1,156m, with constant currency growth of
19.0%. Group mobile services revenue grew by 17.4% in constant
currency, with voice revenue growth of 9.5% and data revenues
increasing by 26.4% over the period. In Nigeria, constant currency
mobile services revenues increased by 33.2%, whilst East Africa saw
19.7% growth and Francophone Africa increased by 3.6%. Mobile money
revenue grew by 28.4% in constant currency, primarily driven by
continued strong growth in East Africa.
Reported currency revenue growth
was particularly impacted by significant currency devaluations in
Nigeria, Malawi, Zambia and Tanzania. In particular, the naira
devalued from a weighted average NGN/USD rate of 503 in the prior
period to NGN/USD 1,384 in the current period.
EBITDA
Reported currency EBITDA declined
by 23.3% to $523m reflecting the impact of currency devaluation
over the period, particularly in Nigeria. In constant currency,
EBITDA increased by 11.3% with EBITDA margins of 45.3%, a decline
of 424bps in reported currency. The lower contribution of Nigeria
following the significant naira depreciation and a significant
increase in fuel prices (mainly in Nigeria by over 70%), were the
primary drivers of the margin decline over the period. Mobile
services EBITDA increased 7.7% in constant currency with EBITDA
margin at 44.4%, whilst mobile money EBITDA margins of 53.5%,
increased 223bps in constant currency, supporting growth of
34.0%.
Finance costs
Total finance costs for the quarter
ended 30 June 2024 was $261m, primarily impacted by $136m of
derivative and foreign exchange losses (reflecting the revaluation
of US dollar balance sheet liabilities and derivatives following
currency devaluation), of which $122m was classified as exceptional
following the naira devaluation[1]. Finance costs excluding
exceptional items and derivative and foreign exchange losses
increased from $113m to $125m in the current period primarily on
account of shift of foreign currency debt to local currency debt in
the operating entities carrying a higher average interest rate and
higher interest on lease liabilities.
Profit/(Loss) before tax
Profit before tax at $74m during the
quarter ended 30 June 2024 was largely impacted by the $136m
derivative and foreign exchange losses as discussed above and lower
EBITDA due to significant currency devaluation across key
markets.
Taxation
Total tax charges were $43m as
compared to a $70m credit in the prior period. Total tax charges in
the current period reflected an exceptional gain of $42m and $154m
in the prior period following the Nigerian naira devaluation. Tax
charges excluding exceptional items were $85m compared to $84m in
the prior period.
Tax charge of $43m during the
quarter ended 30 June 2024, on a profit before tax of $74m was
largely due to profit mix between various OpCo's and withholding
taxes.
Profit/(Loss) after tax
Profit after tax of $31m during the
quarter ended 30 June 2024 was primarily impacted by the $80m of
exceptional derivative and foreign exchange losses (net of tax) and
lower EBITDA due to significant currency devaluation across key
markets.
Basic EPS
Basic EPS at 0.2 cents during the
quarter ended 30 June 2024 was impacted by the exceptional
derivative and foreign exchange losses as explained above. EPS
before exceptional items and derivative and foreign exchange losses
for the quarter ended 30 June 2024 was 2.6 cents as compared to 5.9
cents in the prior period, reflecting the impact of significant
currency devaluation across key markets on EBITDA.
Leverage
Leverage increased from 1.3x in the
prior period to 1.6x as on 30 June 2024. Of the 0.3x increase, 0.2x
was due to the decrease in reported currency EBITDA following the
naira devaluation, with the remaining increase due to an increase
in lease liabilities. In May 2024, we fully repaid the remaining
$550m debt due at the HoldCo level. As of 30 June 2024, 86% of our
OpCo debt is in local currency compared to 68% a year
ago.
GAAP measures
Revenue
Reported revenue of $1,156m,
declined by 16.1% in reported currency, and grew by 19.0% in
constant currency driven by both customer base growth of 8.6% and
ARPU growth of 9.3%. The gap between constant currency and reported
currency revenue growth was due to the average currency
devaluations between the periods, mainly in the Nigerian naira, the
Malawian kwacha, the Zambian kwacha, and the Tanzanian shilling
partially offset by an appreciation in the Kenya
shilling.
Reported mobile services revenue at
$986m, declined 19.4%, and grew by 17.4% in constant currency.
Mobile money revenue grew by 10.1% in reported currency. In
constant currency, mobile money revenue grew by 28.4%, driven by
revenue growth in East Africa of 31.7% and Francophone Africa of
18.4%.
Operating profit
Operating profit in reported
currency declined by 27.4% to $335m as currency headwinds offset
the 6.8% growth of operating profit in constant
currency.
Total finance costs
Total finance costs of $261m for the
quarter ended 30 June 2024, was lower by $422m over the prior
period. Current and prior period finance costs were primarily
impacted by $122m and $471m of exceptional derivative and foreign
exchange losses respectively, following the significant currency
devaluation in Nigeria. Excluding exceptional items, finance cost
was lower by $73m primarily on account of lower derivative and
foreign exchange losses, partially offset by higher interest on
market debt due to the ongoing shift of foreign currency debt to
local currency debt in the operating entities carrying a higher
average interest rate, and higher interest on lease
liabilities.
The Group's effective interest rate
increased to 12.7% compared to 8.5% in the prior period, largely
driven by higher local currency debt at the OpCo level, in line
with our strategy of localising debt at OpCo, and the repayment of
$550m of HoldCo debt which carried a lower than average interest
rate.
Taxation
Total tax charges of $43m as
compared to credit of $70m in the prior period. Total tax charges
in the current period reflected an exceptional gain of $42m and
$154m in the prior period on account of the Nigerian naira
devaluation. Tax charges excluding exceptional items were $85m
compared to $84m in the prior period.
Basic EPS
Basic EPS at 0.2 cents during the
quarter ended 30 June 2024 was impacted by the derivative and
foreign exchange losses as explained above.
Net cash generated from operating
activities
Net cash generated from operating
activities was $414m, lower by 28.7% as compared to $580m in the
prior period.
Alternative performance measures[2]
EBITDA
EBITDA of $523m, declined by 23.3%
in reported currency, and increased by 11.3% in constant currency.
Growth in constant currency EBITDA was led by revenue growth and
supported by continued improvement in operating efficiencies offset
by the impact that inflationary cost pressures in a number of
markets. The EBITDA margin declined by 424 basis points in reported
currency to 45.3% reflecting the impact of lower contribution of
Nigeria post significant naira devaluation and inflationary cost
pressures.
The gap between constant currency
and reported currency EBITDA growth was due to the currency
devaluations between the periods, mainly in the Nigerian naira, the
Malawian kwacha, the Zambian kwacha, and the Tanzanian shilling
partially offset by an appreciation in the Kenyan
shilling.
Tax
The effective tax rate was 39.4%,
compared to 39.2% in the prior period. The effective tax rate is
higher than the weighted average statutory corporate tax rate of
approximately 32%, largely due to the profit mix between various
OpCos and withholding taxes on dividends by
subsidiaries.
Exceptional items
The exceptional item of $122m in the
current period and $471m in the prior period relates to derivative
and foreign exchange losses following the devaluation of the
Nigerian naira. These losses resulted in an exceptional tax gain of
$42m and $154m respectively.
EPS before exceptional
items
EPS before exceptional items of 2.3
cents as compared to 3.9 cents in the prior period was primarily
impacted by the significant currency headwinds impacting reported
currency results. EPS before exceptional items and derivative and
foreign exchange losses was 2.6 cents compared to 5.9 cents in the
prior period.
Operating free cash
flow
Operating free cash flow was $376m,
lower by 30.6%, as a result of lower EBITDA and higher capex in
current period.
Other significant updates
Repayment of remaining $550m bond achieving a zero-debt
position at HoldCo
On 20 May 2024, the Company
announced that it has repaid in full the 5.35% Guaranteed Senior
Notes maturing in May 2024. This bond repayment of $550m was made
exclusively out of the cash reserves at the HoldCo and is a
continuation of its strategy to reduce external foreign currency
debt.
At the time of the IPO in June 2019,
the Group had $2,719m of external debt at HoldCo which resulted in
significant exposure to currency fluctuations and the reliance on
upstreaming funds to cover both interest costs and the principal
repayment. Through a consistent execution of its strategy
supporting strong free cash flow generation, and continued
upstreaming success, the Group has been reducing Holdco debt over
the past few years and has now reached the significant milestone of
a zero-debt position at HoldCo.
The current leverage and capital
structure is a reflection of the Group's successful capital
allocation strategy that has been in place since our IPO, and it
will aim to continue reducing foreign currency debt obligations
across its OpCo's.
Update on share buy-back programme
On 1 February 2024, the Company
announced that in light of the increase in HoldCo cash, current
leverage and the consistent strong operating cash generation, the
Board intended to launch a share buy-back programme of up to $100m,
over a 12-month period.
On 1 March 2024, Airtel Africa plc
announced the commencement of its share buyback programme. As at
the end of June 2024, the Company has purchased 21 million shares
for a total consideration of $29m.
Directorate changes
On 9 May 2024, Airtel Africa plc
announced the appointment of Paul Arkwright, CMG, as an independent
non-executive director of the Company, with immediate
effect.
On 3 July 2024, following the
conclusion of the AGM, John Danilovich retired as an independent
non-executive director of Airtel Africa plc.
Retirement of Airtel Africa plc CEO and appointment of
Successor
On 2 January 2024, Airtel Africa plc
announced the retirement of Chief Executive Officer Olusegun
"Segun" Ogunsanya and the appointment of Sunil Taldar, who joined
Airtel Africa in October 2023 as Director - Transformation, as
Chief Executive Officer (CEO). Following a transition period, Sunil
Taldar has been appointed to the Board as an Executive Director and
has assumed the role of CEO on 1 July 2024, at which time Segun
retired from the Board and the Company. Following his retirement
from Airtel Africa, Segun will be available to advise the Chairman,
the Airtel Africa Board and Chief Executive Officer for a 12-month
period and appointed as Airtel Africa Charitable Foundation's
inaugural Chair.
Nigerian Communications Commission directive on subscriber
registration compliance
In December 2023, the Nigerian
Communications Commission (NCC) informed Airtel Nigeria, in an
industry-wide directive, to undertake full network barring of all
SIMs that have failed to submit their National Identity Numbers
(NIN) on or before 28 February 2024. Likewise, customers that have
submitted their NINs, but remain unverified are to be barred by 31
July 2024 (earlier deadline was 15 April 2024). Furthermore,
guidelines were issued whereby no customer can have more than 4
active SIMs and all such excess SIMs must be barred by 29 March
2024. This directive is part of the ongoing Federal Government
NIN-SIM harmonisation exercise requiring all subscribers to provide
valid NIN information to update SIM registration
records.
Airtel Nigeria has complied with the
directives issued and barred all customers without NINs as well as
customers with more than 4 active SIMs which had a very negligible
impact on revenue. Since the directive was issued in December 2023,
8.7m customers have already been verified. Currently we are
engaging with approximately 4.9m customers whose NINs are yet to be
verified, with approximately $3m-$4m of monthly revenue at risk. We
continue to engage with the NCC and work closely with the relevant
authorities to facilitate and accelerate the verification process
to minimise the risk of service disruption to these customers,
whilst also limiting the revenue impact from our compliance to the
directive issued.
Chad License Renewal
In July 2024, Airtel Tchad S.A
("Airtel Tchad"), a subsidiary of the Group was issued with a
National Telecom Operator licence for 2G/3G and 4G network. This
licence renewal is with effect from April 2024 and is for a period
of 10 years for a gross consideration of CFA54bn (approximately
$90m).
Information on additional
KPIs
An investor relations pack with
information on the additional KPIs and balance sheet is available
to download on our website at airtel.africa/investors
Financial review for the quarter ended 30 June
2024
Nigeria - Mobile
services
Description
|
Unit of
measure
|
Quarter ended
|
Jun-24
|
Jun-23
|
Reported
currency
change
|
Constant
currency
change
|
Summarised statement of
operations
|
|
|
|
|
|
Revenue
|
$m
|
256
|
528
|
(51.6%)
|
33.2%
|
Voice revenue
1
|
$m
|
112
|
254
|
(55.8%)
|
21.6%
|
Data revenue
|
$m
|
117
|
228
|
(48.6%)
|
41.3%
|
Other revenue
2
|
$m
|
27
|
46
|
(42.8%)
|
56.9%
|
EBITDA
|
$m
|
123
|
284
|
(56.5%)
|
19.3%
|
EBITDA margin
|
%
|
48.2%
|
53.7%
|
(549)
bps
|
(565)
bps
|
Depreciation and
amortisation
|
$m
|
(49)
|
(90)
|
(45.9%)
|
46.5%
|
Operating profit
|
$m
|
83
|
182
|
(54.2%)
|
29.5%
|
Capex
|
$m
|
38
|
47
|
(19.6%)
|
(19.6%)
|
Operating free cash flow
|
$m
|
85
|
237
|
(63.9%)
|
48.7%
|
Operating
KPIs
|
|
|
|
|
|
Total customer base
|
million
|
50.4
|
48.2
|
4.6%
|
|
Data customer base
|
million
|
26.3
|
23.7
|
11.2%
|
|
Mobile services ARPU
|
$
|
1.7
|
3.6
|
(53.7%)
|
27.4%
|
(1)
Voice revenue
includes inter-segment revenue of $0.3m in the quarter ended 30
June 2024 and in the prior period. Excluding inter-segment revenue,
voice revenue was $112m in quarter ended 30 June 2024 and $254m in
the prior period.
(2)
Other revenue
includes inter-segment revenue of $0.5m in the quarter ended 30
June 2024 and in the prior period. Excluding inter-segment revenue,
other revenue was $26m in quarter ended 30 June 2024 and $46m in
the prior period.
Revenue grew by 33.2% in constant
currency, largely driven by continued strength in the demand for
data services across the country. In reported currency, revenues
declined by 51.6% to $256m on account of the significant
devaluation of the Nigerian naira. The constant currency revenue
growth was driven by both customer base growth of 4.6% and ARPU
growth of 27.4%. Customer base growth was negatively impacted by
barring of customers pursuant to KYC directives by the regulator in
Q4'24.
Voice revenue grew by 21.6% in
constant currency, driven by both customer base growth of 4.6% and
voice ARPU growth of 16.3%.
Data revenue grew by 41.3% in
constant currency, as a function of both data customer and data
ARPU growth of 11.2% and 25.2%, respectively. Data usage per
customer increased by 28.6% to 7.3 GB per month (from 5.7 GB in the
prior period). Our continued 4G network rollout has resulted in
nearly 100% of all our sites delivering 4G services.
Other revenues grew by 56.9% in
constant currency, contributed by growth in messaging and
value-added services coupled with 47.5% growth in leased line
revenue.
EBITDA of $123m declined by 56.5% in
reported currency but increased by 19.3% in constant currency. The
EBITDA margin declined by 549 basis points to 48.2% reflecting the
continued inflationary pressures across the business, particularly
from the increase in diesel prices. Average diesel prices in
Nigeria increased by over 70% compared to the prior
period.
Operating free cash flow was $85m,
up by 48.7% in constant currency, largely due to the EBITDA growth
while in reported currency, operating free cash flow declined by
63.9% due to lower EBITDA on account of significant naira
devaluation.
East Africa - Mobile services 1
Description
|
Unit of
measure
|
Quarter ended
|
Jun-24
|
Jun-23
|
Reported
currency
change
|
Constant
currency
change
|
Summarised statement of
operations
|
|
|
|
|
|
Revenue
|
$m
|
423
|
397
|
6.5%
|
19.7%
|
Voice revenue
2
|
$m
|
210
|
212
|
(0.6%)
|
12.4%
|
Data revenue
|
$m
|
170
|
151
|
12.3%
|
25.7%
|
Other revenue
3
|
$m
|
43
|
34
|
23.5%
|
38.2%
|
EBITDA
|
$m
|
198
|
195
|
1.3%
|
14.5%
|
EBITDA margin
|
%
|
46.7%
|
49.1%
|
(240)
bps
|
(215)
bps
|
Depreciation and
amortisation
|
$m
|
(76)
|
(74)
|
3.7%
|
12.4%
|
Operating profit
|
$m
|
108
|
111
|
(3.0%)
|
13.7%
|
Capex
|
$m
|
77
|
54
|
43.3%
|
43.3%
|
Operating free cash flow
|
$m
|
121
|
141
|
(14.6%)
|
1.3%
|
Operating
KPIs
|
|
|
|
|
|
Total customer base
|
million
|
72.0
|
65.0
|
10.8%
|
|
Data customer base
|
million
|
27.4
|
23.9
|
14.6%
|
|
Mobile services ARPU
|
$
|
2.0
|
2.1
|
(4.2%)
|
7.7%
|
(1) The East Africa business
region includes Kenya, Malawi, Rwanda, Tanzania, Uganda and
Zambia.
(2)
Voice revenue
includes inter-segment revenue of $0.1m in the quarter ended 30
June 2024 and $0.2m in the prior period. Excluding inter-segment
revenue, voice revenue was $210m in quarter ended 30 June 2024 and
$211m in the prior period.
(3)
Other revenue
includes inter-segment revenue of $3m in the quarter ended 30 June
2024 and $2m in the prior period. Excluding inter-segment revenue,
other revenue was $40m in quarter ended 30 June 2024 and $32m in
the prior period.
East Africa revenue grew by 6.5% in
reported currency to $423m, and by 19.7% in constant currency. The
constant currency growth was made up of voice revenue growth of
12.4%, data revenue growth of 25.7% and other revenue growth of
38.2%.
Voice revenues were supported by
both customer base growth of 10.8% and voice ARPU growth of 1.2%.
The customer base growth was largely driven by expansion of both
increased network coverage and the increasing scale of the
distribution network. Voice ARPU's were impacted by the
interconnect rate reduction in Kenya, Tanzania and
Rwanda.
Data customer base growth of 14.6%
and data ARPU growth of 7.1% drove the strong performance in data
revenues. Our continued investment in the network and expansion of
4G network infrastructure resulted in 97.6% of our East Africa
network sites on 4G, compared to 90.4% in the prior period.
Furthermore, 871 sites are 5G enabled in four markets. In Q1'25,
total data usage per customer increased to 5.5 GB per customer per
month, up by 22.2%.
EBITDA increased to $198m, up by
1.3% in reported currency and up by 14.5% in constant currency.
EBITDA margin at 46.7%, declined by 240 basis points as a result of
rising fuel prices in several of our key markets.
Operating free cash flow was $121m,
up by 1.3% in constant currency, due largely to EBITDA growth,
partially offset by increased capex.
The differential in growth rates
(between constant currency and reported currency) is primarily
contributed by the devaluation in the Zambian kwacha, the Malawian
kwacha, and the Tanzanian shilling, partially offset by the Kenyan
shilling appreciation.
Francophone Africa - Mobile services
1
Description
|
Unit of
measure
|
Quarter ended
|
Jun-24
|
Jun-23
|
Reported
currency
change
|
Constant
currency
change
|
Summarised statement of
operations
|
|
|
|
|
|
Revenue
|
$m
|
307
|
299
|
2.9%
|
3.6%
|
Voice revenue
2
|
$m
|
154
|
158
|
(2.4%)
|
(1.7%)
|
Data revenue
|
$m
|
122
|
107
|
14.3%
|
15.2%
|
Other revenue
3
|
$m
|
31
|
34
|
(9.0%)
|
(8.5%)
|
EBITDA
|
$m
|
114
|
131
|
(12.7%)
|
(12.2%)
|
EBITDA margin
|
%
|
37.1%
|
43.8%
|
(666)
bps
|
(666)
bps
|
Depreciation and
amortisation
|
$m
|
(55)
|
(50)
|
10.2%
|
11.0%
|
Operating profit
|
$m
|
46
|
69
|
(33.6%)
|
(33.2%)
|
Capex
|
$m
|
23
|
31
|
(25.1%)
|
(25.1%)
|
Operating free cash flow
|
$m
|
91
|
100
|
(8.9%)
|
(8.1%)
|
Operating
KPIs
|
|
|
|
|
|
Total customer base
|
million
|
32.9
|
29.8
|
10.3%
|
|
Data customer base
|
million
|
10.7
|
9.2
|
16.0%
|
|
Mobile services ARPU
|
$
|
3.1
|
3.4
|
(7.4%)
|
(6.8%)
|
(1) The Francophone Africa
business region includes Chad, Democratic Republic of the Congo,
Gabon, Madagascar, Niger, Republic of the Congo, and
Seychelles.
(2)
Voice revenue
includes inter-segment revenue of $1m in the quarter ended 30 June
2023. Excluding inter-segment revenue, voice revenue was $157m in
the quarter ended 30 June 2023.
(3)
Other revenue
includes inter-segment revenue of $1m in the quarter ended 30 June
2024 and in the prior period. Excluding inter-segment revenue,
other revenue was $30m in quarter ended 30 June 2024 and $33m in
the prior period.
Revenue grew by 2.9% in reported
currency and by 3.6% in constant currency. Slowdown in revenue
growth is mainly due to high inflation in key markets impacting
consumer spend, although customer growth remained robust across the
region.
Voice revenue declined by 1.7% in
constant currency, as customer base growth of 10.3% was more than
offset by a decline in voice ARPU. Voice ARPU was negatively
impacted by an interconnect rate reduction in Congo B and Niger
while the customer base growth was supported by the expansion of
both network coverage and distribution infrastructure.
Data revenue grew by 15.2% in
constant currency, supported by customer base growth of 16.0%. Our
continued 4G network rollout resulted in an increase in total data
usage of 44.4% and per customer data usage increase of 23.2%. Data
usage per customer increased to 4.8 GB per month (up from 3.9 GB in
the prior period).
EBITDA at $114m, declined by 12.7%
and 12.2% in reported and constant currency, respectively. The
EBITDA margin declined to 37.1%, a decline of 666 basis points,
impacted by an increase in fixed frequency fees in a key market,
rising energy costs combined with a slowdown in revenue growth in
key markets.
Operating free cash flow was $91m,
declined by 8.1% in constant currency, due to the decline in
EBITDA, partially offset by lower capex.
Mobile services
Description
|
Unit of
measure
|
Quarter ended
|
Jun-24
|
Jun-23
|
Reported
currency
change
|
Constant
currency
change
|
Summarised statement of
operations
|
|
|
|
|
|
Revenue (1)
|
$m
|
986
|
1,223
|
(19.4%)
|
17.4%
|
Voice revenue
|
$m
|
476
|
621
|
(23.4%)
|
9.5%
|
Data revenue
|
$m
|
409
|
486
|
(15.8%)
|
26.4%
|
Other revenue
|
$m
|
101
|
116
|
(12.4%)
|
23.1%
|
EBITDA
|
$m
|
438
|
610
|
(28.2%)
|
7.7%
|
EBITDA margin
|
%
|
44.4%
|
49.9%
|
(547)
bps
|
(399)
bps
|
Depreciation and
amortisation
|
$m
|
(180)
|
(214)
|
(15.6%)
|
19.8%
|
Operating profit
|
$m
|
240
|
363
|
(33.8%)
|
5.1%
|
Capex
|
$m
|
138
|
132
|
4.6%
|
4.6%
|
Operating free cash flow
|
$m
|
300
|
478
|
(37.3%)
|
9.2%
|
Operating
KPIs
|
|
|
|
|
|
Mobile voice
|
|
|
|
|
|
Customer base
|
million
|
155.4
|
143.1
|
8.6%
|
|
Voice ARPU
|
$
|
1.0
|
1.5
|
(29.7%)
|
0.6%
|
Mobile data
|
|
|
|
|
|
Data customer base
|
million
|
64.4
|
56.8
|
13.4%
|
|
Data ARPU
|
$
|
2.1
|
2.9
|
(27.0%)
|
9.6%
|
(1)
Mobile service revenue after inter-segment
eliminations was $985m in the quarter ended 30 June 2024 and
$1,221m in the prior period.
Overall revenue from mobile services
declined by 19.4% in reported currency with growth of 17.4% in
constant currency. The constant currency growth was evident across
all regions and services. Mobile services revenue grew in Nigeria
by 33.2%, in East Africa by 19.7% and in Francophone Africa by
3.6%, respectively.
Voice revenue grew by 9.5% in
constant currency, was supported primarily by the continued growth
in the customer base as we continue to invest in our network and
enhance our distribution infrastructure. The voice ARPU growth of
0.6% was supported by an increase in voice usage per customer of
3.0%, reaching 290 minutes per customer per month, with total
minutes on the network increasing by 12.2%.
Data revenue grew by 26.4% in
constant currency, driven by both customer base growth of 13.4% and
data ARPU growth of 9.6%. The customer base growth was recorded
across all the regions supported by the expansion of our 4G
network. 95.8% of our total sites are now on 4G, compared with
90.6% in the prior period. 5G is operational across five countries,
with 1,106 sites deployed. Data usage per customer increased to 6.2
GB per customer per month (from 4.9 GB in the prior period). Data
revenue contributed to 41.5% of total mobile services revenue, up
from 39.7% in the prior period.
EBITDA was $438m, down 28.2% in
reported currency, and up by 7.7% in constant currency. The EBITDA
margin declined by 547 basis points to 44.4%, a decline of 399
basis points in constant currency, due largely to higher
inflationary pressures on the cost base.
Operating free cash flow was $300m,
up by 9.2% in constant currency, due to the increased EBITDA,
partially offset by higher capex.
Mobile money
Description
|
Unit of
measure
|
Quarter ended
|
Jun-24
|
Jun-23
|
Reported
currency
change
|
Constant
currency
change
|
Summarised statement of
operations
|
|
|
|
|
|
Revenue (1)
|
$m
|
222
|
201
|
10.1%
|
28.4%
|
Nigeria
|
$m
|
1
|
0
|
-
|
-
|
East Africa
|
$m
|
167
|
155
|
7.7%
|
31.7%
|
Francophone Africa
|
$m
|
54
|
46
|
17.8%
|
18.4%
|
EBITDA
|
$m
|
118
|
103
|
15.0%
|
34.0%
|
EBITDA margin
|
%
|
53.5%
|
51.2%
|
229
bps
|
223
bps
|
Depreciation and
amortisation
|
$m
|
(5)
|
(5)
|
0.6%
|
23.9%
|
Operating profit
|
$m
|
111
|
95
|
16.8%
|
35.4%
|
Capex
|
$m
|
4
|
4
|
17.0%
|
17.0%
|
Operating free cash flow
|
$m
|
114
|
99
|
15.0%
|
34.7%
|
Operating
KPIs
|
|
|
|
|
|
Mobile money customer
base
|
million
|
39.5
|
34.3
|
14.9%
|
|
Transaction value
|
$bn
|
30.0
|
26.8
|
12.0%
|
28.7%
|
Mobile money ARPU
|
$
|
1.9
|
2.0
|
(6.7%)
|
8.8%
|
(1)
Mobile money service revenue post inter-segment eliminations with mobile services was $171m
in the quarter ended 30 June 2024 and $156m in the prior
year.
Mobile money revenue grew by 10.1%
in reported currency, with constant currency growth of 28.4%. The
constant currency mobile money revenue growth was driven by revenue
growth in both East Africa and Francophone Africa of 31.7% and
18.4%, respectively. In Nigeria, we continue to focus on customer
acquisitions with 1 million of active customers registered for
mobile money services at the end of June 2024. Additionally, we
added almost 125,000 agents during the year reaching over 192,000
agents as of 30 June 2024.
The constant currency revenue growth
of 28.4% was driven by both our customer base growth of 14.9% and
mobile money ARPU growth of 8.8%. The expansion of our distribution
network, particularly our exclusive channels of Airtel Money
branches and kiosks, supported customer base growth of 14.9%. The
mobile money ARPU growth of 8.8% was driven by transaction value
per customer growth of 9.0% in constant currency, to $258 per
customer per month.
Annualised transaction value
amounted to over $120bn in reported currency, with mobile money
revenue contributing 19.2% of total Group revenue during the
quarter ended 30 June 2024 as compared to 14.6% in the prior
period.
EBITDA was $118m, up by 15.0% and
34.0% in reported and constant currency, respectively. The EBITDA
margin reached 53.5%, an improvement of 223 basis points in
constant currency and 229 basis points in reported currency, driven
by continued operating leverage.
The differential in growth rates
(between constant currency and reported currency) is primarily as
the result of devaluation in the Zambian kwacha, the Malawi kwacha,
and the Tanzanian shilling.
Regional performance
Nigeria
Description
|
Unit of
measure
|
Quarter ended
|
Jun-24
|
Jun-23
|
Reported
currency
change
|
Constant
currency
change
|
Revenue
|
$m
|
256
|
528
|
(51.5%)
|
33.4%
|
Voice revenue
|
$m
|
112
|
254
|
(55.8%)
|
21.6%
|
Data revenue
|
$m
|
117
|
228
|
(48.6%)
|
41.3%
|
Mobile money revenue
|
$m
|
1
|
0
|
-
|
-
|
Other revenue
|
$m
|
26
|
46
|
(43.4%)
|
57.0%
|
EBITDA
|
$m
|
123
|
281
|
(56.4%)
|
19.6%
|
EBITDA margin
|
%
|
47.8%
|
53.2%
|
(536)
bps
|
(551)
bps
|
Operating
KPIs
|
|
|
|
|
|
ARPU
|
$
|
1.7
|
3.6
|
(53.7%)
|
27.6%
|
East Africa
Description
|
Unit of
measure
|
Quarter ended
|
Jun-24
|
Jun-23
|
Reported
currency
change
|
Constant
currency
change
|
Revenue
|
$m
|
554
|
519
|
6.6%
|
22.3%
|
Voice revenue
|
$m
|
210
|
212
|
(0.6%)
|
12.4%
|
Data revenue
|
$m
|
170
|
151
|
12.3%
|
25.7%
|
Mobile money revenue
|
$m
|
167
|
155
|
7.7%
|
31.7%
|
Other revenue
|
$m
|
41
|
33
|
23.0%
|
38.4%
|
EBITDA
|
$m
|
289
|
279
|
3.6%
|
20.3%
|
EBITDA margin
|
%
|
52.2%
|
53.7%
|
(149)
bps
|
(89)
bps
|
Operating
KPIs
|
|
|
|
|
|
ARPU
|
$
|
2.6
|
2.7
|
(4.1%)
|
10.1%
|
Francophone Africa
Description
|
Unit of
measure
|
Quarter ended
|
Jun-24
|
Jun-23
|
Reported
currency
change
|
Constant
currency
change
|
Revenue
|
$m
|
345
|
330
|
4.5%
|
5.2%
|
Voice revenue
|
$m
|
154
|
158
|
(2.4%)
|
(1.7%)
|
Data revenue
|
$m
|
122
|
107
|
14.3%
|
15.2%
|
Mobile money revenue
|
$m
|
54
|
46
|
17.8%
|
18.4%
|
Other revenue
|
$m
|
30
|
33
|
(9.3%)
|
(8.8%)
|
EBITDA
|
$m
|
144
|
155
|
(7.2%)
|
(6.6%)
|
EBITDA margin
|
%
|
41.8%
|
47.0%
|
(527)
bps
|
(528)
bps
|
Operating
KPIs
|
|
|
|
|
|
ARPU
|
$
|
3.5
|
3.8
|
(6.0%)
|
(5.4%)
|
Consolidated performance
Description
|
UoM
|
Quarter ended- June
2024
|
Quarter ended- June
2023
|
Mobile
services
|
Mobile
money
|
Unallocated
|
Eliminations
|
Total
|
Mobile
services
|
Mobile
money
|
Unallocated
|
Eliminations
|
Total
|
Revenue
|
$m
|
986
|
222
|
-
|
(52)
|
1,156
|
1,223
|
201
|
-
|
(47)
|
1,377
|
Voice revenue
|
$m
|
476
|
|
-
|
-
|
476
|
621
|
|
-
|
-
|
621
|
Data revenue
|
$m
|
409
|
|
-
|
-
|
409
|
486
|
|
-
|
-
|
486
|
Other revenue
|
$m
|
101
|
|
-
|
(1)
|
100
|
116
|
|
-
|
(2)
|
114
|
EBITDA
|
$m
|
438
|
118
|
(33)
|
-
|
523
|
610
|
103
|
(31)
|
-
|
682
|
EBITDA margin
|
%
|
44.4%
|
53.5%
|
|
|
45.3%
|
49.9%
|
51.2%
|
|
|
49.5%
|
Depreciation and
amortisation
|
$m
|
(180)
|
(5)
|
(3)
|
-
|
(188)
|
(214)
|
(5)
|
(1)
|
-
|
(220)
|
Operating profit
|
$m
|
240
|
111
|
(16)
|
-
|
335
|
363
|
95
|
4
|
-
|
462
|
Risk factors
The Group's business and industry
in which it operates together with all other information contained
in this document, including, in particular, the risk factors
summarised below. Additional risks and uncertainties relating to
the Group that are currently unknown to the Group, or those the
Group currently deems immaterial, may, individually or
cumulatively, also have a material adverse impact on the Group's
business, results of operations and financial position.
Summary of principal risks
The Group continually monitors its
external and internal environment
to identify risks which have the ability to impact
its operations or the achievement of its objectives.
1. We operate in
a competitive environment with the potential for aggressive
competition by existing players, or the entry of new players, which
could both put a downward pressure on prices, adversely affecting
our revenue and profitability.
2. Failure to
innovate through simplifying the customer experience, developing
adequate digital touchpoints in line with changing customer needs
and competitive landscape could lead to loss of customers and
market share.
3. Global
geopolitical and regional tensions have the potential to impact our
business directly and indirectly due to the interconnectedness of
the global supply chain. Relatedly, adverse macroeconomic
conditions such as rising inflation and increased cost of living
not only puts pressure on the disposable income of our customers
but also increases the cost of inputs for our business negatively
impacting sales and profitability.
4. Cybersecurity
threats through internal or external sabotage or system
vulnerabilities could potentially result in customer data breaches
and/or service downtimes.
5. Adverse
changes in our external business environment and macro-economic
conditions such as supply chain disruptions, increase in global
commodity prices and inflationary pressures could lead to a
significant increase in our operating cost structure while also
negatively impacting the disposable income of consumers. These
adverse economic conditions therefore not only put pressure on our
profitability but also on customer usage for our
services.
6. Shortages of
skilled telecommunications professionals in some markets and the
inability to identify and develop successors for key leadership
positions could both lead to disruptions in the execution of our
corporate strategy.
7. Our internal
control environment is subject to the risk that controls may become
inadequate due to changes in internal or external conditions, new
accounting requirements, delays, or inaccuracies in
reporting.
8. Our ability to
provide quality of service to our customers and meet quality of
service (QoS) requirements depends on the robustness and resilience
of our technology stack and ecosystem encompassing hardware,
software, products, services, and applications and our ability to
respond appropriately to any disruptions. However,
telecommunications networks are subject to the risks of technical
failures, aging infrastructure, human error, wilful acts of
destruction or natural disasters.
9. We operate in
a diverse and dynamic legal, tax and regulatory environment.
Adverse changes in the political, macro-economic and policy
environment could have a negative impact on our ability to achieve
our strategy. While the group makes every effort to comply with its
legal and regulatory obligations in all its operating jurisdictions
in line with the group's risk appetite, we are however continually
faced with an uncertain and constantly evolving legal, regulatory,
and policy environment in some of the markets where we
operate.
10. Our multinational footprint means we are constantly exposed to
the risk of adverse currency fluctuations and the macroeconomic
conditions in the markets where we operate. We derive revenue and
incur costs in local currencies where we operate, but we also incur
costs in foreign currencies, mainly from buying equipment and
services from manufacturers and technology service providers. That
means adverse movements in exchange rates between the currencies in
our OpCos and the US dollar could have a negative effect on our
liquidity and financial condition. In some markets, we face
instances of limited supply of foreign currency within the local
monetary system. This not only constrains our ability to fully
benefit at Group level from strong cash generation by those OpCos
but also impacts our ability to make timely foreign currency
payments to our international suppliers.
Given the severity of this risk,
specifically in some of our OpCos, the Group management
continuously monitors the potential impact of this risk of exchange
rate fluctuations based on the following methodology:
a) Comparing the
average devaluation of each currency in the markets in which the
Group operates against US dollar on 3-year and 5-year historic
basis and onshore forward exchange rates over a 1-year
period.
b) If either of
the above devaluation is higher than 5% per annum, management
selects the highest of these exchange rates.
c) Management
then uses this exchange rate to monitor the potential impact of
using such rate on the Group's income statement so that the Group
can actively monitor and assess the impact on the Group's
financials due to exchange rate fluctuations.
Additionally, for our Nigerian
operations, management uses different sensitivity analysis for
scenario planning purposes which includes the recent impact of the
naira devaluation.
With respect to currency
devaluation sensitivity going forward, on a 12-month basis assuming
that the USD appreciation occurs at the beginning of the period, a
further 1% USD appreciation across all currencies in our OpCos
would have a negative impact of $43m - $45m on revenues, $20m -
$21m on EBITDA and $19m - $21m on foreign exchange loss (excluding
derivatives). Our largest exposure is to the Nigerian naira, for
which on a similar basis, a further 1% USD appreciation would have
a negative impact of $9m - $10m on revenues, $4m - $5m on EBITDA
and $8m - $9m on foreign exchange loss (excluding
derivatives).
This does not represent any
guidance and is being used solely to illustrate the potential
impact of further currency devaluation on the Group for the purpose
of exchange rate risk management. The accounting under IFRS is
based on exchange rates in line with the requirements of IAS 21
'The Effect of Changes in Foreign Exchange' and does not factor in
the devaluation mentioned above.
Based on above-mentioned specific
methodology for the identified OpCos, management evaluates specific
mitigation actions based on available mechanisms in each of the
geographies. For further details on such mitigation action, refer
to the risk section of the Annual Report and Accounts
2023/24.
Forward looking statements
This document contains certain
forward-looking statements regarding our intentions, beliefs or
current expectations concerning, amongst other things, our results
of operations, financial condition, liquidity, prospects, growth,
strategies and the economic and business circumstances occurring
from time to time in the countries and markets in which the Group
operates.
These statements are often, but not
always, made through the use of words or phrases such as "believe,"
"anticipate," "could," "may," "would," "should," "intend," "plan,"
"potential," "predict," "will," "expect," "estimate," "project,"
"positioned," "strategy," "outlook", "target" and similar
expressions.
It is believed that the expectations
reflected in this document are reasonable, but they may be affected
by a wide range of variables that could cause actual results to
differ materially from those currently anticipated.
All such forward-looking statements
involve estimates and assumptions that are subject to risks,
uncertainties and other factors that could cause actual future
financial condition, performance and results to differ materially
from the plans, goals, expectations and results expressed in the
forward-looking statements and other financial and/or statistical
data within this communication.
Among the key factors that could
cause actual results to differ materially from those projected in
the forward-looking statements are uncertainties related to the
following: the impact of competition from illicit trade; the impact
of adverse domestic or international legislation and regulation;
changes in domestic or international tax laws and rates; adverse
litigation and dispute outcomes and the effect of such outcomes on
Airtel Africa's financial condition; changes or differences in
domestic or international economic or political conditions; the
ability to obtain price increases and the impact of price increases
on consumer affordability thresholds; adverse decisions by domestic
or international regulatory bodies; the impact of market size
reduction and consumer down-trading; translational and
transactional foreign exchange rate exposure; the impact of serious
injury, illness or death in the workplace; the ability to maintain
credit ratings; the ability to develop, produce or market new
alternative products and to do so profitably; the ability to
effectively implement strategic initiatives and actions taken to
increase sales growth; the ability to enhance cash generation and
pay dividends and changes in the market position, businesses,
financial condition, results of operations or prospects of Airtel
Africa.
Past performance is no guide to
future performance and persons needing advice should consult an
independent financial adviser. The forward-looking statements
contained in this document reflect the knowledge and information
available to Airtel Africa at the date of preparation of this
document and Airtel Africa undertakes no obligation to update or
revise these forward-looking statements, whether as a result of new
information, future events or otherwise. Readers are cautioned not
to place undue reliance on such forward-looking
statements.
No statement in this communication
is intended to be, nor should be construed as, a profit forecast or
a profit estimate and no statement in this communication should be
interpreted to mean that earnings per share of Airtel Africa plc
for the current or any future financial periods would necessarily
match, exceed or be lower than the historical published earnings
per share of Airtel Africa plc.
Financial data included in this
document are presented in US dollars rounded to the nearest
million. Therefore, discrepancies in the tables between totals and
the sums of the amounts listed may occur due to such rounding. The
percentages included in the tables throughout the document are
based on numbers calculated to the nearest $1,000 and therefore
minor rounding differences may result in the tables. Growth metrics
are provided on a constant currency basis unless otherwise stated.
The Group has presented certain financial information on a constant
currency basis. This is calculated by translating the results for
the current financial year and prior financial year at a fixed
'constant currency' exchange rate, which is done to measure the
organic performance of the Group. Growth rates for our reporting
regions and service segments are provided in constant currency as
this better represents the performance of the business.
Alternative performance measures (APMs)
Introduction
In the reporting of financial
information, the directors have adopted various APMs. These
measures are not defined by International Financial Reporting
Standards (IFRS) and therefore may not be directly comparable with
other companies APMs, including those in the Group's
industry.
APMs should be considered in
addition to, and are not intended to be a substitute for, or
superior to, IFRS measurements.
Purpose
The directors believe that these
APMs assist in providing additional useful information on the
underlying trends, performance and position of the
Group.
APMs are also used to enhance the
comparability of information between reporting periods and
geographical units (such as like-for-like sales), by adjusting for
non-recurring or uncontrollable factors which affect IFRS measures,
to aid users in understanding the Group's performance.
Consequently, APMs are used by the directors and management for
performance analysis, planning, reporting and incentive-setting
purposes.
The directors believe the following
metrics to be the APMs used by the Group to help evaluate growth
trends, establish budgets and assess operational performance and
efficiencies. These measures provide an enhanced understanding of
the Group's results and related trends, therefore increasing
transparency and clarity into the core results of the
business.
The following metrics are useful in
evaluating the Group's operating performance:
APM
|
Closest equivalent IFRS measure
|
Adjustments to reconcile to IFRS measure
|
Definition and
purpose
|
EBITDA and margin
|
Operating profit
|
· Depreciation and amortisation
|
The Group defines EBITDA as operating profit/(loss) for
the period
before depreciation and amortisation.
The Group defines EBITDA margin as
EBITDA divided by revenue.
EBITDA and margin are measures used
by the directors to assess the trading performance of the
business and are therefore the measure of segment profit that the Group presents under IFRS. EBITDA and margin are also
presented on a consolidated basis because the directors believe it
is important to consider profitability on a basis consistent with that of the Group's operating segments.
When presented on a
consolidated basis, EBITDA and margin are APMs.
Depreciation and amortisation is a
non-cash item which fluctuates depending on the timing of capital
investment and useful economic life. Directors believe that a
measure which removes this volatility improves comparability of the
Group's results period on period and hence is adjusted to arrive at
EBITDA and margin.
|
Underlying profit / (loss) before
tax
|
Profit / (loss) before tax
|
· Exceptional items
|
The Group defines underlying
profit/(loss) before tax as profit/(loss) before tax adjusted for
exceptional items.
The directors view underlying
profit/(loss) before tax to be a meaningful measure to analyse the
Group's profitability.
|
Effective tax rate
|
Reported tax rate
|
· Exceptional items
· Foreign exchange rate movements
· One-off tax impact of prior period, tax litigation settlement
and impact of tax on permanent differences
|
The Group defines effective tax rate
as reported tax rate (reported tax charge divided by reported
profit before tax) adjusted for exceptional items, foreign exchange
rate movements and one-off tax items of prior period adjustment,
tax settlements and impact of permanent differences on
tax.
This provides an indication of the
current on-going tax rate across the Group.
Foreign exchange rate movements are
specific items that are non-tax deductible in a few of the entities
which are loss making and/or where DTA is not yet triggered and
hence are considered to hinder comparison of the Group's effective
tax rate on a period-to-period basis and therefore excluded to
arrive at effective tax rate.
One-off tax impact on account of
prior period adjustment, any tax litigation settlement and tax
impact on permanent differences are additional specific items that
because of their size and frequency in the results, are considered
to hinder comparison of the Group's effective tax rate on a
period-to-period basis.
|
Underlying profit/(loss) after
tax
|
Profit/(loss) for the
period
|
· Exceptional items
|
The Group defines underlying
profit/(loss) after tax as profit/(loss) for the period adjusted
for exceptional items.
The directors view underlying
profit/(loss) after tax to be a meaningful measure to analyse the
Group's profitability.
|
Earnings per share before exceptional
items
|
EPS
|
· Exceptional items
|
The Group defines earnings per
share before exceptional items as profit/(loss) for the period
before exceptional items attributable to owners of the company
divided by the weighted average number of ordinary shares in issue
during the financial period.
This measure reflects the earnings
per share before exceptional items for each share unit of the
company.
|
Earnings per share before exceptional
items and derivative and foreign exchange losses
|
EPS
|
· Exceptional items
· Derivative and foreign exchange losses
|
The Group defines earnings per
share before exceptional items and derivative and foreign exchange
losses as profit/(loss) for the period before exceptional items and
derivative and foreign exchange losses (net of tax) attributable to
owners of the company divided by the weighted average number of
ordinary shares in issue during the financial period.
This measure reflects the earnings
per share before exceptional items and derivative and foreign
exchange losses for each share unit of the company.
Derivative and foreign exchange
losses are due to revaluation of US dollar balance sheet
liabilities and derivatives as a result of currency
devaluation.
|
Operating free cash flow
|
Cash generated from operating
activities
|
· Income tax paid
· Changes in working capital
· Other non-cash items
· Non-operating income
· Exceptional items
· Capital expenditures
|
The Group defines operating free
cash flow as net cash generated from operating activities before
income tax paid, changes in working capital, other non-cash items,
non-operating income, exceptional items, and after capital
expenditures. The Group views operating
free cash flow as a key liquidity measure, as it indicates the cash
available to pay dividends, repay debt or make further investments
in the Group.
|
Net debt and leverage
ratio
|
Borrowings
|
· Lease liabilities
· Cash and cash equivalent
· Term deposits with banks
· Deposits given against borrowings/ non-derivative financial
instruments
· Fair value hedges
|
The Group defines net debt as
borrowings including lease liabilities less cash and cash
equivalents, term deposits with banks, deposits given against
borrowings/non-derivative financial instruments, processing costs
related to borrowings and fair value hedge adjustments.
The Group defines leverage ratio as
net debt divided by EBITDA for the preceding 12 months.
The directors view net debt and the
leverage ratio to be meaningful measures to monitor the Group's
ability to cover its debt through its earnings.
|
Return on capital
employed
|
No direct equivalent
|
· Exceptional items to arrive at EBIT
|
The Group defines return on capital
employed ('ROCE') as EBIT divided by average capital
employed.
The directors view ROCE as a
financial ratio that measures the Group's profitability and the
efficiency with which its capital is being utilised.
The Group defines EBIT as operating
profit/(loss) for the period.
Capital employed is defined as sum
of equity attributable to owners of the company (grossed up for put
option provided to minority shareholders to provide them liquidity
as part of the sale agreements executed with them during year ended
31 March 2022), non-controlling interests and net debt. Average
capital employed is average of capital employed at the closing and
beginning of the relevant period.
For quarterly computations, ROCE is
calculated by dividing EBIT for the preceding 12 months by the
average capital employed (being the average of the capital employed
averages for the preceding four quarters).
|
Some of the Group's IFRS measures
and APMs are translated at constant currency exchange rates to
measure the organic performance of the Group. In determining the
percentage change in constant currency terms, both current and
previous financial reporting period's results have been converted
using exchange rates prevailing as on 31 March 2024 for all
countries. Reported currency percentage change is derived based on
the average actual periodic exchange rates for that financial
period. Variances between constant currency and reported currency
percentages are due to exchange rate movements between the previous
financial reporting period and the current period. The constant
currency numbers only reflect the retranslation of reported numbers
into exchange rates as of 31 March 2024 and are not intended to
represent the wider impact that currency changes have on the
business.
Statement of Director's Responsibilities
We confirm that to the best of our
knowledge:
a) The financial
statements, prepared in accordance with the relevant financial
reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the company
and the undertakings included in the consolidation taken as a
whole.
b) The management
report includes a fair review of the development and performance of
the business and the position of the company, and the undertakings
included in the consolidation taken as a whole, together with a
summary description of the principal risks and uncertainties that
they face.
c) The financial
statements include disclosure of related parties' transactions that
have taken place during the year and that have materially affected
the financial position or performance of the company.
This responsibility statement was
approved by the board of directors on 24 July 2024 and is signed on
its behalf by:
Sunil Taldar
Chief Executive Officer
24 July 2024
Glossary
Technical and Industry Terms
4G data customer
|
A customer having a 4G handset and who has
used at least 1 MB on any of the Group's GPRS, 3G and 4G network in
the last 30 days.
|
Airtel Money (mobile money)
|
Airtel Money is the brand name for Airtel
Africa's mobile money products and services. The term is used
interchangeably with 'mobile money' when referring to our mobile
money business, finance, operations and activities.
|
Airtel Money ARPU
|
Mobile money average revenue per user per
month. This is derived by dividing total mobile money revenue
during the relevant period by the average number of active mobile
money customers and dividing the result by the number of months in
the relevant period.
|
Airtel Money customer base
|
Total number of active subscribers who have
enacted any mobile money usage event in last 30 days.
|
Airtel Money customer penetration
|
The proportion of total Airtel Africa active
mobile customers who use mobile money services. Calculated by
dividing the mobile money customer base by the Group's total
customer base.
|
Airtel Money transaction value
|
Any financial transaction performed on Airtel
Africa's mobile money platform.
|
Airtel Money transaction value per customer
per month
|
Calculated by dividing the total mobile money
transaction value on the Group's mobile money platform during the
relevant period by the average number of active mobile money
customers and dividing the result by the number of months in the
relevant period.
|
Airtime credit service
|
A value-added service where the customer can
take an airtime credit and continue to use our voice and data
services, with the credit recovered through subsequent customer
recharge. This is classified as a Mobile Services product (not a
Mobile Money product).
|
ARPU
|
Average revenue per user per month. This is
derived by dividing total revenue during the relevant period by the
average number of customers during the period and dividing the
result by the number of months in the relevant period.
|
Average customers
|
The average number of active customers for a
period. Derived from the monthly averages during the relevant
period. Monthly averages are calculated using the number of active
customers at the beginning and the end of each month.
|
Capital expenditure
|
An alternative performance measure (non-GAAP).
Defined as investment in gross fixed assets (both tangible and
intangible but excluding spectrum and licences) plus capital work
in progress (CWIP), excluding provisions on CWIP for the
period.
|
Constant currency
|
The Group has presented certain financial
information that is calculated by translating the results at a
fixed 'constant currency' exchange rate, which is done to measure
the organic performance of the Group and represents the performance
of the business in a better way. Constant currency amounts and
growth rates are calculated using closing exchange rates as of 31
March 2024 for all reporting regions and service
segments.
|
Customer
|
Defined as a unique active subscriber with a
unique mobile telephone number who has used any of Airtel's
services in the last 30 days.
|
Customer base
|
The total number of active subscribers that
have used any of our services (voice calls, SMS, data usage or
mobile money transaction) in the last 30 days.
|
Data ARPU
|
Data average revenue per user per month. Data
ARPU is derived by dividing total data revenue during the relevant
period by the average number of data customers and dividing the
result by the number of months in the relevant period.
|
Data customer base
|
The total number of subscribers who have
consumed at least 1 MB on the Group's GPRS, 3G or 4G network in the
last 30 days.
|
Data customer penetration
|
The proportion of customers using data
services. Calculated by dividing the data customer base by the
total customer base.
|
Data usage per customer per month
|
Calculated by dividing the total MBs consumed
on the Group's network during the relevant period by the average
data customer base over the same period and dividing the result by
the number of months in the relevant period.
|
Digitalisation
|
We use the term digitalisation in its broadest
sense to encompass both digitisation actions and processes that
convert analogue information into a digital form and thereby bring
customers into the digital environment, and the broader
digitalisation processes of controlling, connecting and planning
processes digitally; the processes that effect digital
transformation of our business, and of industry, economics and
society as a whole through bringing about new business models,
socio-economic structures and organisational patterns.
|
Diluted earnings per share
|
Diluted EPS is calculated by adjusting the
profit for the year attributable to the shareholders and the
weighted average number of shares considered for deriving basic
EPS, for the effects of all the shares that could have been issued
upon conversion of all dilutive potential shares. The dilutive
potential shares are adjusted for the proceeds receivable had the
shares actually been issued at fair value. Further, the dilutive
potential shares are deemed converted as at beginning of the
period, unless issued at a later date during the period.
|
Earnings per share (EPS)
|
EPS is calculated by dividing the profit for
the period attributable to the owners of the company by the
weighted average number of ordinary shares outstanding during the
period.
|
Foreign exchange rate movements for non-DTA
operating companies
and holding companies
|
Foreign exchange rate movements are specific
items that are non-tax deductible in a few of our operating
entities, hence these hinder a like-for-like comparison of the
Group's effective tax rate on a period-to-period basis and are
therefore excluded when calculating the effective tax
rate.
|
Indefeasible Rights of Use (IRU)
|
A standard long-term leasehold contractual
agreement that confers upon the holder the exclusive right to use a
portion of the capacity of a fibre route for a stated
period.
|
Information and communication technologies
(ICT)
|
ICT refers to all communication technologies,
including the internet, wireless networks, cell phones, computers,
software, middleware, videoconferencing, social networking, and
other media applications and services.
|
Interconnect usage charges (IUC)
|
Interconnect usage charges are the charges
paid to the telecom operator on whose network a call is
terminated.
|
Lease liability
|
Lease liability represents the present value
of future lease payment obligations.
|
Leverage
|
An alternative performance measure (non-GAAP).
Leverage (or leverage ratio) is calculated by dividing net debt at
the end of the relevant period by the EBITDA for the preceding 12
months.
|
Minutes of usage
|
Minutes of usage refer to the duration in
minutes for which customers use the Group's network for making and
receiving voice calls. It includes all incoming and outgoing call
minutes, including roaming calls.
|
Mobile services
|
Mobile services are our core telecom services,
mainly voice and data services, but also including revenue from
tower operation services provided by the Group and excluding mobile
money services.
|
Net debt
|
An alternative performance measure (non-GAAP).
The Group defines net debt as borrowings including lease
liabilities less cash and cash equivalents, term deposits with
banks, processing costs related to borrowings and fair value hedge
adjustments.
|
Net debt to EBITDA (LTM)
|
An alternative performance measure (non-GAAP)
Calculated by dividing net debt as at the end of the relevant
period by EBITDA for the preceding 12 months (from the end of the
relevant period). This is also referred to as the leverage
ratio.
|
Network towers or 'sites'
|
Physical network infrastructure comprising a
base transmission system (BTS) which holds the radio transceivers
(TRXs) that define a cell and coordinates the radio link protocols
with the mobile device. It includes all ground-based, roof top and
in-building solutions.
|
Operating company (OpCo)
|
Operating company (or OpCo) is a defined
corporate business unit, providing telecoms services and mobile
money services in the Group's footprint.
|
Operating free cash flow
|
An alternative performance measure (non-GAAP).
Calculated by subtracting capital expenditure from
EBITDA.
|
Operating leverage
|
An alternative performance measure (non-GAAP).
Operating leverage is a measure of the operating efficiency of the
business. It is calculated by dividing operating expenditure
(excluding regulatory charges) by total revenue.
|
Operating profit
|
Operating profit is a GAAP measure of
profitability. Calculated as revenue less operating expenditure
(including depreciation and amortisation and operating exceptional
items).
|
Other revenue
|
Other revenue includes revenues from
messaging, value added services (VAS), enterprise, site sharing and
handset sale revenue.
|
Reported currency
|
Our reported currency is US dollars.
Accordingly, actual periodic exchange rates are used to translate
the local currency financial statements of OpCos into US dollars.
Under reported currency the assets and liabilities are translated
into US dollars at the exchange rates prevailing at the reporting
date whereas the statements of profit and loss are translated into
US dollars at monthly average exchange rates.
|
Smartphone
|
A smartphone is defined as a mobile phone with
an interactive touch screen that allows the user to access the
internet and additional data applications, providing additional
functionality to that of a basic feature phone which is used only
for making voice calls and sending and receiving text
messages.
|
Smartphone penetration
|
Calculated by dividing the number of
smartphone devices in use by the total number of
customers.
|
Total MBs on network
|
Includes total MBs consumed (uploaded and
downloaded) on the network during the relevant period.
|
EBIT
|
Defined as operating profit/(loss) for the
period adjusted for exceptional items.
|
EBITDA
|
An alternative performance measure (non-GAAP).
Defined as operating profit before depreciation, amortisation and
exceptional items.
|
EBITDA margin
|
An alternative performance measure (non-GAAP).
Calculated by dividing EBITDA for the relevant period by revenue
for the relevant period.
|
Unstructured Supplementary Service
Data
|
Unstructured Supplementary Service
Data (USSD), also known as "quick codes" or "feature codes", is a
communications protocol for GSM mobile operators, similar to SMS
messaging. It has a variety of uses such as WAP browsing, prepaid
callback services, mobile-money services, location-based content
services, menu-based information services, and for configuring
phones on the network.
|
Voice minutes of usage per customer per
month
|
Calculated by dividing the total number of
voice minutes of usage on the Group's network during the relevant
period by the average number of customers and dividing the result
by the number of months in the relevant period.
|
Weighted average number of shares
|
The weighted average number of shares is
calculated by multiplying the number of outstanding shares by the
portion of the reporting period those shares covered, doing this
for each portion and then summing the total.
|
Abbreviations
2G
|
Second-generation mobile technology
|
3G
|
Third-generation mobile technology
|
4G
|
Fourth-generation mobile technology
|
5G
|
Fifth-generation mobile technology
|
ARPU
|
Average revenue per user
|
bn
|
Billion
|
bps
|
Basis points
|
CAGR
|
Compound annual growth rate
|
Capex
|
Capital expenditure
|
CBN
|
Central Bank of Nigeria
|
CSR
|
Corporate social responsibility
|
DTA
|
Deferred Tax Asset
|
EBIT
|
Earnings before interest and tax
|
EBITDA
|
Earnings before interest, tax, depreciation
and amortisation
|
EPS
|
Earnings per share
|
FPPP
|
Financial position and prospects
procedures
|
GAAP
|
Generally accepted accounting
principles
|
GB
|
Gigabyte
|
HoldCo
|
Holding company
|
IAS
|
International accounting standards
|
ICT
|
Information and communication
technologies
|
ICT (Hub)
|
Information communication technology (Hub)
IFRS
|
IFRS
|
International financial reporting
standards
|
IMF
|
International monetary fund
|
IPO
|
Initial public offering
|
KPIs
|
Key performance indicators
|
KYC
|
Know your customer
|
LTE
|
Long-term evolution (4G technology)
|
LTM
|
Last 12 months
|
m
|
Million
|
MB
|
Megabyte
|
MI
|
Minority interest (non-controlling
interest)
|
NGO
|
Non-governmental organisation
|
OpCo
|
Operating company
|
P2P
|
Person to person
|
PAYG
|
Pay-as-you-go
|
QoS
|
Quality of service
|
RAN
|
Radio access network
|
SIM
|
Subscriber identification module
|
Single RAN
|
Single radio access network
|
SMS
|
Short messaging service
|
TB
|
Terabyte
|
Telecoms
|
Telecommunications
|
Unit of measure
|
Unit of measure
|
USSD
|
Unstructured supplementary service
data
|