TIDMAAF
RNS Number : 6874R
Airtel Africa PLC
30 October 2023
Airtel Africa plc
Results for half year ended 30 September 2023
30 October 2023
Highlights
Operating key performance indicators (KPIs)
-- Total customer base grew by 9.7% to 147.7 million, as the
penetration of mobile data and mobile money services continued to
rise, driving a 23.0% increase in data customers to 59.8 million
and a 23.1% increase in mobile money customers to 36.5 million.
-- Constant currency ARPU growth of 9.8% was driven by increased
usage across voice, data and mobile money.
-- Mobile money transaction value increased by 45.3% in constant
currency, with Q2'24 annualised transaction value of $116bn in
reported currency.
Financial performance
-- Revenue in constant currency grew by 19.7%, with reported
currency revenues up by 2.3% to $2,623m. In Q2'24, reported
currency revenues declined by 4.7% reflecting a full quarter's
impact of the Nigerian naira devaluation in June 2023. Q2'24
constant currency revenues increased by 19.0%.
-- Whilst reported currency revenue growth was impacted by
currency devaluation, all segments delivered double-digit constant
currency revenue growth. Across the Group mobile services revenue
grew by 18.3% in constant currency, driven by voice revenue growth
of 11.5% and data revenue growth of 28.1%. Mobile money revenue
grew by 30.9% in constant currency.
-- EBITDA increased by 21.2% in constant currency, and 3.7% in
reported currency to $1,302m, with an EBITDA margin of 49.6%,
reflecting a 70bps margin improvement over the prior period despite
inflationary cost pressures and foreign exchange headwinds.
Reported currency EBITDA declined by 3.3% in Q2'24 as the full
impact of the Nigerian naira devaluation in June 2023 was
incorporated.
-- Loss after tax was $13m driven largely by a foreign exchange
loss of $471m recorded in finance cost before tax and $317m after
tax because of the devaluation of the Nigerian naira in June 2023.
This impact has been classified as an exceptional item.
-- EPS before exceptional items was 7.0 cents, an improvement of
3.2%. EPS before exceptional items and excluding foreign exchange
and derivative losses was 10.7 cents. Basic EPS at negative (1.5
cents) compared to 7.9 cents in the prior period, was impacted by
$317m net exceptional loss on account of naira devaluation in June
2023.
Capital allocation
-- Capex of $312m was marginally higher compared to the prior
period. Capex guidance for the full year remains between $800m and
$825m as we continue to invest for future growth.
-- The remaining debt at HoldCo is $550m, falling due in May
2024. Cash at the HoldCo was $495m at the end of the period and the
Group is well positioned to fully repay the HoldCo debt when due.
Leverage of 1.3x in September 2023, was broadly stable despite the
foreign exchange impact on EBITDA as a result of the Nigerian naira
devaluation in June 2023.
-- The Board has declared an interim dividend of 2.38 cents per
share, an increase of 9%, in-line with our progressive dividend
policy.
Sustainability strategy
-- Our landmark five-year $57m partnership with UNICEF was
launched across nine of the 13 of our markets providing access to
educational resources, free of charge, on our way to reaching one
million children through our programmes by 2027.
-- Net zero journey continues with implementation of Scope 1 and
2 emissions reductions and development of a robust Scope 3
strategy, including stakeholder engagement.
Olusegun Ogunsanya, Group chief executive officer, on the
trading update:
"I am pleased to report a strong operating performance for the
Group despite foreign exchange headwinds in many of our markets and
specifically in Nigeria. The resilient growth in voice, data and
mobile money usage levels reflects the inherent demand for these
essential services across our footprint, and our six-pillar
'win-with' strategy continues to ensure we capture this growth
opportunity by expanding our customer base and providing the
platform to enable increased usage across the network. This strong
momentum is supported by continued cost efficiencies which enabled
further EBITDA margin expansion.
As reported in July 2023, our results for the first quarter were
significantly impacted by the changes to the FX market in Nigeria,
introduced by the Central Bank. Whilst the changes are required for
the long-term benefit of the Nigerian economy, the immediate impact
of the naira devaluation continues to weigh on our reported
financial performance in the period. Our focus remains to enhance
long term value by continuing to drive sustained and efficient
growth. Over the last five years we have delivered constant
currency revenue and EBITDA CAGR of 17.1% and 20.7% respectively,
allowing us to further de-risk the balance sheet and improve
profitability across the Group.
Looking forward, the delivery of affordable and reliable telecom
and mobile money services across our markets remains our key focus.
Our strong operating performance continues to make us a stronger
and bigger company, which is well positioned to deliver against the
growth opportunities these markets offer. Despite the challenges of
rising diesel prices in Nigeria, we aim to limit the impact with
continued operational leverage and further cost efficiencies to
deliver an improved EBITDA margin in FY'24 versus FY'23."
Alternative performance measures (APM) (1)
(Half year ended)
------------------------------------------------------------------------
Description Sep-23 Sep-22 Reported Constant
currency currency
------------------------------
$m $m change change
------------------------------ ------- ------- ---------- ----------
Revenue 2,623 2,565 2.3% 19.7%
------------------------------ ------- ------- ---------- ----------
EBITDA 1,302 1,255 3.7% 21.2%
------------------------------ ------- ------- ---------- ----------
EBITDA margin 49.6% 48.9% 70 bps 63 bps
------------------------------ ------- ------- ---------- ----------
EPS before exceptional items
($ cents) 7.0 6.8 3.2%
------------------------------ ------- ------- ---------- ----------
Operating free cash flow 990 945 4.8%
------------------------------ ------- ------- ---------- ----------
( (1) Alternative performance measures (APM) are described on
page 45.
GAAP measures
(Half year ended)
-----------------------------------------------------------------
Description Sep-23 Sep-22 Reported
currency
-----------------------------------
$m $m change
----------------------------------- ------- ------- ----------
Revenue 2,623 2,565 2.3%
----------------------------------- ------- ------- ----------
Operating profit 885 872 1.5%
----------------------------------- ------- ------- ----------
(Loss)/Profit after tax (13) 330 (103.8%)
----------------------------------- ------- ------- ----------
Basic EPS ($ cents) (1.5) 7.9 (118.5%)
----------------------------------- ------- ------- ----------
Net cash generated from operating
activities 1,121 1,011 10.8%
----------------------------------- ------- ------- ----------
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
Airtel Africa - Investor Relations
Pier Falcione +44 7446 858 280
Alastair Jones +44 7464 830 011
Investor.relations@africa.airtel.com +44 207 493 9315
Hudson Sandler
Nick Lyon
Emily Dillon
airtelafrica@hudsonsandler.com +44 207 796 4133
Conference call
Management will host an analyst and investor conference call at
12:00pm UK time (BST), on Monday 30(th) October 2023, 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 Half year ended Quarter ended
of measure
----------------- ------------------------------------------ ----------------------------------------
Sep-23 Sep-22 Reported Constant Sep-23 Sep-22 Reported Constant
currency currency currency currency
change change change change
% % % %
----------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Profit and loss
summary
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Revenue (1) $m 2,623 2,565 2.3% 19.7% 1,246 1,308 (4.7%) 19.0%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue $m 1,169 1,226 (4.6%) 11.5% 548 616 (11.1%) 11.2%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 915 864 5.9% 28.1% 429 446 (3.8%) 26.6%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
revenue
(2) $m 416 332 25.3% 30.9% 215 173 24.5% 30.5%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Other revenue $m 216 216 (0.0%) 18.9% 102 110 (7.2%) 18.2%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Expenses $m (1,337) (1,316) 1.6% 19.0% (635) (671) (5.4%) 18.7%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
EBITDA (3) $m 1,302 1,255 3.7% 21.2% 620 641 (3.3%) 20.1%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
EBITDA margin % 49.6% 48.9% 70 bps 63 bps 49.8% 49.0% 73 bps 44 bps
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Depreciation and
amortisation $m (417) (383) 8.8% 27.4% (197) (195) 1.1% 27.5%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Operating
exceptional
items $m - - 0.0% 0.0% - - 0.0% 0.0%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Operating profit $m 885 872 1.5% 18.5% 423 446 (5.2%) 16.9%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Other finance
cost - net of
finance income $m (402) (358) 12.4% (190) (206) (7.6%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Finance cost - $m (471) - - - - -
exceptional
items
(4)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Total finance
cost $m (873) (358) (144.1%) (190) (206) (7.6%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
(Loss)/Profit
before tax $m 12 516 (97.7%) 233 240 (3.1%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Tax (5) $m (179) (228) (21.5%) (95) (109) (13.2%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Tax -
exceptional
items (4, 6) $m 154 42 270.0% - 21 (100.0%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Total tax
credit/(charge) $m (25) (186) (86.7%) (95) (88) 7.3%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
(Loss)/Profit
after tax $m (13) 330 (103.8%) 138 152 (8.8%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Non-controlling
interest $m (42) (34) 22.4% (23) (19) 16.0%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Profit
attributable
to owners of
the
company -
before
exceptional
items $m 262 254 3.1% 115 112 3.3%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
(Loss)/Profit
attributable to
owners of the
company $m (55) 296 (118.4%) 115 133 (13.2%)
----------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
EPS - before
exceptional
items cents 7.0 6.8 3.2% 3.1 3.0 2.9%
================= ============= ======== ======== ========== ========== ======= ======= ========== ==========
Basic EPS cents (1.5) 7.9 (118.5%) 3.1 3.5 (13.2%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Weighted average
number of
shares million 3,751 3,753 (0.1%) 3,751 3,752 (0.0%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Capex $m 312 310 0.5% 172 169 1.3%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Operating free
cash flow $m 990 945 4.8% 448 472 (5.0%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Net cash
generated
from operating
activities $m 1,121 1,011 10.8% 541 622 (13.2%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Net debt $m 3,327 3,278 3,327 3,278
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Leverage (net
debt to EBITDA) times 1.3x 1.3x 1.3x 1.3x
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Return on
capital 127 (4)
employed % 24.7% 23.5% bps 23.7% 23.7% bps
----------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Operating KPIs
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
ARPU $ 3.0 3.2 (6.2%) 9.8% 2.9 3.3 (13.0%) 8.6%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Total customer
base million 147.7 134.7 9.7% 147.7 134.7 9.7%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Data customer
base million 59.8 48.6 23.0% 59.8 48.6 23.0%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
customer
base million 36.5 29.7 23.1% 36.5 29.7 23.1%
----------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
(1) Revenue includes inter-segment eliminations of $93m for the
half year ended 30 September 2023 and $73m for the prior
period.
(2) Mobile money revenue post inter-segment eliminations with
mobile services was $323m for the half year ended 30 September
2023, and $259m for the prior period.
(3) EBITDA includes other income of $16m for the half year ended
30 September 2023 and $6m for the prior period.
(4) Exceptional items of $471m for the half year ended 30
September 2023 is on account of derivative and foreign exchange
losses due to Nigerian naira devaluation in June 2023 (from 465.1
NGN/USD in May 2023 to 752.2 NGN/USD in June 2023). This has
resulted in an exceptional tax gain of $154m. Hence, there was a
negative impact of $317m on loss after tax.
(5) The tax charge of $179m is net of a tax gain of $30m arising
from reversal of deferred tax liability on account of a reduction
of undistributed retained earnings of Nigeria. This reduction is an
indirect consequence of a one-time exceptional foreign exchange
loss of $471m. The $30m tax gain is not treated as exceptional.
(6) Tax exceptional items in the half year ended 30 September
2022 reflect the initial recognition of a deferred tax credit of
$42m in Kenya.
Financial review for half year ended 30 September 2023
Revenue in reported currency grew by 2.3%, with constant
currency growth of 19.7% for the Group. The gap in constant and
reported currency revenue growth of 17.4% in H1'24 is primarily due
to the impact of average currency devaluations between the periods,
mainly in the Nigerian naira (51.7%), the Zambian kwacha (14.9%),
the Kenyan shilling (19.3%), the Malawi kwacha (10.6%), the
Madagascar ariary (8.8%) and the Tanzania shilling (4.0%), in turn,
partially offset by appreciation in the Central African franc
(4.9%).
Double digit constant currency revenue growth was posted across
all reporting segments. In mobile services, revenue in Nigeria was
up by 21.7%, East Africa up by 20.6% and Francophone Africa by
10.9%, respectively. Group mobile services revenue grew by 18.3%,
with voice revenue growth of 11.5%, data revenue growth of 28.1%
and other revenues growing by 19.0%. Mobile money revenue grew by
30.9% in constant currency, driven by growth of 34.9% in East
Africa and 18.7% in Francophone Africa, respectively.
During the period, the Nigerian naira devalued from 461 per US
dollar to 777, resulting in a 40.6% appreciation in the US dollar
since 31 March 2023. The most significant part of the devaluation
occurred in June 2023 when the Nigerian naira devalued to 752
NGN/USD, resulting in only a partial impact on revenue and EBITDA
in the reporting period. If the closing rate of 777 NGN/USD were to
be used to consolidate the results of the Group for the half year
ended 30 September 2023, reported revenues would have declined by
5.1% to $2,434m, as opposed to 2.3% growth which was reported.
Similarly, reported EBITDA would have declined by 4.1% to $1,204m,
as opposed to the 3.7% growth reported.
The translation impact of the Nigerian naira devaluation to 777
NGN/USD over the period is expected to be between $900m and $950m
on annualised revenue and between $450m and $500m on annualised
EBITDA. The impact of the Nigerian naira devaluation on reported
revenue and EBITDA for the period ending 30 September 2023 was
$283m and $153m, respectively.
Total finance costs increased from $358m to $873m during the
period. The primary driver of this increase was the $471m
exceptional item reflecting the revaluation impact of USD balance
sheet liabilities and derivatives in Nigeria following the naira
devaluation in June 2023 (for a more detailed explanation, refer to
the Q1'24 RNS). Excluding this exceptional item, finance costs
increased by $44m largely as a result of increased debt in the
operating entities which carries a higher average interest
rate.
Total tax charges primarily reflected an exceptional gain of
$154m on account of the Nigerian naira devaluation during the
current period compared with the deferred tax credit of $42m in
Kenya in the prior period, hence a higher exceptional gain of
$112m. Tax charges excluding exceptional items was $179m compared
to $228m in the prior period. Basic EPS at negative (1.5 cents) was
largely impacted by the derivative and exchange loss following the
Nigerian naira devaluation in June 2023. EPS before exceptional
items and excluding foreign exchange and derivative losses was 10.7
cents, up by 0.2 cents.
Leverage at 1.3x was broadly unchanged. Following the prepayment
of $450m bonds in July 2022, the remaining debt at HoldCo is now
$550m. Cash at the HoldCo was $495m at the end of the period and
the Group is well positioned to fully repay the HoldCo debt when
due in May 2024. The EBITDA used to calculate the leverage ratio of
1.3x is based on the last 12 months to September 2023 and,
therefore, does not fully incorporate the impact from the
devaluation of the Nigerian naira. On a 12 months basis, after
including the impact of the Nigeria naira devaluation seen to date
on both the P&L and balance sheet, the leverage ratio is
expected to be between 1.3x and 1.4x.
GAAP measures
Revenue
Reported revenue increased to $2,623m, up by 2.3% in reported
currency, and by 19.7% in constant currency driven by both customer
base growth of 9.7% and ARPU growth of 9.8%. Reported revenues
declined by 4.7% in Q2'24 reflecting the full impact of the
Nigerian naira devaluation in June 2023. The constant currency
revenue growth was partially offset by average currency
devaluations between the periods, mainly in the Nigerian naira
(51.7%), the Zambian kwacha (14.9%), the Kenyan shilling (19.3%),
the Malawi kwacha (10.6%), the Madagascar ariary (8.8%) and the
Tanzania shilling (4.0%) in turn partially offset by appreciation
in the Central African franc (4.9%).
Mobile services revenue grew by 18.3% in constant currency,
supported by growth of 21.7% in Nigeria, 20.6% in East Africa and
10.9% in Francophone Africa, respectively. Mobile money revenue
grew by 30.9% in constant currency, driven by revenue growth in
East Africa of 34.9% and Francophone Africa of 18.7%.
During the period, the Nigerian naira devalued from 461 per US
dollar to 777, resulting in a 40.6% appreciation in the US dollar
since 31 March 2023. The most significant part of the devaluation
occurred in June 2023 when the Nigerian naira devalued to
752NGN/USD, resulting in only a partial impact on revenues for the
reporting period. If the closing rate of 777 NGN/USD were to be
used to consolidate the results of the Group for the half year
ended 30 September 2023, reported revenues would have declined by
5.1% to $2,434m, as opposed to 2.3% growth which was reported.
The translation impact of the Nigerian naira devaluation to 777
NGN/USD over the period is expected to be between $900m and $950m
on annualised revenue. The Nigerian naira devaluation impacted
revenues by $283m during the period ended 30 September 2023.
Operating profit
Operating profit in reported currency increased by 1.5% to $885m
as a result of revenue growth and continued improvements in
operating efficiency across the Group.
Net finance costs
Net finance costs (including loss on foreign exchange and
derivatives and an exceptional item due to the Nigerian naira
devaluation in June 2023) increased by $515m to $873m in the half
year. Of the $515m, $471m related to the Nigerian naira devaluation
in June 2023 which has been reported as an exceptional item.
Adjusting for this exceptional item, net finance costs (including
loss on foreign exchange and derivatives) increased by $44m,
largely driven by higher interest on market debt predominantly
resulting from spectrum acquisitions and licence renewal payments
made over the last year and higher interest on lease
liabilities.
The Group's effective interest rate increased to 8.8% compared
to 6.4% in the prior period, largely driven by higher local
currency debt at the OpCo level, in line with our strategy to move
more debt into our operating entities.
Taxation
Total tax charges reflected an exceptional gain of $154m on
account of the Nigerian naira devaluation during the current half
year compared with deferred tax credit of $42m in Kenya in the
prior period, hence a higher exceptional gain of $112m. Tax charges
excluding exceptional items was $179m as compared to $228m in the
prior period. The tax charge of $179m is net of a tax gain of $30m
arising from the reversal of deferred tax liability on account of a
reduction of undistributed retained earnings of Nigeria. This
reduction is an indirect consequence of the impact of the Nigerian
naira devaluation. Total tax charges were $25m as compared to $186m
in the prior period.
Profit after tax
Profit after tax was negative ($13m) largely driven by $654m of
foreign exchange and derivative losses as a result of the
revaluation of foreign currency liabilities in the OpCos. In
particular, the devaluation of the Nigerian naira in June 2023
resulted in a foreign exchange loss of $317m after tax. The impact
of the Nigerian naira devaluation has been classified as an
exceptional item. Excluding the impact of these exceptional items,
profit after tax would be $304m, compared to $288m in the prior
period.
Basic EPS
Basic EPS at negative (1.5 cents), as compared to 7.9 cents in
the prior period, was impacted by $317m net exceptional loss on
account of naira devaluation in the month of June 2023. EPS before
exceptional items and excluding foreign exchange and derivative
losses was 10.7 cents. During the period we benefitted from a $30m
one-off gain arising from reversal of deferred tax liability on
account of the reduction of undistributed retained earnings of
Nigeria. This reduction is an indirect consequence of the impact of
the Nigerian naira devaluation.
Net cash generated from operating activities
Net cash generated from operating activities was $1,121m, 10.8%
higher than the $1,011m of the prior period. This was largely due
to lower cash tax payments (higher tax payment in last year due to
higher dividend tax) and higher operating cash flows.
Alternative performance measures [1]
EBITDA
EBITDA increased to $1,302m, up by 3.7% in reported currency,
and by 21.2% in constant currency. Growth in EBITDA was led by
revenue growth and supported by continued improvement in operating
efficiencies which more than offset inflationary cost pressures.
The EBITDA margin improved by 70 basis points in reported currency
to 49.6%. In Q2'24, EBITDA margins did benefit from a 15% reduction
in Nigerian diesel prices compared to the prior period.
Foreign exchange had an adverse impact of $345m on revenue, and
$165m on EBITDA, as a result of average currency devaluations,
mainly in the Nigerian naira (51.7%), the Zambian kwacha (14.9%),
the Kenyan shilling (19.3%), the Malawi kwacha (10.6%), the
Madagascar ariary (8.8%) and the Tanzania shilling (4.0%) in turn
partially offset by appreciation in the Central African franc
(4.9%).
During the period, the Nigerian naira devalued from 461 per US
dollar to 777, resulting in a 40.6% appreciation in the US dollar
since 31 March 2023. The most significant part of the devaluation
occurred in June 2023, when the Nigerian naira devalued to 752
NGN/USD, resulting in only a partial impact on EBITDA for the
reporting period. If the closing rate of 777 NGN/USD were to be
used to consolidate the results of the Group for the half year
ended 30 September 2023, reported EBITDA would have declined by
4.1% to $1,204m, as opposed to 3.7% growth which was reported.
The translation impact of the Nigerian naira devaluation to 777
NGN/USD during the period is expected to be between $450m and $500m
on annualised EBITDA. The impact of the Nigerian naira devaluation
on reported EBITDA for the period ending 30 September 2023 was
$153m.
With respect to currency devaluation sensitivity going forward,
on a 12-month basis, a further 1% USD appreciation across all
currencies in our OpCos would have a negative impact of $49m on
revenues, $24m on EBITDA and $19m on finance costs (excluding
derivatives). Our largest exposure is to the Nigerian naira, for
which a further 1% USD appreciation would have a negative impact of
$14m on revenues, $8m on EBITDA and $7m on finance costs (excluding
derivatives). This sensitivity analysis assumes the USD
appreciation occurs at the beginning of the period.
For detailed disclosure on the currency devaluation risk posed
to the Group, see 'Risk Factors'.
Tax
The effective tax rate was 39.0%, compared to 39.4% in the prior
period, largely due to profit mix changes amongst the OpCos and the
lower impact of withholding taxes on dividends. The effective tax
rate is higher than the weighted average statutory corporate tax
rate of approximately 33%, largely due to the profit mix between
various OpCos and withholding taxes on dividends by
subsidiaries.
Exceptional items
The exceptional item of $471m is on account of derivative and
foreign exchange losses following the Nigerian naira devaluation in
June 2023 (from 465 NGN/USD in May 2023 to 752 NGN/USD in Jun
2023). This has resulted in an exceptional tax gain of $154m. Tax
exceptional items in the previous period benefited from the initial
recognition of a deferred tax credit of $42m in Kenya.
EPS before exceptional items
EPS before exceptional items was at 7.0 cents, 3.2% higher
compared to 6.8 cents in the prior period. Current period EPS was
negatively impacted due to higher finance cost including foreign
exchange and derivative losses. EPS before exceptional items and
excluding foreign exchange and derivative losses was 10.7 cents, up
by 0.2 cents. During the period we benefitted from a $30m one-off
gain arising from reversal of deferred tax liability on account of
the reduction of undistributed retained earnings of Nigeria. This
reduction is an indirect consequence of the impact of the Nigerian
naira devaluation.
Operating free cash flow
Operating free cash flow was $990m, up by 4.8%, as a result of
higher EBITDA during the period. Capital expenditure during the
period of $312m was marginally higher compared to the prior
period.
Leverage
Leverage (net debt to EBITDA) at 1.3x in September 2023 was
stable over the prior period despite $500m of spectrum investment
in the last fiscal year and the renewal of the 2100 MHz spectrum
licence in Nigeria in the period. Following the prepayment of $450m
bonds in July 2022, the remaining debt at HoldCo is now $550m,
falling due in May 2024. Cash at HoldCo was $495m at the end of the
period and the Group is well positioned to fully repay the HoldCo
debt when due.
The EBITDA used to calculate the leverage ratio of 1.3x is based
on the last 12 months and, therefore, does not fully incorporate
the impact from the devaluation of the Nigerian naira. On a 12
months basis, after including the impact of the Nigerian naira
devaluation seen to date on both the P&L and balance sheet, the
leverage ratio is expected to be between 1.3x and 1.4x.
Other significant updates
Nigerian naira devaluation
On 14 June 2023, the Central Bank of Nigeria (CBN) announced
changes to the operations in the Nigerian Foreign Exchange (FX)
market, including the abolishment of segmentation, with all
segments now collapsing into the Investors and Exporters (I&E)
window and the reintroduction of the 'Willing Buyer, Willing
Seller' model at the I&E window. As a result of the CBN
decision, the US dollar has appreciated against the Nigerian naira
in the I&E window. The market expectation is that the new
foreign currency policy and subsequent realignment of the several
market exchange rates will provide greater US dollar liquidity over
time and help to alleviate the challenges faced in the last few
years to access US dollars in the market.
The Group continues to invest in Nigeria to enable it to capture
the growth opportunity. This continued investment will facilitate
growth, drive continued digitalisation across the country,
facilitate economic progress and transform lives across
Nigeria.
Nigeria 2100 MHz spectrum renewal
On 9 May 2023, the Group announced that its Nigerian subsidiary,
Airtel Networks Limited ('Airtel Nigeria'), had made a payment of
NGN58.7bn ($127.4m), payable to the Nigerian Communications
Commission (NCC), to renew its 2x10MHz 2100 MHz spectrum licence,
which will be valid for a period of 15 years following the expiry
of the previous licence (30 April 2022).
This investment to renew the licence reflects our continued
confidence in the opportunity inherent across the Nigerian market,
supporting the local communities and economies through furthering
digital inclusion and connectivity.
Uganda spectrum
The regulator had previously issued an invitation to apply for
spectrum in various bands (700, 800, 2300, 2600, 3300, 3500, etc).
On 7 June 2023, Airtel Uganda has submitted its application for
acquisition of additional spectrum of 10 MHz in 800 band, 100 MHz
in 3500 band and 500 MHz in E-band along with a bank guarantee of
$1.5m. There is no upfront payout for spectrum but, instead, there
is an annual payout of $1.2m for a period of 17 years, which is the
validity period for the spectrum. On 26 June 2023, the Uganda
Communications Commission confirmed that Airtel Uganda Limited had
qualified for the award of the 800 MHz and 3500 MHz spectrum.
Uganda IPO update
Under Article 16 of Uganda's National Telecom Operator ('NTO')
licence, Airtel Uganda Limited is obliged to comply with the sector
policy, regulations and guidelines requiring the listing of part of
its shares on the Uganda Stock Exchange. The current Uganda
Communications (Fees & Fines) (Amendment) Regulations 2020,
creates a public listing obligation for all NTO licensees, and
specifies that 20% of the shares of the operator must be listed
within two years of the date of the effective date of the licence.
Airtel Uganda applied for an extension of listing date and was
granted a 1-year extension to 16 December 2023.
On 29 August 2023, Airtel Uganda Limited issued a prospectus in
relation to the offer for sale of 8,000,000,000 ordinary shares,
representing 20% of Airtel Uganda Limited. The listing of Airtel
Uganda Limited will be on the Main Investment Market Segment of the
Uganda Securities Exchange. The offer closed on 27 October 2023,
with the announcement of allocation on 6 November 2023, and the
admission to listing on 7 November 2023.
Further details on the Uganda IPO can be found at
https://www.airtel.co.ug/ipo-ug.
Share capital reduction
On 15 August 2023, Airtel Africa announced the cancellation and
extinction of all of its deferred shares of USD 0.50 nominal value
each (the 'capital reduction'), which was approved by shareholders
at the annual general meeting of the Company held on 4 July 2023.
The cancellation and extinction was sanctioned by the High Court of
England and Wales (the 'High Court'). The effect of the capital
reduction is to create additional distributable reserves which will
be available to the company going forward and may be used to
facilitate returns to shareholders in the future, whether in the
form of dividends, distributions or purchases of the company's own
shares.
The company confirms that, following the capital reduction, the
issued share capital of the company will be 3,758,151,504 ordinary
shares of USD 0.50 nominal value each, carrying one vote each.
There are no shares held in treasury. The total voting rights in
the company therefore will be 3,758,151,504.
Dividend payment timetable
The board has declared an interim dividend of 2.38 cents per
share for the period ended 30 September 2023, payable on 15
December 2023 to shareholders recorded in the register at the close
of business on 10 November 2023.
Last day to trade shares cum dividend 8 November 2023
Shares commence trading ex-dividend 9 November 2023
Record date 10 November 2023
Currency election date 27 November 2023
Payment date 15 December 2023
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
Strategic overview
The Group provides telecoms and mobile money services in 14
emerging markets of sub-Saharan Africa. Our markets are
characterised by huge geographies with relatively sparse
populations, high population growth rates, high proportions of
youth, low smartphone penetration, low data penetration and
relatively unbanked populations. Unique mobile user penetration
across the Group's footprint is around 48%, and banking penetration
remains under 50%. These indicators illustrate the significant
opportunity still available to Airtel Africa to enhance both
digital and financial inclusion in the communities we serve,
enriching and transforming their lives through digitalisation,
whilst at the same time growing our revenues profitably across each
of our key services of voice, data and mobile money.
The Group continues to invest in its network and distribution
infrastructure to enhance both mobile connectivity and financial
inclusion across our countries of operation. In particular, we
continued to invest in expanding our 4G network footprint to
increase data capacity in our networks to support future business
growth, as well as deploying new sites, especially in rural areas,
to enhance coverage and connectivity.
We describe our 'win with' strategy through six strategic
pillars. Our customers are at the core of our strategy, through our
corporate purpose of transforming lives.
Our focus on digitalisation, of our products and services as
well as our internal systems and processes, increasingly functions
as a catalyst, or an 'accelerator', for each of our strategic
pillars.
Underpinning the Group's business strategy for growth is our
sustainability strategy which supports our well--established
corporate purpose of transforming lives, our continued commitment
to driving sustainable development and acting as a responsible
business. Our sustainability strategy sets out our goals and
commitments to foster financial inclusion, bridge the digital
divide and serve more customers in some of the least penetrated
telecommunication markets in the world.
This year, we continued to make strong progress across each of
our core strategic pillars: 'Win with technology', 'Win with
distribution', 'Win with data', 'Win with mobile money', 'Win with
cost' and 'Win with people'.
Win with technology
The Group remains focused on delivering best-in-class services,
expanding 4G networks and launched new 5G technology in key markets
including Kenya, Nigeria, Tanzania, Uganda and Zambia by investing
in 5G spectrum. Reaching underserved communities is a key priority,
and we continue to increase rural coverage through new site
rollouts, additional spectrum and new technology investments across
our markets - despite inflationary challenges during the year.
As part of ensuring our services are future ready, in addition
to purchasing spectrum, we grew our fibre infrastructure and tested
our 5G capabilities. After exploring the potential for additional
third-party revenue streams, we have invested in data centres to
further support digital inclusion across our markets. We continued
to strengthen our fibre business, which is now delivering
encouraging revenue growth. During the year we added a further
5,000 km of fibre, with a total of 73,600 km now deployed.
Additionally, we expanded our international data capacity via
submarine cables by 100%.
Overall, the capacity investment has resulted in a 48.8%
increase in data capacity - reaching 28,200+ terabytes (TB) per
day, with peak hour data utilisation at 48.3% allowing for
increased network resilience and an enriched service
continuity.
The Group has continued to invest in spectrum across several
markets which will underpin its growth ambitions. In Nigeria, we
acquired 5G spectrum in the 3500 MHz band, and also added to our
2600 MHz spectrum. We also acquired spectrum in Tanzania, Uganda,
Zambia, Kenya, Malawi, the DRC, and the Seychelles, which will help
us to maximise network capacity and coverage.
Following substantial spectrum acquisitions over the last year,
we further invested in the renewal of 2100 MHz spectrum in Nigeria
during the period. Continued investment into spectrum across our
markets will further enhance network capacity and coverage.
Win with distribution
We continue to strengthen our exclusive channel of
kiosks/mini-shops and Airtel Money branches along with multi-brand
outlets in both urban and rural markets. We offer a simplified and
enhanced Know Your Customer (KYC) app to provide a seamless
customer onboarding experience. These have enabled us to add
customers, resulting in customer base growth of 9.7%, and helped us
grow voice revenue by 11.5% in constant currency.
The Group continued its investment in strengthening our
distribution network infrastructure, with a focus on rural
distribution networks. During the period, the Group expanded its
exclusive franchise stores, adding around 19,000 kiosks and mini
shops (taking the total to almost 81,000 kiosks and mini shops) and
900 Airtel Money branches (AMBs) across our footprint. The Group
also added more than 27,900 activating outlets, an increase of
9%.
Win with data
With continued investments in the expansion of our 4G network
and launching 5G in several OpCos, the clear focus is on enhancing
the customer experience across the network. This is not only for
mobile users but also for broadband enterprise users to support
continued data ARPU and data revenue growth.
Expansion of the 4G network and improved user experience has
helped drive increased smartphone penetration, customer ARPU and
consumption per data user across the segments. Smartphone
penetration was up 2.6 percentage points to 37.7% and data customer
grew by 23.0%, now representing 40.5% of our total base. Data usage
per customer per month also grew by 19.4% and reached 5.1 GB per
month from 4.3 GB a year ago. This increase was led by increased
smartphone penetration and an expansion of our home broadband and
enterprise customers.
All the above contributed to a 28.1% growth in constant currency
data revenue. 4G handset users data usage constituted 79.6% of
total data usage on the network in Q2'24 growing at 53.9%, with 4G
data usage per data customer of over 8.4GB per month.
Win with mobile money
The low penetration of traditional banking services across our
footprint leaves a large number of unbanked customers whose needs
can be largely fulfilled through mobile money services. We aim to
drive the uptake of Airtel Money services in all our markets,
harnessing the ability of our profitable mobile money business
model to enhance financial inclusion in some of the most 'unbanked'
populations in the world.
During the period, we focussed on growing our ecosystem and
driving customer acquisition. We launched new international money
transfer routes, as well as new loan products and continued to
integrate more partners into our ecosystem.
We continued to expand our exclusive distribution channel of
AMBs and kiosks to ensure availability of services to customers,
even in the rural areas. The number of kiosks and mini shops
increased by 31% and Airtel Money branches by over 9%. Furthermore,
our non-exclusive channel of mobile money agents expanded by 46%,
following implementation of our digital on-boarding journey. Our
distribution expansion and enhanced offerings helped drive 23.1%
growth in our mobile money customer base, now serving 36.5 million
customers, which represents 24.8% of our total customer base.
Our Nigeria PSB license remains an opportunity for the Group.
During this half year, we accelerated our customer acquisition
strategy and our customer base is 1.9 million active customers. We
continue to build the ecosystem to grow our transaction value.
Along with data, mobile money continues to be one of our fastest
growing services, delivering revenue growth of 30.9% in half year.
It is an increasingly important part of our business, with $116bn
of Q2'24 annualised transaction value in reported currency. Mobile
money revenue accounts for 15.9% of the Group revenues in the
period.
Mobile money ARPU increased by 6.3% in constant currency over
the period, driven by increased transaction values and higher
contributions from cash transactions, P2P transfers and mobile
services recharges through Airtel Money.
Win with cost
Despite the impact of inflationary pressure across the Group and
continuing high fuel prices across countries, our 'win with cost'
initiatives have supported the resilience of our profitability.
We continue our focus on enhancing cost efficiency through
changes in the operating design and response to the macroeconomic
changes, an example of which is the roll out of a majority of new
sites using green initiatives (solar, batteries and grid
connection). We embrace robust cost discipline and continuously
seek to improve our processes to reduce operating costs, delivering
one of the highest EBITDA margins in the industry. We also continue
to embrace the latest technology to optimally design our networks
and improve our capital expenditure efficiency enabling us to build
large incremental capacities at lower marginal cost.
We are undertaking various cost efficiency initiatives to
mitigate the headwinds, relating mainly to: (i) working with tower
companies (towecos) to invest more in energy efficient equipment
(including in lithium batteries and solar equipment), (ii) enhance
grid connectivity, (iii) transmission re-routing to optimise lease
line capacity and (iv) shift towards digital recharges, especially
through Airtel Money to reduce commission pay-outs.
Win with people
Our ongoing commitment to listen to our employees remains
robust. The next engagement survey will be conducted in July 2024
to measure employee sentiment on critical matters affecting them
such as collaboration, values, reward and most importantly
engagement. Currently the employee engagement survey scores remain
at 81%, being 2% higher than the previous survey.
We recognise the importance of having diverse teams in light of
the diverse communities we serve across our 14 OpCos. Gender
diversity remains a key focus area and currently stands at 27.2%,
and we had an increase of different nationalities to 41. Additional
focus on accelerating the recruitment and promotion by merit of
female talent within the business is ongoing.
Building our talent capability and capacity remains a key focus
and we encourage our teams to take ownership of their learning
through our online learning platforms, on-the-job training, and
coaching. In addition to this, building leadership capability and
functional expertise remains at the heart of our learning and
development programmes. An example of our capacity and capability
building programme includes the Airtel Africa mobility programme
which was designed to support talent retention, development, and
succession planning. The programme provides exposure and learning
opportunities to high potential and top performing talent as part
of an accelerated career development programme.
Our high-performance culture is a core pillar of the people
strategy to drive business performance. This is aligned to our
reward philosophy where 'pay for performance' based on key result
areas which each employee is measured on.
We recognise the value of providing a great work experience for
our people. We are keen to translate these experiences into
transformational experiences - for all our employees and those in
the communities we serve.
Financial review for half year ended 30 September 2023
Nigeria - Mobile services
Description Unit Half year ended Quarter ended
of
measure
---------------------- ---------- ---------------------------------------- ----------------------------------------
Sep-23 Sep-22 Reported Constant Sep-23 Sep-22 Reported Constant
currency currency currency currency
change change change change
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Summarised statement
of
Operations
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Revenue $m 878 1,040 (15.6%) 21.7% 350 523 (33.1%) 20.4%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue
(1) $m 414 512 (19.0%) 16.1% 161 253 (36.4%) 14.4%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 385 431 (10.7%) 29.3% 157 221 (29.1%) 27.6%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Other revenue
(2) $m 79 97 (19.1%) 17.0% 32 49 (34.1%) 18.6%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
EBITDA $m 474 533 (11.0%) 28.7% 190 259 (26.5%) 32.3%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
279 295 491 489
EBITDA margin % 54.0% 51.2% bps bps 54.4% 49.5% bps bps
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Depreciation
and amortisation $m (156) (156) (0.1%) 46.1% (66) (81) (18.7%) 46.2%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating exceptional
items $m - - 0.0% 0.0% - - 0.0% 0.0%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating profit $m 298 360 (17.2%) 18.5% 116 169 (31.4%) 23.6%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Capex $m 109 134 (18.4%) (18.4%) 62 77 (20.4%) (20.4%)
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating free
cash flow $m 365 399 (8.5%) 66.4% 128 182 (29.2%) 90.3%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating KPIs
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Total customer
base million 48.6 46.3 5.0% 48.6 46.3 5.0%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data customer
base million 24.2 20.6 17.4% 24.2 20.6 17.4%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile services
ARPU $ 3.0 3.8 (20.0%) 15.3% 2.4 3.8 (36.4%) 14.5%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
(1) Voice revenue includes inter-segment revenue of $1m in the
half-year ended 30 September 2022. Excluding inter-segment revenue,
voice revenue was $511m in half-year ended 30 September 2022.
(2) Other revenue includes inter-segment revenue of $1m in the
half-year ended 30 September 2023 and in the prior period.
Excluding inter-segment revenue, other revenue was $78m in
half-year ended 30 September 2023 and $96m in the prior period.
Revenue declined by 15.6% in reported currency to $878m and grew
by 21.7% in constant currency. The differential in growth rates is
primarily attributed to the 51.7% average devaluation in Nigerian
naira. Q2'24 reported currency revenues declined by 33.1%
reflecting the full impact of the Nigerian naira devaluation in
June 2023. The constant currency revenue growth was driven by both
customer base growth of 5.0% and ARPU growth of 15.3%, largely
driven by higher data revenue growth.
Voice revenue grew by 16.1% in constant currency, driven by both
customer base growth of 5.0% and ARPU growth of 10.0%.
Data revenue grew by 29.3% in constant currency, driven by data
customer base growth of 17.4% and data ARPU growth of 12.3%. Data
usage per customer increased by 23.8% to 5.9 GB per month (from 4.8
GB in the prior period). Our continued 4G network rollout has
resulted in nearly 100% of all our sites delivering 4G services.
Furthermore, 233 5G sites are now operational. For the Q2'24
period, 4G customers accounted for 51.1% of our total data customer
base and contributed to 85.3% of total data usage. Q2'24 4G data
usage per customer reached 11.7 GB per month, an increase of 41.3%
(from 8.3 GB per customer per month in Q2'23).
Other revenues grew by 17.0% in constant currency, contributed
by growth in messaging and value-added services coupled with 25.7%
growth in leased line revenue.
EBITDA was $474m, up by 28.7% in constant currency. The EBITDA
margin increase to 54.0% from 51.2% was primarily due to the growth
in constant currency revenues, supported by continued cost
efficiencies. In Q2'24, EBITDA margins did benefit from a 15%
reduction in diesel prices compared to the prior period. The US
dollar component of operating costs within our Nigerian business is
minimal, and therefore it does not have a material impact on the
EBITDA margins following the Nigerian naira devaluation. New
legislation on VAT levied against tower company payments in Nigeria
was implemented on 1 September 2023, therefore only one month's
impact ($1.5m) was incorporated in the period.
Operating free cash flow was $365m, up by 66.4% in constant
currency, largely due to the strong EBITDA performance and lower
capex. The lower capex reflects timing, with no change to the capex
outlook.
East Africa - Mobile services (1)
Description Unit Half year ended Quarter ended
of
measure
---------------------- ---------- ---------------------------------------- ----------------------------------------
Sep-23 Sep-22 Reported Constant Sep-23 Sep-22 Reported Constant
currency currency currency currency
change change change change
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Summarised statement
of
operations
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Revenue $m 822 740 11.0% 20.6% 424 381 11.2% 21.4%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue
(2) $m 441 417 5.6% 14.6% 229 214 7.1% 16.4%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 309 257 20.3% 31.0% 158 134 17.8% 29.3%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Other revenue
(3) $m 72 66 8.7% 18.8% 37 33 11.1% 22.1%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
EBITDA $m 408 362 12.7% 21.6% 213 193 10.1% 19.4%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
(51) (83)
EBITDA margin % 49.7% 48.9% 79 bps 40 bps 50.2% 50.7% bps bps
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Depreciation
and amortisation $m (145) (123) 17.3% 27.2% (71) (63) 12.8% 23.0%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating exceptional
items $m - - 0.0% 0.0% - - 0.0% 0.0%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating profit $m 240 222 8.4% 16.6% 129 121 7.3% 16.3%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Capex $m 107 90 18.0% 18.0% 53 47 12.8% 12.8%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating free
cash flow $m 301 272 11.0% 23.0% 160 146 9.3% 21.7%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating KPIs
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Total customer
base million 68.1 61.4 11.0% 68.1 61.4 11.0%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data customer
base million 25.7 20.1 27.7% 25.7 20.1 27.7%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile services
ARPU $ 2.1 2.1 0.3% 9.0% 2.1 2.1 (0.0%) 9.1%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
(1) The East Africa business region includes Kenya, Malawi,
Rwanda, Tanzania, Uganda and Zambia.
(2) Voice revenue includes inter-segment revenue of $1m in the
half-year ended 30 September 2023. Excluding inter-segment revenue,
voice revenue was $440m in half-year ended 30 September 2023.
(3) Other revenue includes inter-segment revenue of $6m in the
half-year ended 30 September 2023 and $5m in the prior period.
Excluding inter-segment revenue, other revenue was $66m in
half-year ended 30 September 2023 and $61m in the prior period.
East Africa revenue grew by 11.0% in reported currency to $822m,
and by 20.6% in constant currency. The constant currency growth was
made up of voice revenue growth of 14.6%, data revenue growth of
31.0% and other revenue growth of 18.8%. The differential in growth
rates is primarily contributed by the average devaluation in Kenya
shilling (19.3%), Zambian kwacha (14.9%), Malawi kwacha (10.6%) and
Tanzania shilling (4.0%).
Voice revenue grew by 14.6% in constant currency, driven by both
customer base growth of 11.0% and voice ARPU growth of 3.6%. The
customer base growth was largely driven by expansion of both
increased network coverage and the increasing scale of the
distribution network. Voice usage per customer increased by 7.2% to
410 minutes per customer per month, driving voice ARPU up by
3.6%.
Data revenue grew by 31.0% in constant currency, largely driven
by data customer base growth of 27.7% and data ARPU growth of 3.4%.
Our continued investment in the network and expansion of 4G network
infrastructure helped us grow both the data customer base and usage
levels. 93.9% of our East Africa network sites are now on 4G,
compared with 87.7% in the prior period. Furthermore, we have 617
5G sites in Kenya, Tanzania, Uganda and Zambia. In Q2'24, 4G
customers accounted for 50.3% of our total data customer base and
contributed to 75.0% of total data usage. Q2'24 total data usage
per customer increased to 4.6 GB per customer per month, up by
7.0%, and 4G data usage per customer reached 6.7 GB per customer
per month.
EBITDA increased to $408m, up by 21.6% in constant currency. The
EBITDA margin improved to 49.7%, an improvement of 40 basis points
in constant currency. This improvement reflects continued operating
efficiencies, as well as regulatory developments in Kenya (amended
excise duty rates) and Rwanda (interconnect rate cuts).
Operating free cash flow was $301m, up by 23.0% in constant
currency, due largely to EBITDA growth, partially offset by
increased capex which increased due to phasing of deployment.
Francophone Africa - Mobile services (1)
Description Unit Half year ended Quarter ended
of
measure
---------------------- ---------- ---------------------------------------- ----------------------------------------
Sep-23 Sep-22 Reported Constant Sep-23 Sep-22 Reported Constant
currency currency currency currency
change change change change
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Summarised statement
of
operations
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Revenue $m 605 532 13.6% 10.9% 306 271 13.0% 9.0%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue
(2) $m 317 299 5.8% 3.3% 159 151 5.4% 1.5%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 221 176 25.7% 22.6% 114 90 26.1% 21.4%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Other revenue
(3) $m 67 57 16.6% 14.8% 33 30 12.1% 9.4%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
EBITDA $m 264 244 8.3% 5.7% 133 131 2.2% (1.6%)
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
(211) (217) (462) (469)
EBITDA margin % 43.7% 45.8% bps bps 43.6% 48.2% bps bps
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Depreciation
and amortisation $m (103) (92) 12.0% 9.5% (53) (46) 16.7% 12.4%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating exceptional
items $m - - 0.0% 0.0% - - 0.0% 0.0%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating profit $m 138 134 2.5% (0.1%) 68 75 (9.2%) (12.5%)
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Capex $m 77 59 30.9% 30.9% 46 32 44.6% 44.6%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating free
cash flow $m 187 185 1.2% (2.1%) 87 99 (11.6%) (15.6%)
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating KPIs
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Total customer
base million 30.9 26.9 14.7% 30.9 26.9 14.7%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data customer
base million 9.9 7.8 25.8% 9.9 7.8 25.8%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile services
ARPU $ 3.4 3.3 2.1% (0.3%) 3.4 3.4 (0.4%) (3.9%)
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
(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 $2m in the
half-year ended 30 September 2023 and $1m in the prior period.
Excluding inter-segment revenue, voice revenue was $315m in
half-year ended 30 September 2023 and $298m in the prior
period.
(3) Other revenue includes inter-segment revenue of $1m in the
half-year ended 30 September 2023 and in the prior period.
Excluding inter-segment revenue, other revenue was $66m in
half-year ended 30 September 2023 and $56m in the prior period.
Revenue grew by 13.6% in reported currency and by 10.9% in
constant currency. Higher reported currency growth as compared to
constant currency is due to the appreciation in the Central African
franc by 4.9% partially offset by a 8.8% depreciation in the
Madagascar ariary.
Voice revenue grew by 3.3% in constant currency, driven by
customer base growth of 14.7% partially offset by voice ARPU
decline of 7.1%. The customer base growth was driven by expansion
of both network coverage and distribution infrastructure.
Data revenue grew by 22.6% in constant currency, supported by
customer base growth of 25.8% and ARPU growth of 4.9%. ARPU is
largely driven by increased usage. Our continued 4G network rollout
resulted in an increase in total data usage of 53.0% and per
customer data usage increase of 30.9%. For Q2'24, 4G data users
constituted 57.3% of total data users, compared with 51.5% in the
prior period. 4G users contributed 71.9% of total data usage this
quarter. Q2'24 data usage per customer increased to 4.4 GB per
month (up from 3.5 GB in the prior period), while 4G data usage per
customer reached 5.9 GB per month, from 5.5 GB in the prior
period.
EBITDA at $264m, increased by 5.7% in constant currency. The
EBITDA margin declined to 43.7%, a decline of 217 basis points in
constant currency. EBITDA margin decline was mainly due to an
increase in fixed regulatory charges in DRC and a one-time opex
benefit of $19m in the prior period.
Operating free cash flow was $187m, lower by 2.1% in constant
currency, due to the increased EBITDA, more than offset by higher
capex, driven by timing differentials.
Mobile services
Description Unit Half year ended Quarter ended
of measure
------------------- ------------- ---------------------------------------- ----------------------------------------
Sep-23 Sep-22 Reported Constant Sep-23 Sep-22 Reported Constant
currency currency currency currency
change change change change
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Summarised
statement
of operations
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Revenue (1) $m 2,303 2,309 (0.2%) 18.3% 1,080 1,174 (8.0%) 17.5%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue $m 1,169 1,226 (4.6%) 11.5% 548 616 (11.1%) 11.2%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 915 864 5.9% 28.1% 429 446 (3.8%) 26.5%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Other revenue $m 219 219 0.2% 19.0% 103 112 (7.2%) 18.3%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
EBITDA $m 1,149 1,137 1.1% 20.0% 538 582 (7.5%) 18.0%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
EBITDA margin % 49.9% 49.3% 64 bps 72 bps 49.8% 49.6% 27 bps 21 bps
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Depreciation
and amortisation $m (404) (372) 8.7% 27.1% (190) (190) 0.3% 26.7%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating
exceptional
items $m - - 0.0% 0.0% - - 0.0% 0.0%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating profit $m 678 714 (5.0%) 13.9% 315 364 (13.3%) 11.9%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Capex $m 293 283 3.5% 3.5% 160 156 2.7% 2.7%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating free
cash flow $m 856 854 0.3% 27.8% 378 426 (11.2%) 25.8%
------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating KPIs
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile voice
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Customer base million 147.7 134.7 9.7% 147.7 134.7 9.7%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Voice ARPU $ 1.4 1.6 (12.5%) 2.3% 1.3 1.5 (18.9%) 1.5%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile data
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data customer
base million 59.8 48.6 23.0% 59.8 48.6 23.0%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data ARPU $ 2.7 3.0 (11.8%) 6.7% 2.4 3.1 (21.3%) 3.5%
------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
(1) Mobile service revenue after inter-segment eliminations was
$2,300m in half-year ended 30 September 2023 and $2,306m in the
prior period.
Overall revenue from mobile services declined by 0.2% in
reported currency, and in constant currency grew by 18.3%. The
constant currency growth was evident in all regions and key
services. Mobile services revenue grew in Nigeria by 21.7%, in East
Africa by 20.6% and in Francophone Africa by 10.9%,
respectively.
Voice revenue grew by 11.5% in constant currency, supported by
both customer base growth of 9.7% and voice ARPU growth of 2.3%.
Customer base growth was driven by the expansion of our network and
distribution infrastructure. The voice ARPU growth of 2.3% was
driven by an increase in voice usage per customer of 6.1%, reaching
285 minutes per customer per month, with total minutes on the
network increasing by 15.6%.
Data revenue grew by 28.1% in constant currency, driven by both
customer base growth of 23.0% and data ARPU growth of 6.7%. The
customer base growth was recorded across all the regions supported
by the expansion of our 4G network. 92.3% of our total sites are
now on 4G, compared with 88.9% in the prior period. 5G is
operational across five countries, with 850 sites deployed. In
Q2'24, 4G customers accounted for 51.8% of our total data customer
base (up from 45.2%), contributing to 79.6% of total data usage.
Q2'24 data usage per customer increased to 5.2 GB per customer per
month (from 4.5 GB in the prior period) while 4G data usage per
customer reached 8.4 GB per month (from 7.3 GB in the prior
period). In the half year, data revenue contributed to 39.7% of
total mobile services revenue, up from 37.4% in the prior
period.
EBITDA was $1,149m, growing by 20.0% in constant currency. The
EBITDA margin improved by 64 basis points to 49.9% (improvement of
72 basis points in constant currency).
Operating free cash flow was $856m, up by 27.8% in constant
currency, due to the strong EBITDA performance partially offset by
higher capex.
Mobile money
Description Unit Half year ended Quarter ended
of measure
------------------- ------------- ---------------------------------------- ----------------------------------------
Sep-23 Sep-22 Reported Constant Sep-23 Sep-22 Reported Constant
currency currency currency currency
change change change change
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Summarised
statement of
operations
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Revenue (1) $m 416 332 25.3% 30.9% 215 173 24.5% 30.5%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Nigeria $m 1 0 - - 0 0 - -
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
East Africa $m 319 253 26.3% 34.9% 165 132 24.8% 34.5%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Francophone
Africa $m 96 79 21.1% 18.7% 50 41 22.5% 18.4%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
EBITDA $m 214 165 30.0% 35.4% 111 84 32.2% 38.1%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
183 173 301 282
EBITDA margin % 51.4% 49.6% bps bps 51.6% 48.6% bps bps
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Depreciation
and amortisation $m (9) (8) 18.3% 29.0% (5) (4) 9.1% 26.1%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating profit $m 198 153 29.7% 34.9% 103 78 33.2% 38.5%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Capex $m 10 20 (49.6%) (49.6%) 7 11 (38.5%) (38.5%)
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating free
cash flow $m 204 145 40.9% 48.5% 104 73 42.9% 50.6%
------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating KPIs
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
customer base million 36.5 29.7 23.1% 36.5 29.7 23.1%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Transaction
value $bn 55.7 40.1 38.8% 45.3% 28.9 21.2 36.1% 43.5%
------------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
ARPU $ 2.0 2.0 1.8% 6.3% 2.0 2.0 0.3% 5.3%
------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
(1) Mobile money service revenue post inter-segment eliminations
with mobile services was $323m in the half-year ended 30 September
2023 and $259m in the prior year.
Mobile money revenue grew by 25.3% in reported currency, with
constant currency growth of 30.9%. The differential in growth rates
is primarily as the result of an average devaluation in Zambian
kwacha (14.9%) and Malawi kwacha (10.6%), partially offset by
appreciation in Central African franc (4.9%). The constant currency
mobile money revenue growth was driven by revenue growth in both
East Africa and Francophone Africa, of 34.9% and 18.7%,
respectively. In Nigeria, the company remains focussed on customer
acquisition through the quarter with 1.9 million of active
customers currently registered for mobile money services in Nigeria
versus 1.5 million in quarter ended June 2023. Annualised
transaction value for Nigeria SmartCash grew by 36% in current
quarter as compared to quarter ended June 2023. Additionally, we
added over 47,000 agents during the quarter and reached almost
115,000 agents as of 30 September 2023.
The constant currency revenue growth of 30.9% was driven by both
customer base growth of 23.1% and mobile money ARPU growth of 6.3%.
The expansion of our distribution network, particularly our
exclusive channels of Airtel Money branches and kiosks, supported
customer base growth of 23.1%. The mobile money ARPU growth of 6.3%
was driven by an increase in the transaction value per customer of
18.0% to $271 per customer per month.
Q2'24 annualised transaction value amounted to $116bn in
reported currency, with mobile money revenue contributing 15.9% of
total Group revenue in the half year.
EBITDA was $214m, up by 35.4% in constant currency. The EBITDA
margin reached 51.4%, an improvement of 173 basis points in
constant currency and 183 basis points in reported currency.
Regional performance
Nigeria
Description Unit Half year ended Quarter ended
of measure
---------------- ------------- ---------------------------------------- ----------------------------------------
Sep-23 Sep-22 Reported Constant Sep-23 Sep-22 Reported Constant
currency currency currency currency
change change change change
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Revenue $m 879 1,040 (15.5%) 21.8% 350 523 (33.1%) 20.5%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue $m 414 512 (19.0%) 16.1% 161 253 (36.4%) 14.4%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 385 431 (10.7%) 29.3% 157 221 (29.1%) 27.6%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
revenue $m 1 0 - - 0 0 - -
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Other revenue $m 79 97 (19.1%) 17.0% 32 49 (34.1%) 18.6%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
EBITDA $m 470 529 (11.2%) 28.3% 189 257 (26.4%) 32.4%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
259 275 489 487
EBITDA margin % 53.5% 50.9% bps bps 54.0% 49.1% bps bps
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating
KPIs
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
ARPU $ 3.0 3.8 (20.0%) 15.4% 2.4 3.8 (36.3%) 14.6%
---------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
East Africa
Description Unit Half year ended Quarter ended
of measure
---------------- ------------- ---------------------------------------- ----------------------------------------
Sep-23 Sep-22 Reported Constant Sep-23 Sep-22 Reported Constant
currency currency currency currency
change change change change
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Revenue $m 1,075 942 14.2% 23.6% 556 487 14.2% 24.2%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue $m 441 417 5.6% 14.6% 229 213 7.1% 16.4%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 309 257 20.3% 31.0% 158 134 17.8% 29.2%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
revenue $m 320 253 26.3% 34.9% 165 132 24.8% 34.5%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Other revenue $m 69 64 8.1% 18.5% 36 32 10.7% 21.9%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
EBITDA $m 580 494 17.5% 26.3% 301 261 15.2% 24.8%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
151 114
EBITDA margin % 53.9% 52.4% bps bps 54.2% 53.7% 48 bps 22 bps
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating
KPIs
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
ARPU $ 2.7 2.7 3.2% 11.7% 2.8 2.7 2.6% 11.7%
---------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Francophone Africa
Description Unit Half year ended Quarter ended
of measure
---------------- ------------- ---------------------------------------- ----------------------------------------
Sep-23 Sep-22 Reported Constant Sep-23 Sep-22 Reported Constant
currency currency currency currency
change change change change
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Revenue $m 670 587 14.0% 11.5% 340 299 13.5% 9.5%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue $m 317 299 5.8% 3.3% 159 151 5.3% 1.4%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 221 176 25.7% 22.6% 114 90 26.3% 21.6%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
revenue $m 96 79 21.1% 18.7% 50 41 22.5% 18.4%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Other revenue $m 66 57 16.6% 14.8% 33 29 12.1% 9.4%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
EBITDA $m 316 285 11.0% 8.4% 161 151 6.6% 2.8%
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
(126) (131) (309) (311)
EBITDA margin % 47.2% 48.5% bps bps 47.3% 50.4% bps bps
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating
KPIs
---------------- ------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
ARPU $ 3.7 3.7 2.5% 0.2% 3.7 3.7 0.1% (3.5%)
---------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Consolidated performance
Description UoM Half year ended- September Half year ended- September
2023 2022
-------------- ----- ------------------------------------------------------- -------------------------------------------------------
Mobile Mobile Unallocated Eliminations Total Mobile Mobile Unallocated Eliminations Total
services money services money
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Revenue $m 2,303 416 (0) (96) 2,623 2,309 332 (0) (76) 2,565
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Voice
revenue $m 1,169 (0) (0) 1,169 1,226 (0) (0) 1,226
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Data revenue $m 915 - (0) 915 864 - (0) 864
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Other
revenue $m 219 - (3) 216 219 - (3) 216
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
EBITDA $m 1,149 214 (62) 1 1,302 1,137 165 (47) (0) 1,255
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
EBITDA
margin % 49.9% 51.4% 49.6% 49.3% 49.6% 48.9%
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Depreciation
and
amortisation $m (404) (9) (4) - (417) (372) (8) (3) - (383)
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Operating $m - - - - - - - - -
exceptional
items
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Operating
profit $m 678 198 8 1 885 714 153 5 (0) 872
-------------- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
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
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. An inability to invest and upgrade our network and IT
infrastructure could negatively impact the resiliency of our
network and affect our ability to compete effectively in the
market.
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 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. In recent months, there has been increasing
tension in the global geo-political environment, including in some
of the regions where we operate. 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
include the impact of the devaluation from the recent changes to
the operations in the Nigerian Foreign Exchange (FX) market.
The expected annualised translation impact of the devaluation in
Nigeria incurred in June 2023 is expected to be between $900m and
$950m on annualised revenues, and between $450m and $500m on
annualised EBITDA. With respect to currency devaluation
sensitivity, on a 12-month basis, a further 1% USD appreciation
across all currencies in our OpCos would have a negative impact of
$49m on revenues, $24m on EBITDA and $19m on finance costs
(excluding derivatives). Our largest exposure is to the Nigerian
naira, for which a further 1% USD appreciation would have a
negative impact of $14m on revenues, $8m on EBITDA and $7m on
finance costs (excluding derivatives). This sensitivity analysis
assumes the USD appreciation occurs at the beginning of the
period.
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 2022/23.
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.
Interim Condensed Consolidated Financial Statements
Consolidated Statement of Comprehensive Income
(All amounts are in US Dollar millions unless stated
otherwise)
For the six months
ended
------------------------
30 30
September September
Notes 2023 2022
------------ ----------
Income
Revenue 5 2,623 2,565
Other income 16 6
2,639 2,571
Expenses
Network operating expenses 491 489
Access charges 179 207
License fee and spectrum usage charges 124 114
Employee benefits expense 152 137
Sales and marketing expenses 127 118
Impairment loss on financial assets 4 6
Other operating expenses 260 245
Depreciation and amortisation 417 383
1,754 1,699
Operating profit 885 872
Finance costs
- Net loss on foreign exchange and derivative financial instruments 654 184
- Other finance costs 236 185
Finance income (17) (11)
Share of profit of associate and joint venture accounted for using equity method (0) (2)
Profit before tax 12 516
Income tax expense 6 25 186
(Loss)/Profit for the period (13) 330
Profit before tax (as presented above) 12 516
Add/(Less): Exceptional items 7 471 -
Underlying profit before tax 483 516
--------------------------------------------------------------------------------------- ------ ------------ ----------
(Loss)/Profit after tax (as presented above) (13) 330
Add/(Less): Exceptional items 7 317 (42)
Underlying profit after tax 304 288
--------------------------------------------------------------------------------------- ------ ------------ ----------
For the six months
ended
------------------------
30 30
September September
Notes 2023 2022
------------ ----------
(Loss)/Profit for the period (continued from previous page) (13) 330
Other comprehensive income ('OCI')
Items to be reclassified subsequently to profit or loss:
Loss due to foreign currency translation differences (628) (244)
Tax on above (45) (4)
Share of OCI of associate and joint venture accounted for using equity method (0) (1)
(673) (249)
------------ ----------
Items not to be reclassified subsequently to profit or loss:
Re-measurement loss on defined benefit plans (0) (1)
Tax on above 0 0
(0) (1)
------------ ----------
Other comprehensive loss for the period (673) (250)
------------ ----------
Total comprehensive (loss)/income for the period (686) 80
============ ==========
(Loss)/Profit for the period attributable to: (13) 330
Owners of the company (55) 296
Non-controlling interests 42 34
Other comprehensive loss for the period attributable to: (673) (250)
Owners of the company (659) (239)
Non-controlling interests (14) (11)
Total comprehensive (loss)/income for the period attributable to: (686) 80
Owners of the company (714) 57
Non-controlling interests 28 23
(Loss)/Earnings per share
Basic 8 (1.5 cents) 7.9 cents
Diluted 8 (1.5 cents) 7.9 cents
Consolidated Statement of Financial Position
(All amounts are in US Dollar millions unless stated otherwise)
As of
----------------------------------
Notes 30 September 2023 31 March 2023
------------------ --------------
Assets
Non-current assets
Property, plant and equipment 9 1,935 2,295
Capital work-in-progress 9 193 212
Right of use assets 1,266 1,497
Goodwill 10 2,989 3,516
Other intangible assets 903 813
Intangible assets under development 4 399
Investments accounted for using equity method 5 4
Financial assets
- Investments 0 0
- Derivative instruments 0 9
- Others 45 34
Income tax assets (net) 1 1
Deferred tax assets (net) 427 337
Other non-current assets 139 151
------------------ --------------
7,907 9,268
Current assets
Inventories 21 15
Financial assets
- Investments 1 -
- Derivative instruments 19 4
- Trade receivables 161 145
- Cash and cash equivalents 429 586
- Other bank balances 363 131
- Balance held under mobile money trust 720 616
- Others 127 142
Other current assets 250 259
2,091 1,898
Total assets 9,998 11,166
================== ==============
Notes As of
-----------------------------------------------------
30 September 2023 31 March 2023
------------------ ---------------------------------
Current liabilities
Financial liabilities
- Borrowings 13 1,371 945
- Lease liabilities 355 395
- Derivative instruments 27 5
- Trade payables 399 460
- Mobile money wallet balance 703 582
- Others 363 533
Provisions 59 83
Deferred revenue 147 183
Current tax liabilities (net) 119 194
Other current liabilities 183 192
3,726 3,572
Net current liabilities (1,635) (1,674)
Non-current liabilities
Financial liabilities
- Borrowings 13 933 1,233
- Lease liabilities 1,450 1,652
- Put option liability 562 569
- Derivative instruments 91 43
- Others 155 147
Provisions 22 21
Deferred tax liabilities (net) 70 108
Other non-current liabilities 11 13
------------------ ---------------------------------
3,294 3,786
Total liabilities 7,020 7,358
================== =================================
Net Assets 2,978 3,808
================== =================================
Equity
Share capital 12 1,879 3,420
Reserves and surplus 930 215
Equity attributable to owners of the company 2,809 3,635
Non-controlling interests ('NCI') 169 173
------------------ ---------------------------------
Total equity 2,978 3,808
================== =================================
The accompanying notes
form an integral part
of these interim
condensed consolidated
financial
statements.
For and on behalf of
the board of Airtel
Africa plc
Olusegun Ogunsanya
Chief Executive Officer
29 October 2023
Consolidated Statement of Changes in Equity
(All amounts are in US Dollar millions unless stated otherwise)
Equity attributable to owners of the company
Share Capital Retained Transactions Other Equity Non-controlling Total
earnings with NCI components attributable interests (NCI) equity
reserve of equity to owners of
the company
------------- ---------------- -------
No. of shares Amount
(1) Total
---------------- ------------- ---------------- -------
As of 1 April 2022 6,839,896,081 3,420 3,436 (942) (2,412) 82 3,502 147 3,649
Profit for the
period - - 296 - - 296 296 34 330
Other comprehensive
loss - - (1) - (238) (239) (239) (11) (250)
---------------- --------- ------------- ----------- ------ ------------- ----------------
Total comprehensive
income/(loss) - - 295 - (238) 57 57 23 80
Transaction with
owners of equity
Employee
share-based
payment reserve - - (0) - 4 4 4 - 4
Purchase of own
shares - - - - (11) (11) (11) - (11)
Transactions with
NCI - - - 5 - 5 5 3 8
Dividend to owners
of the company - - (113) - - (113) (113) - (113)
Dividend (including
tax) to NCI - - - - - - - (25) (25)
-------- ---------
As of 30 September
2022 6,839,896,081 3,420 3,618 (937) (2,657) 24 3,444 148 3,592
================ ======== ========= ============= =========== ====== ============= ================ =======
Profit for the
period - - 367 - - 367 367 53 420
Other
comprehensive
income/ (loss) - - 1 - (103) (102) (102) (1) (103)
---------------- --------- -----------
Total
comprehensive
income /(loss) - - 368 - (103) 265 265 52 317
Transaction with
owners of equity
Employee
share-based
payment reserve - - (2) - 2 - - - -
Transactions with
NCI - - - 8 - 8 8 - 8
Dividend to owners
of the company - - (82) - - (82) (82) - (82)
Dividend
(including tax)
to NCI - - - - - - - (27) (27)
---------------- -------- --------- ------------- ----------- ------------- ---------------- -------
As of 31 March
2023 6,839,896,081 3,420 3,902 (929) (2,758) 215 3,635 173 3,808
================ ======== ========= ============= =========== ====== ============= ================ =======
(Loss)/Profit for
the period - - (55) - - (55) (55) 42 (13)
Other
comprehensive
loss - - (0) - (659) (659) (659) (14) (673)
---------------- -------- --------- ------------- ----------- ------ ------------- ---------------- -------
Total
comprehensive
income/(loss) - - (55) - (659) (714) (714) 28 (686)
Transaction with
owners of equity
Purchase of own
shares (net) - - - - (1) (1) (1) - (1)
Employee
share-based
payment reserve - - (0) - 2 2 2 - 2
Cancellation of
deferred shares
(refer note 4(c)) (3,081,744,577) (1,541) 1,541 - - 1,541 - - -
Transactions with
NCI (2) - - - 10 - 10 10 2 12
Dividend to owners
of the company - - (123) - - (123) (123) - (123)
Dividend
(including tax)
to NCI - - - - - - - (34) (34)
---------------- -------- --------- ------------- ----------- ------ ------------- ---------------- -------
As of 30 September
2023 3,758,151,504 1,879 5,265 (919) (3,416) 930 2,809 169 2,978
================ ======== ========= ============= =========== ====== ============= ================ =======
(1) Includes ordinary & deferred shares till 31 March 2023.
Deferred shares have been cancelled during the six months ended 30
September 2023 as explained in note 4(c), therefore as on 30
September 2023, it includes only ordinary shares. Refer to note 12
for further details.
(2) Transactions with NCI reserve increased due to reversal of
put option liability by $10m for dividend distribution to put
option NCI holders. Any dividend paid to the put option NCI holders
is adjustable against the put option liability based on the put
option arrangement.
Consolidated Statement of Statement Flows
(All amounts are in US Dollar millions unless stated otherwise) For the six months ended
--------------------------------------
30 September 2023 30 September 2022
------------------ ------------------
Cash flows from operating activities
Profit before tax 12 516
Adjustments for -
Depreciation and amortization 417 383
Finance income (17) (11)
Finance costs
- Net loss on foreign exchange and derivative financial instruments 654 184
- Other finance costs 236 185
Loss on sale of property, plant and equipment, net 0 -
Share of profit of associate and joint venture accounted for using
equity method (0) (2)
Other non-cash adjustments (1) (1) 5
------------------ ------------------
Operating cash flow before changes in working capital 1,301 1,260
Changes in working capital
Increase in trade receivables (38) (28)
Increase in inventories (7) (3)
Increase /(Decrease) in trade payables 8 (15)
Increase in mobile money wallet balance 139 71
Decrease in provisions (18) (22)
Increase in deferred revenue 10 16
Increase in other financial and non financial liabilities 24 36
Increase in other financial and non financial assets (71) (16)
------------------ ------------------
Net cash generated from operations before tax 1,348 1,299
Income taxes paid (227) (288)
Net cash generated from operating activities (a) 1,121 1,011
------------------ ------------------
Cash flows from investing activities
Purchase of property, plant and equipment and capital work-in-progress (387) (393)
Purchase of intangible assets and intangible assets under development (137) (88)
Maturity of deposits with bank 340 343
Investment in deposits with bank (581) (7)
Dividend received from associate - 2
Purchase of other short term investment (1) -
Interest received 15 11
------------------ ------------------
Net cash used in investing activities (b) (751) (132)
------------------ ------------------
Cash flows from financing activities
Acquisition of non-controlling interests - 0
Purchase of own shares by ESOP trust (2) (9)
Proceeds from exercise of ESOP shares 0 -
Proceeds from borrowings 384 563
Repayment of borrowings (249) (789)
Repayment of lease liabilities (165) (142)
Dividend paid to non-controlling interests (43) (43)
Dividend paid to owners of the company (123) (113)
Payment of deferred spectrum liability (3) (2)
Interest on borrowings, lease liabilities and other liabilities (211) (181)
Outflow on maturity of derivatives (net) (0) (28)
------------------ ------------------
Net cash used in financing activities (c) (412) (744)
------------------ ------------------
(Decrease)/Increase in cash and cash equivalents during the period (a+b+c) (42) 135
Currency translation differences relating to cash and cash equivalents (64) (19)
Cash and cash equivalent as at beginning of the period 841 847
------------------ ------------------
Cash and cash equivalents as at end of the period (Note 11) (2) 735 963
------------------ ------------------
(1) For the six months ended 30 September 2023 and 30 September
2022, this mainly includes movements in impairment of trade
receivable and other provisions.
(2) Includes balances held under mobile money trust of $720m
(September 2022: $596m) on behalf of mobile money customers which
are not available for use by the Group.
Notes to Consolidated Financial Statements
(All amounts are in US Dollar millions unless stated
otherwise)
1. Corporate information
Airtel Africa plc ('the company') is a public company limited by
shares incorporated and domiciled in the United Kingdom (UK) under
the Companies Act 2006 and is registered in England and Wales
(registration number 11462215). The registered address of the
company is First Floor, 53/54 Grosvenor Street, London, W1K 3HU,
United Kingdom. The company is listed both on the London Stock
Exchange (LSE) and Nigerian Stock Exchange (NGX). The company is a
subsidiary of Airtel Africa Mauritius Limited ('the parent'), a
company registered in Mauritius. The registered address of the
parent is c/o IQ EQ Corporate Services (Mauritius) Ltd., 33, Edith
Cavell Street, Port Louis, 11324, Mauritius.
The company, together with its subsidiary undertakings
(hereinafter referred to as 'the Group') has operations in Africa.
The principal activities of the Group, its associate and its joint
venture consist of the provision of telecommunications and mobile
money services.
2. Basis of preparation
These interim financial statements have been prepared in
accordance with IAS 34 'Interim Financial Reporting' as issued by
the International Accounting Standards Board (IASB) and approved
for use in the UK by the UK Accounting Standards Endorsement Board
(UKEB). Accordingly, the interim financial statements do not
include all the information required for a complete set of
financial statements, and should be read in conjunction with the
Group's annual consolidated financial statements for the year ended
31 March 2023. Further, selected explanatory notes have been
included to explain events and transactions that are significant
for the understanding of the changes in the Group's financial
position and performance since the latest annual consolidated
financial statements.
These interim consolidated financial statements for the six
months ended 30 September 2023 do not constitute statutory accounts
as defined in section 434 of the UK Companies Act 2006 and are
unaudited.
The information relating to the year ended 31 March 2023 is an
extract from the Group's published annual report for that year and
does not constitute statutory accounts as defined in section 434 of
the UK Companies Act 2006. A copy of the statutory accounts for
that year has been delivered to the Registrar of Companies. The
auditors reported on those accounts: the report was (i)
unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement
under section 498(2) or (3) of the UK Companies Act 2006.
These interim consolidated financial statements apply the same
accounting policies, presentation and methods of calculation as
those followed in the preparation of the Group's annual
consolidated financial statements for the year ended 31 March 2023.
Further, there have been no changes in critical accounting
estimates, assumptions and judgements.
On 25 May 2023, the amendments to IAS 12 'Income Taxes' were
released by IASB. These amendments relate to International Tax
Reform "Pillar 2 income taxes" and clarify how the effects of the
global minimum tax framework should be accounted for and disclosed.
The amendments also provide a temporary mandatory exception from
deferred tax accounting for the top-up tax, which would have been
effective immediately if this exception was not provided. The Group
using this exception has therefore not recognized or disclosed tax
assets and liabilities relating to Pillar 2 income taxes. These
amendments were endorsed by the UK Endorsement Board on 19 July
2023 and the Group is assessing the expected impact of these
amendments which will be disclosed in the Group's March 2024 annual
report. On 23 March 2023, HM Treasury released draft legislation
for the Global Minimum Tax rules in the UK which was substantively
enacted on 20 June 2023, this legislation will apply to the Group
w.e.f. 1 April 2024.
These interim consolidated financial statements of the Group for
the six months ended 30 September 2023 were authorised by the Board
of Directors on 29 October 2023.
3. Basis of measurement
The Interim consolidated financial statements have been prepared
on the historical cost basis except for financial instruments held
at fair value and are presented in United States Dollars (USD),
with all values stated in US$ million and rounded to the nearest
million except when otherwise indicated. Further, amounts which are
less than half a million are appearing as '0'.
3.1. Going concern
These Interim consolidated financial statements have been
prepared on a going concern basis. In making this going concern
assessment, the Group has considered cash flow projections
(including scheduled bond repayment of $550m in May 2024) to
December 2024 (going concern assessment period) under both base and
reasonable worst-case scenarios taking into considerations its
principal risks and uncertainties including a reduction in revenue
and EBITDA and a devaluation of the various currencies in the
countries in which the Group operates. As part of this evaluation,
the Group has considered available ways to mitigate these risks and
uncertainties and has also considered committed undrawn facilities
of $271m expiring beyond the going concern assessment period, which
will fulfill the Group's cash flow requirement under both the base
and reasonable worst-case scenarios.
Having considered all the factors above impacting the Group's
businesses, the impact of downside sensitivities, and the
mitigating actions available including a reduction and deferral of
capital expenditure, the directors are satisfied that the Group has
adequate resources to continue its operational existence for the
foreseeable future. Accordingly, the directors continue to adopt
the going concern basis of accounting in preparing the interim
consolidated financial statements.
4. Significant transactions/new developments
a) The directors recommended on 10 May 2023 and shareholders
approved on 4 July 2023, a final dividend of 3.27 cents per
ordinary shares for the year ended 31 March 2023, which was paid on
26 July 2023 to the holders of ordinary shares on the register of
members at the close of business on 23 June 2023.
b) In June 2023, the Central Bank of Nigeria (CBN) announced
changes to the operations in the Nigerian Foreign Exchange Market,
including the abolishment of segmentation, with all segments now
collapsing into the Investors and Exporters (I&E) window and
the reintroduction of the 'Willing Buyer, Willing Seller' model at
the I&E window. As a result of this CBN decision, the Nigerian
Naira devalued against US Dollar by approximately 62% (i.e. US
Dollar appreciated against Nigerian Naira by approximately 38%) in
the month of June 2023. Nigeria Naira was at NGN 752 per USD at the
end of the month of June 2023.
In the month of June 2023, the devaluation of the Naira against
the US Dollar resulted in a foreign exchange loss of $383m on the
translation of US Dollar monetary items held by the Group's
Nigerian subsidiaries (where the functional currency is the
Nigerian Naira) at the new exchange rate referenced above and a
loss on derivative financial instruments of $88m primarily on
account of fair value changes considering the foreign exchange
movement referenced above.
This change announced by CBN led to a material impact on the
Group's financial statements and in line with the Group's policy on
exceptional items and alternative performance measures, the impact
of this change is of such size, nature and incidence that its
exclusion is considered necessary to explain the underlying
performance of the Group and to improve the comparability between
periods. Therefore, the group has presented the net loss on foreign
exchange and derivative financial instruments arising specifically
from this devaluation of the Naira in the month of June 2023 and
which amounts to $471m (out of total loss on foreign exchange and
derivative financial instruments in Group's Nigerian subsidiaries
for the six months ended 30 September 2023 amounting to $552m),
alongside the corresponding tax impact of $154m as exceptional
items.
Additionally, on account of translation from Naira to US Dollar
(presentation currency of the Group) of all the assets and
liabilities (including Goodwill) pertaining to the Group's Nigerian
subsidiaries using the closing exchange rate at 30 June 2023 and
income and expenses at the average exchange rates for June 2023,
the Group incurred a foreign exchange translation loss recorded in
other comprehensive income amounting to $577m in the month of June
2023.
c) During the six months ended 30 September 2023, the company
completed the cancellation and extinction of all of its deferred
shares (3,081,744,577 shares) of USD $0.50 nominal value each (the
"Capital Reduction"), which was approved by shareholders at the
annual general meeting of the company held on 4 July 2023, and was
sanctioned by the High Court of England and Wales (the "High
Court") on 15 August 2023 and became effective on 18 August 2023 on
its certification by the Companies House. The effect of the Capital
Reduction is to create additional distributable reserves of $1541m
which will be available to the company going forward and may be
used to facilitate returns to shareholders in the future, whether
in the form of dividends, distributions, or purchases of the
company's own shares. Accordingly, and in line with the High Court
approval, the carrying value of the deferred shares ($1,541m) has
been transferred to retained earnings.
5. Segmental information
The Group's segment information is provided on the basis of
geographical clusters and products to the Group's Chief Executive
Officer (chief operating decision maker - 'CODM') for the purposes
of resource allocation and assessment of performance.
The Group's reporting segments are as follows:
Nigeria mobile services - Comprising of mobile service
operations in Nigeria;
East Africa mobile services - Comprising of mobile service
operations in Uganda, Zambia, Tanzania, Kenya, Malawi and
Rwanda;
Francophone Africa mobile services - Comprising of mobile
service operations in DRC, Gabon, Niger, Chad, Congo B, Madagascar
and Seychelles;
Mobile money*- Comprising of mobile money services across the
Group.
*Mobile money services segment consolidates the results of
mobile money operations from all operating entities within the
Group. Airtel Money Commerce B.V. (AMC BV) is the holding company
for all mobile money services for the Group, and as of 30 September
2023, it controls all mobile money operations excluding operations
in Nigeria. It is management's intention to continue work to
transfer the Nigerian mobile money services operations into AMC BV,
subject to local regulatory approvals.
Each segment derives revenue from the respective services housed
within each segment, as described above. Expenses, assets and
liabilities primarily related to the corporate headquarters and
centralised functions of the Group are presented as unallocated
items.
The amounts reported to CODM are based on the accounting
principles used in the preparation of the financial statements.
Each segment's performance is evaluated based on segment revenue
and segment result.
The segment result is Underlying EBITDA (i.e. earnings before
interest, tax, depreciation and amortization before exceptional
items). This is the measure reported to the CODM for the purpose of
resource allocation and assessment of segment performance. During
the six months ended 30 September 2023 and 30 September 2022,
EBITDA is equal to underlying EBITDA since there are no exceptional
items pertaining to EBITDA.
Inter-segment pricing and terms are reviewed and changed by
management to reflect changes in market conditions and changes to
such terms are reflected in the period in which the changes
occur.
The 'Eliminations' column comprises inter-segment revenues
eliminated upon consolidation.
Segment assets and segment liabilities comprise those assets and
liabilities directly managed by each segment. Segment assets
primarily include receivables, property, plant and equipment,
capital work in progress, right-to-use assets, intangibles assets,
inventories and cash and cash equivalents. Segment liabilities
primarily include operating liabilities. Segment capital
expenditure comprises investment in property, plant and equipment,
capital work in progress, intangible assets (excluding licenses)
and capital advances.
Investment elimination upon consolidation and resulting goodwill
impacts are reflected in the 'Elimination' column.
Summary of the segmental information and disaggregation of
revenue for the six months ended and as of 30 September 2023 is as
follows:
East Francophone Mobile Others Eliminations
Nigeria Africa Africa money (unallocated)
mobile mobile mobile
services services services Total
------------ ----------- ------------ ------------ -------------- ------------- ------
Revenue from external
customers
Voice revenue 414 440 315 - - - 1,169
Data revenue 385 309 221 - - - 915
Mobile money
revenue (1) - - - 323 - - 323
Other revenue (2) 78 66 66 - 6 - 216
Total revenue from
external customers 877 815 602 323 6 - 2,623
Inter-segment revenue 1 7 3 93 5 (109) -
Total revenue 878 822 605 416 11 (109) 2,623
EBITDA 474 408 264 214 (58) - 1,302
Less:
Depreciation and
amortisation 156 145 103 9 4 - 417
Finance costs
- Net loss on
foreign exchange
and derivative
financial
instruments 654
- Other finance
costs 236
Finance income (17)
Share of profit of
associate and joint
venture accounted
for using equity
method (0)
Profit before tax 12
Other segment items
Capital expenditure 109 107 77 10 9 - 312
---------------------- ------------ ----------- ------------ ------------ -------------- ------------- ------
As of 30 September
2023
Segment assets 1,786 2,229 1,605 1,063 25,385 (22,070) 9,998
Segment liabilities 1,683 2,397 2,342 840 13,158 (13,400) 7,020
Investment in
associate and joint
venture accounted
for using equity
method (included in
segment
assets above) - - 5 - - - 5
(1) Mobile money revenue is net of inter-segment elimination of
$93m mainly for commission on sale of airtime. It includes $63m
pertaining to East Africa mobile services and the balance $30m
pertaining to Francophone Africa mobile service.
(2) This includes messaging, value added services, enterprise,
site sharing and handset sale revenue.
Summary of the segmental information and disaggregation of
revenue for the six months ended 30 September 2022 and as of 31
March 2023 is as follows:
Francophone Mobile Others Eliminations
Nigeria East Africa Africa money (unallocated)
mobile mobile mobile
services services services Total
------------ ------------ ------------ ------------ -------------- ------------- -------
Revenue from external
customers
Voice revenue 511 417 298 - - - 1,226
Data revenue 431 257 176 - - - 864
Mobile money
revenue (1) - - - 259 - - 259
Other revenue (2) 96 61 56 - 3 - 216
Total revenue from
external customers 1,038 735 530 259 3 - 2,565
Inter-segment revenue 2 6 2 73 - (83) -
Total revenue 1,040 741 532 332 3 (83) 2,565
EBITDA 533 362 244 165 (49) - 1,255
Less:
Depreciation and
amortisation 156 123 92 8 4 - 383
Finance costs
- Net loss on
foreign exchange
and derivative
financial
instruments 184
- Other finance
costs 185
Finance income (11)
Share of profit of
associate and joint
venture accounted
for using equity
method (2)
Profit before tax 516
Other segment items
Capital expenditure 134 90 59 20 7 - 310
---------------------- ------------ ------------ ------------ ------------ -------------- ------------- -------
As of 31 March 2023
Segment assets 2,634 2,255 1,599 945 25,485 (21,752) 11,166
Segment liabilities 2,193 2,393 2,359 742 12,839 (13,168) 7,358
Investment in
associate and joint
venture accounted
for using equity
method (included in
segment
assets above) - - 4 - - - 4
(1) Mobile money revenue is net of inter-segment elimination of
$73m mainly for commission on sale of airtime. It includes $49m
pertaining to East Africa mobile services and balance $24m
pertaining to Francophone Africa mobile services.
(2) This includes messaging, value added services, enterprise,
site sharing and handset sale revenue.
6. Income tax expense
For the six months ended
--------------------------------------
30 September 2023 30 September 2022
------------------ ------------------
Current tax 197 235
Deferred tax (172) (49)
------------------ ------------------
Income tax expense 25 186
------------------ ------------------
The tax charge for the six months ended 30 September 2023 has
been calculated for each operating country by applying the best
estimate of the effective rate of tax expected to apply for the
period ending 31 March 2024 on the pre-tax profits of the six
months period using rates substantively enacted by 30 September
2023. The charge is adjusted for discrete items (if any) occurring
in the interim period as required by IAS 34 'Interim Financial
Reporting'.
Tax charge for the six months ended 30 September 2023 also
includes the related tax impacts arising out of withholding tax
('WHT') on unremitted earnings and cross charge to Group entities
and deferred tax asset recognition based on the projected
profitability in operating countries, wherever applicable.
7. Exceptional items
Underlying profit before tax excludes the following exceptional
items
For the six months ended
------------------------- ------------------
30 September 2023 30 September 2022
------------------------- ------------------
Profit before tax 12 516
Add: Exceptional items
Finance costs
- Net exchange loss and loss on derivative financial instruments (1) 471 -
471 -
------------------------- ------------------
Underlying profit before tax 483 516
------------------------- ------------------
Underlying profit after tax excludes the following exceptional
items:
For the six months ended
--------------------------------------
30 September 2023 30 September 2022
------------------ ------------------
(Loss)/Profit after tax (13) 330
-Exceptional items (as above) 471 -
- Tax on above exceptional items (1) (154) -
- Deferred tax asset recognition (2) - (42)
317 (42)
------------------ ------------------
Underlying profit after tax 304 288
------------------ ------------------
(1) This pertains to impact of material currency devaluation in
Nigeria, refer to note 4(b) for details.
(2) During the six months ended 30 September 2022, the Group had
recognised deferred tax assets in Airtel Kenya. Airtel Kenya had
carried forward losses and temporary differences on which deferred
tax was not previously recognised. Considering Airtel Kenya's
profitability trends, that tax losses were utilised and on the
basis of forecast future taxable profits, the Group had determined
that it was probable that taxable profits would be available
against which the tax losses and temporary differences could be
utilised. Consequently, the deferred tax asset recognition criteria
were met, leading to the recognition of an additional deferred tax
asset of $42m during the six months ended 30 September 2022.
Profit attributable to non-controlling interests include benefit
of $0m and nil during the six months ended 30 September 2023 and 30
September 2022 respectively, relating to the above exceptional
items.
8. Earnings per share ('EPS')
The details used in the computation of basic EPS:
For the six months ended
--------------------------------------------------
30 September 2023 30 September 2022
------------------ ------------------------------
(Loss)/Profit for the period attributable to owners of the
company (55) 296
Weighted average ordinary shares outstanding for basic EPS(1) 3,751,042,649 3,753,179,654
Basic (Loss)/Earning per share (1.5 cents) 7.9 cents
------------------ ------------------------------
The details used in the computation of diluted EPS: For the six months ended
--------------------------------------------------
30 September 2023 30 September 2022
------------------ ------------------------------
(Loss)/Profit for the period attributable to owners of the
company (55) 296
Weighted average ordinary shares outstanding for diluted
EPS(1)(2) 3,751,042,649 3,759,599,604
Diluted (Loss)/Earning per share (1.5 cents) 7.9 cents
------------------ ------------------------------
(1) The difference between the basic and diluted number of shares at the end of September
2022 being 6,419,950 shares relates to awards committed but not yet issued under the Group's
share-based payment schemes.
(2) The 5,714,418 shares granted under different share-based plans are not included in the
calculation of diluted earnings per share for the six months ended 30 September 2023 as these
are anti-dilutive on account of losses during the period. These options could potentially
dilute basic earning per share in future.
9. Property, plant and equipment ('PPE')
The following table presents the reconciliation of changes in
the carrying value of PPE for the six months ended 30 September
2023 and 30 September 2022:
Leasehold Improvements Building Land Plant and Furniture Vehicles Office Computer Total Capital work in
Equipment & Fixture Equipment progress (2)
------------------------- ---------- ------ ----------- ----------- ---------- ----------- ---------- -------- -----------------
Gross carrying
value
Balance as of 1
April 2022 49 47 26 3,045 62 22 55 703 4,009 189
Additions /
capitalization 2 - 0 249 12 0 6 31 300 306
Disposals /
adjustments
(1) (0) - - (12) (3) (0) (1) (1) (17) (299)
Foreign
currency
translation
impact (4) (3) (3) (302) (5) (1) (4) (45) (367) (8)
Balance as of
30 September
2022 47 44 23 2,980 66 21 56 688 3,925 188
Balance as of
1 April 2023 49 43 25 3,249 70 22 61 696 4,215 212
Additions /
capitalization 0 0 - 241 5 0 9 22 277 304
Disposals /
adjustments
(1) (0) (1) - (20) (4) 0 1 0 (24) (277)
Foreign
currency
translation
impact (5) (5) (2) (910) (8) (0) (10) (94) (1,034) (46)
Balance as of
30 September
2023 44 37 23 2,560 63 22 61 624 3,434 193
Accumulated
Depreciation
Balance as of 1
April 2022 44 20 - 1,003 23 20 32 653 1,795 -
Charge 1 1 - 184 5 0 6 15 212 -
Disposals /
adjustments
(1) (0) - - (12) (3) (0) 1 (3) (17) -
Foreign
currency
translation
impact (4) (2) - (201) (3) (1) (3) (42) (256) -
Balance as of
30 September
2022 41 19 - 974 22 19 36 623 1,734 -
Balance as of 1
April 2023 42 19 - 1,137 30 20 39 633 1,920 -
Charge 1 1 - 181 6 0 8 18 215 -
Disposals /
adjustments
(1) 0 (0) - (26) (4) 2 4 1 (23) -
Foreign
currency
translation
impact (4) (3) - (507) (4) (1) (9) (85) (613) -
Balance as of
30 September
2023 39 17 - 785 28 21 42 567 1,499 -
Net carrying
value
As of 1 April
2022 5 27 26 2,042 39 2 23 50 2,214 189
As of 30
September 2022 6 25 23 2,006 44 2 20 65 2,191 188
As of 1 April
2023 7 24 25 2,112 40 2 22 63 2,295 212
As of 30
September 2023 5 20 23 1,775 35 1 19 57 1,935 193
-
(1) Related to the reversal of gross carrying value and
accumulated depreciation on retirement/ disposal of PPE and
reclassification from one category of asset to another.
(2) The carrying value of capital work-in-progress as at 30
September 2023 and 30 September 2022 mainly pertains to plant and
equipment.
10. Goodwill
The following table presents the reconciliation of changes in
the carrying value of goodwill for the six months ended 30
September 2023 and 30 September 2022
Goodwill
---------
Balance as of 1 April 2022 3,827
Foreign currency translation impact (251)
---------
Balance as of 30 September 2022 3,576
Balance as of 1 April 2023 3,516
Foreign currency translation impact (527)
---------
Balance as of 30 September 2023 2,989
---------
11. Cash and bank balances ('C&CE')
For the purpose of the statement of cash flows, C&CE are as
follows:
As of
--------------------------------------
30 September 2023 30 September 2022
------------------ ------------------
Cash and cash equivalents as per statement of financial position 429 655
Balance held under mobile money trust 720 596
Bank overdraft (414) (288)
------------------ ------------------
735 963
------------------ ------------------
12. Share capital
As of
-----------------------------------------------------
30 September 2023 31 March 2023
------------------ ---------------------------------
Issued, subscribed and fully paid-up shares
3,758,151,504 Ordinary shares of $0.50 each
(March 2023: 3,758,151,504) 1,879 1,879
Nil deferred shares of $0.50 each
(March 2023: 3,081,744,577) - 1,541
1,879 3,420
------------------ ---------------------------------
Terms/rights attached to equity shares
The company has followings two classes of ordinary shares:
-- Ordinary shares having par value of $0.50 per share. Each
holder of equity shares is entitled to cast one vote per share and
carry a right to dividends.
-- Deferred shares of $0.50 each. These shares have been
cancelled and extinguished during the period ended 30th September
2023. For details, please refer to note 4(c).
13. Borrowings
Non-current
As of
----------------------------------
30 September 2023 31 March 2023
------------------ --------------
Secured
Term loans 44 43
Less: Current portion (A) (9) (8)
------------------ --------------
35 35
Unsecured
Term loans(1) 1,048 964
Non- convertible bonds (1) (2) 553 554
------------------ --------------
1,601 1,518
Less: Current portion (B) (703) (320)
------------------ --------------
898 1,198
933 1,233
------------------ --------------
C urrent
As of
----------------------------------
30 September 2023 31 March 2023
------------------ --------------
Secured
Term loans(1) 0 1
0 1
Unsecured
Term loans(1) 245 255
Bank overdraft 414 361
------------------ --------------
659 616
Current maturities of long-term borrowings (A+B) 712 328
------------------ --------------
1,371 945
------------------ --------------
(1) Includes debt origination costs.
(2) It includes impact of fair value hedges.
14. Contingent liabilities and commitments
(i) Contingent liabilities
As of
----------------------------------
30 September 2023 31 March 2023
------------------ --------------
(a) Taxes, duties and other demands (under adjudication / appeal / dispute)
-Income tax 14 16
-Value added tax 20 20
-Customs duty & Excise duty 9 9
-Other miscellaneous demands 5 5
( b) Claims under legal and regulatory cases including
arbitration matters (1) 76 82
------------------ --------------
124 132
================== ==============
The reduction of $8m in contingent liabilities during the six
months ended 30 September 2023 is primarily due to currency
devaluation in subsidiaries.
(1) One of the subsidiaries of the Group is involved in a
dispute with one of its vendors, with respect to invoices for
services provided to a subsidiary under a service contract. The
original order under the contract was issued by the subsidiary for
a total amount of Central African franc (CFA) 473,800,000
(approximately $1m). In 2014, the vendor-initiated arbitration
proceedings claiming a sum of approximately CFA 1.9 billion
(approximately $3m) based on the court award. Multiple court
proceedings have happened from 2015 onwards and in mid-May 2019,
the lower courts imposed a penalty of CFA 35 billion (approximately
$57m), based on which certain banks of the subsidiary were summoned
to release the funds. The subsidiary immediately lodged an appeal
in the Supreme Court for a stay of execution which was granted.
Subsequently, the vendor filed an appeal before the Common Court of
Justice and Arbitration (CCJA). Quite unexpectedly, in April 2020,
the CCJA lifted the Supreme Court stay of execution. In May 2021,
the Commercial Division of the High Court maintained new seizures
carried out by the Vendor. The subsidiary appealed and the Court of
Appeal determination on the seizures is pending as of April 2022.
In March 2022 the CCJA interpreted its judgment of March 2019 to
indicate that the daily penalty could not be maintained after its
ruling dated 18 November 2018.
Separately, in December 2020 the subsidiary initiated criminal
proceedings against the vendor for fraud and deceitful conduct. In
February 2021, the investigating judge issued an order to cease the
investigation which was appealed by the Subsidiary. In March 2022,
the Court Appeal quashed the investigative judge order and allowed
the investigation into the Vendor to resume. Testimony in the
criminal investigation case happened on 26 April 2022 in front of
the criminal court of appeal where the honourable judge has further
re-examined the facts from the representatives of the subsidiary
against this case. A stay of execution was issued on 30 May 2022 by
the Chamber of Accusation in favour of subsidiary till the time
criminal investigation is completed.
As per the law no civil action can be initiated against the
subsidiary while criminal proceedings are ongoing. On 30 November
2022 subsidiary was notified that plaintiff has appealed in the
court of cassation against the stay of execution dated 30 May 2022.
Subsidiary has filed its response on 26 January 2023. On 08 May
2023, the subsidiary filed an application in the Commercial court
to seek a cease-and-desist order against the vendor. The matter is
pending before the Commercial court.
The Group still awaits the ruling on the merits of the case, and
the outcome of the criminal investigations, and until that time has
disclosed this matter as Contingent Liability for $57m (included in
the closing contingent liability). No provision has been made
against this claim.
In addition to the individual matters disclosed above, in the
ordinary course of business, the Group is a defendant or
co-defendant in various litigations and claims which are immaterial
individually.
There are uncertainties in the legal, regulatory and tax
environments in the countries in which the Group operates, and
there is a risk of demands, which may be raised based on current or
past business operations. Such demands have in past been challenged
and contested on merits with appropriate authorities and
appropriate settlements agreed. Other than amounts provided where
the Group believes there is a probable settlement and contingent
liabilities where the Group has assessed the additional possible
amounts, there are no other legal, tax or regulatory obligations
which may be expected to be material to the financial
statements.
(ii) Guarantees:
Guarantees outstanding as of 30 September 2023 and 31 March 2023
amounting to $13m and $9m respectively have been issued by banks
and financial institutions on behalf of the Group. These guarantees
include certain financial bank guarantees which have been given for
sub-judice matters and the amounts with respect to these have been
disclosed under capital commitments, contingencies and liabilities,
as applicable, in compliance with the applicable accounting
standards.
(iii) Commitments
The Group has contractual commitments towards capital
expenditure (net of related advances paid) of $362m and $313m as of
30 September 2023 and 31 March 2023 respectively.
15. Related Party disclosure
a) List of related parties
i) Parent company
Airtel Africa Mauritius Limited
ii) Intermediate parent entity
Network i2i Limited
Bharti Airtel Limited
Bharti Telecom Limited
iii) Ultimate controlling entity
Bharti Enterprises (Holding) Private Limited. It is held by
private trusts of Bharti family, with Mr. Sunil Bharti Mittal's
family trust effectively controlling the company.
iv) Associate:
Seychelles Cable Systems Company Limited
v) Joint Venture
Mawezi RDC S.A.
vi) Other entities with whom transactions have taken place during the reporting period
a. Fellow subsidiaries
Nxtra Data Limited
Bharti Airtel Services Limited
Bharti International (Singapore) Pte Ltd
Bharti Airtel (UK) Limited
Bharti Airtel (France) SAS
Bharti Airtel Lanka (Private) Limited
Bharti Hexacom Limited
b. Other related parties
Singapore Telecommunication Limited
vii) Key Management Personnel ('KMP')
a. Executive directors
Olusegun Ogunsanya
Jaideep Paul
b. Non-Executive directors
Sunil Bharti Mittal
Awuneba Ajumogobia
Douglas Baillie
John Danilovich
Andrew Green
Akhil Gupta
Shravin Bharti Mittal
Annika Poutiainen
Ravi Rajagopal
Kelly Bayer Rosmarin
Tsega Gebreyes
c. Others
Ian Basil Ferrao
Michael Foley (till June 2023)
Razvan Ungureanu
Luc Serviant (till May 2023)
Daddy Mukadi Bujitu
Neelesh Singh (till December 2022)
Ramakrishna Lella
Edgard Maidou (till June 2023)
Rogany Ramiah
Stephen Nthenge
Vimal Kumar Ambat (till October 2022)
Ashish Malhotra (till June 2022)
Vinny Puri (till June 2022)
C Surendran (till December 2022)
Olubayo Augustus Adekanmbi (till November 2022)
Anthony Shiner (since June 2022)
Apoorva Mehrotra (since October 2022)
Oliver Fortuin (since June 2023)
Martin Frechette (since June 2023)
Carl Cruz (since May 2023)
Anwar Soussa (since August 2023)
(b) The details of significant transactions with the related
parties for the six months ended 30 September 2023 and 30 September
2022 respectively, are provided below:
For the six months ended
--------------------------------------------
30 September 2023 30 September 2022
--------------------- ---------------------
Sale / rendering of services
Bharti Airtel (UK) Limited 42 36
Bharti Airtel Limited 5 5
Purchase / receiving of services
9 8
Bharti Airtel (France) SAS 10 10
Bharti Airtel (UK) Limited 19 19
Bharti Airtel Limited 6 4
Network i2i Ltd. 2 6
Dividend Paid
Bharti airtel Mauritius Limited 69 63
(c) Key management compensation ('KMP')
KMP are those persons having authority and responsibility for
planning, directing and controlling the activities of the Group,
directly or indirectly, including any director, whether executive
or otherwise. For the Group, these include executive committee
members. Remuneration to KMP were as follows:
For the six months ended
--------------------------------------------
30 September 2023 30 September 2022
--------------------- ---------------------
Short-term employee benefits 5 5
Performance linked incentive 2 2
Share-based payment 1 0
Other long term benefits 1 1
Other benefits 1 1
--------------------- ---------------------
10 9
--------------------- ---------------------
16. Fair Value of financial assets and liabilities
The details as to the carrying value, fair value and the level
of fair value measurement hierarchy of the group's financial
instruments are as follows:
Carrying value as of Fair value as of
---------------------------------------- ---------------------------------------
30 September 31 March 2023 30 September 2023 31 March 2023
2023
------------------- ------------------- ------------------ -------------------
Financial
assets
FVTPL
Derivatives
- Forward and
option
contracts Level 2 19 4 19 4
- Currency
swaps and
interest
rate swaps Level 2 0 9 0 9
Other bank
balances Level 2 0 4 0 4
Investments Level 2 0 0 0 0
Amortised
cost
Trade receivables 161 145 161 145
Cash and cash equivalents 429 586 429 586
Other bank balances 363 127 363 127
Balance held under mobile
money trust 720 616 720 616
Other financial assets 172 176 172 176
1,864 1,667 1,864 1,667
------------------- ------------------- ------------------ -------------------
Financial
liabilities
FVTPL
Derivatives
- Forward and
option
contracts Level 2 0 5 0 5
- Currency
swaps and
interest
rate swaps Level 2 0 0 0 0
- Cross
currency
swaps Level 3 118 43 118 43
- Embedded
derivatives Level 2 0 0 0 0
Amortised
cost
Long term
borrowings -
fixed rate Level 1 552 554 537 540
Long term
borrowings -
fixed rate Level 2 264 227 243 210
Long term borrowings -
floating rate 829 780 829 780
Short term borrowings 659 617 659 617
Put option
liability Level 3 562 569 562 569
Trade payables 399 460 399 460
Mobile money wallet balance 703 582 703 582
Other financial liabilities 518 680 518 680
------------------- ------------------- ------------------ -------------------
4,604 4,517 4,568 4,486
------------------- ------------------- ------------------ -------------------
The following methods/assumptions were used to estimate the fair
values:
-- The carrying value of bank deposits, trade receivables, trade
payables, balance held under mobile money trust, mobile money
wallet balance, short-term borrowings, other current financial
assets and liabilities approximate their fair value mainly due to
the short-term maturities of these instruments.
-- Fair value of quoted financial instruments is based on quoted
market price at the reporting date.
-- The fair value of non-current financial assets, long-term
borrowings and other financial liabilities is estimated by
discounting future cash flows using current rates applicable to
instruments with similar terms, currency, credit risk and remaining
maturities.
-- The fair values of derivatives are estimated by using pricing
models, wherein the inputs to those models are based on readily
observable market parameters. The valuation models used by the
Group reflect the contractual terms of the derivatives (including
the period to maturity), and market-based parameters such as
interest rates, foreign exchange rates, volatility etc. These
models do not contain a high level of subjectivity as the valuation
techniques used do not require significant judgement and inputs
thereto are readily observable.
-- The fair value of the put option liability (included in other
financial liability) to buy back the stake held by non-controlling
interest in AMC BV is measured at the present value of the
redemption amount (i.e. expected cash outflows). Since, the
liability will be based on fair value of the equity shares of AMC
BV (subject to a cap) at the end of 48 months (from the first close
date), the expected cash flows are estimated by determining the
projected equity valuation of the AMC BV at the end of 48 months
(from the first close date) and applying cap thereon.
During the six months ended 30 September 2023 and 31 March 2023
there were no transfers between Level 1 and Level 2 fair value
measurements, and no transfer into and out of Level 3 fair value
measurements.
The following table describes the key inputs used in the
valuation (basis discounted cash flow technique) of the Level 2 and
Level 3 financial assets/liabilities as of 30 September 2023 and 31
March 2023:
Reconciliation of fair value measurements categorised within
level 3 of the fair value hierarchy - Financial
Assets/(Liabilities) (net)
-- Cross Currency Swaps ('CCS')
For the six months ended
--------------------------------------------
30 September 2023 30 September 2022
--------------------- ---------------------
Opening Balance (43) (3)
Recognised in finance costs in profit and loss(unrealized) (121) 2
Repayment of Interest 4 -
Foreign currency translation impact recognised in OCI 42 -
--------------------- ---------------------
Closing Balance (118) (1)
--------------------- ---------------------
-- Put option liability
For the six months ended
--------------------------------------------
30 September 2023 30 September 2022
--------------------- ---------------------
Opening Balance 569 579
Liability derecognised by crediting transaction with NCI reserve(1) (10) (8)
Recognized in finance costs in profit and loss (unrealized) 3 3
--------------------- ---------------------
Closing Balance 562 574
--------------------- ---------------------
(1) Put option liability was reduced by $10m (30 September 2022
$8m) for dividend distribution to put option NCI holders. Any
dividend paid to the put option NCI holders is adjustable against
the put option liability based on put option arrangement.
17. Events after the balance sheet date
No material subsequent events or transactions have occurred
since the date of statement of financial position except as
disclosed below:
-- The interim dividend of 2.38 cents per share was approved by
the Board on 29 October 2023 and has not been included as a
liability as at 30 September 2023.
Appendix
Additional information pertaining to three months ended 30
September 2023
Condensed Consolidated Statement of Comprehensive Income
(All amounts are in US Dollar millions unless stated
otherwise)
For three months ended
--------------------------------------
30 September 2023 30 September 2022
------------------ ------------------
Income
Revenue 1,246 1,308
Other income 9 5
1,255 1,313
Expenses
Network operating expenses 223 259
Access charges 78 100
License fee and spectrum usage charges 60 58
Employee benefits expense 79 70
Sales and marketing expenses 64 57
Impairment loss on financial assets 1 1
Other expenses 130 127
Depreciation and amortisation 197 195
832 867
Operating profit 423 446
Finance costs
- Net loss on foreign exchange and derivative financial instruments 84 114
- Other finance costs 115 98
Finance income (9) (6)
Share of profit for associate and joint venture accounted for using equity
method (0) (0)
Profit before tax 233 240
Income Tax expense 95 88
Profit for the period 138 152
Profit before tax (as presented above) 233 240
Add/(Less): Exceptional items - -
Underlying profit before tax 233 240
---------------------------------------------------------------------------- ------------------ ------------------
Profit after tax (as presented above) 138 152
Add/(Less): Exceptional items - (21)
Underlying profit after tax 138 131
---------------------------------------------------------------------------- ------------------ ------------------
Other comprehensive income ('OCI')
Items to be reclassified subsequently to profit or loss:
Net loss due to foreign currency translation differences (104) (91)
Tax on above (10) (2)
Share of OCI of associate (0) 0
(114) (93)
------------------ ------------------
Items not to be reclassified subsequently to profit or loss:
Re-measurement loss on defined benefit plans (1) (1)
Tax on above 0 0
(1) (1)
------------------ ------------------
Other comprehensive loss for the period (115) (94)
------------------ ------------------
Total comprehensive income for the period 23 58
================== ==================
For three months ended
--------------------------------------
30 September 2023 30 September 2022
------------------ ------------------
Profit for the period attributable to: 138 152
Owners of the company 115 133
Non-controlling interests 23 19
Other comprehensive loss for the period attributable to: (115) (94)
Owners of the company (106) (95)
Non-controlling interests (9) 1
Total comprehensive income for the period attributable to: 23 58
Owners of the company 9 38
Non-controlling interests 14 20
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 Adjustments to reconcile to IFRS measure Table Definition and purpose
equivalent reference(1)
IFRS measure
--------------------------
Underlying Operating Table A The Group defines
EBITDA and profit * Depreciation and amortisation underlying EBITDA as
margin operating profit/(loss)
for the period before
* Exceptional items depreciation
and amortisation and
adjusted for exceptional
items.
The Group defines
underlying EBITDA margin
as underlying EBITDA
divided by revenue.
Underlying 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. U nderlying 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,
underlying 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
underlying EBITDA and
margin.
Exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison of the Group's
performance on a
period-to-period
basis and could distort
the understanding of our
performance for the
period and the
comparability
between periods and hence
are adjusted to arrive at
underlying EBITDA and
margin.
-------------- -------------- ------------------------------------------------------------ ------------ --------------------------
Underlying Profit / Table B The Group defines
profit / (loss) before * Exceptional items underlying profit/(loss)
(loss) before tax before tax as
tax 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.
Exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison of the Group's
performance on a
period-to-period
basis and could distort
the understanding of our
performance for the
period and the
comparability
between periods and hence
are adjusted to arrive at
underlying profit/(loss)
before tax.
-------------- -------------- ------------------------------------------------------------ ------------ --------------------------
Effective tax Reported tax Table C The Group defines
rate rate * Exceptional items effective tax rate as
reported tax rate
(reported tax charge
* Foreign exchange rate movements divided by
reported profit before
tax) adjusted for
* One-off tax impact of prior period, tax litigation exceptional items,
settlement and impact of tax on permanent differences 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.
Exceptional tax items or
any tax arising on
exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison
of the Group's
performance on a
period-to-period basis
and could distort the
understanding
of our performance for
the period and the
comparability between
periods and hence are
adjusted
to arrive at effective
tax rate.
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) Table D The Group defines
profit/(loss) for the * Exceptional items underlying profit/(loss)
after tax period 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.
Exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison of the Group's
performance on a
period-to-period
basis and could distort
the understanding of our
performance for the
period and the
comparability
between periods and hence
are adjusted to arrive at
underlying profit/(loss)
after tax.
-------------- -------------- ------------------------------------------------------------ ------------ --------------------------
Earnings per EPS Table E The Group defines
share before * Exceptional items earnings per share before
exceptional exceptional items as
items 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.
Exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison of the Group's
performance on a
period-to-period
basis and could distort
the understanding of our
performance for the
period and the
comparability
between periods and hence
are adjusted to arrive at
earnings for the purpose
of earnings per
share before exceptional
items.
-------------- -------------- ------------------------------------------------------------ ------------ --------------------------
Operating Cash Table F The Group defines
free cash generated * Income tax paid operating free cash flow
flow from as net cash generated
operating from operating activities
activities * Changes in working capital before income tax paid,
changes in working
capital, other non-cash
* Other non-cash items items, non-operating
income,
exceptional items, and
* Non-operating income after capital
expenditures. The Group
views operating free cash
* Exceptional items flow
as a key liquidity
measure, as it indicates
* Capital expenditures the cash available to pay
dividends, repay debt
or make further
investments in the Group.
-------------- -------------- ------------------------------------------------------------ ------------ --------------------------
Net debt and Borrowings Table G The Group defines net
leverage * Lease liabilities debt as borrowings
ratio including lease
liabilities less cash and
* Cash and cash equivalent cash equivalents,
term deposits with banks,
deposits given against
* Term deposits with banks borrowings/non-derivative
financial instruments,
processing costs related
* Deposits given against borrowings/ non-derivative to borrowings and fair
financial instruments value hedge adjustments.
The Group defines
leverage ratio as net
* Fair value hedges debt divided by
underlying 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 No direct Table H The Group defines return
capital equivalent * Exceptional items to arrive at underlying EBIT on capital employed
employed ('ROCE') as underlying
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
underlying EBIT as
operating profit/(loss)
for the period adjusted
for exceptional
items.
Exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison of the Group's
performance on a
period-to-period
basis and could distort
the understanding of our
performance for the
period and the
comparability
between periods and hence
are adjusted to arrive at
underlying EBIT.
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
underlying EBIT for the
preceding
12 months by the average
capital employed (being
the average of the
capital employed averages
for the preceding four
quarters).
-------------- -------------- ------------------------------------------------------------ ------------ --------------------------
(1 Refer "Reconciliation between GAAP and Alternative
Performance Measures" for respective table.)
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 2023 for all countries, except Nigeria.
For Nigeria the constant currency exchange rate used is 752.2
NGN/USD which is prevailing rate as on 30 June 2023.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 2023 (Nigeria as of 30 June 2023) and are not
intended to represent the wider impact that currency changes has on
the business.
Reconciliation between GAAP and alternative performance
measures
Table A: EBITDA and margin
Description Unit Half year ended
of measure
-------------------------------- ------------- --------------------------------
September 2023 September 2022
-------------------------------- ------------- --------------- ---------------
Operating profit $m 885 872
Add:
Depreciation and amortisation $m 417 383
Exceptional items $m - -
EBITDA $m 1,302 1,255
Revenue $m 2,623 2,565
-------------------------------- ------------- --------------- ---------------
EBITDA margin (%) % 49.6% 48.9%
-------------------------------- ------------- --------------- ---------------
Table B: Underlying profit / (loss) before tax
Description Unit Half year ended
of measure
-------------------------- ------------- --------------------------------
September 2023 September 2022
-------------------------- ------------- --------------- ---------------
Profit before tax $m 12 516
Exceptional items (net) $m 471 -
Underlying profit before
tax $m 483 516
---------------
Table C: Effective tax rate
Description Unit Half year ended
of measure
------------------------------- -------------
September 2023 September 2022
------------------------------- ------------- ---------------------------------- ---------------------------------
Profit Income Tax Profit Income Tax
before tax expense rate before tax expense rate
taxation % taxation %
------------------------------- ------------- ---------- ------------- ------- ---------- ------------- ------
Reported effective
tax rate (after EI) $m 12 25 207.7% 516 186 36.0%
Exceptional items (provided
below) $m 471 154 - 42
Reported effective
tax rate (before EI) $m 483 179 36.9% 516 228 44.1%
Adjusted for:
Foreign exchange rate
movement for loss making
entity and/or non-DTA
operating companies
& holding companies $m 46 - 47 -
One-off adjustment and
tax on permanent differences $m - 28 5 (3)
Effective tax rate $m 529 207 39.0% 568 224 39.4%
------
Exceptional items
1. Deferred tax asset
recognition $m - - - 42
2. Net exchange loss
and loss on derivative
financial instruments. $m 471 154 - -
Total $m 471 154 - 42
------
Table D: Underlying profit / (loss) after tax
Description Unit Half year ended
of measure
------------------------------------------ ------------- ----------------------
September September
2023 2022
------------------------------------------ ------------- ---------- ----------
(Loss)/Profit after tax $m (13) 330
Operating and Non-operating exceptional
items $m 471 0
Tax exceptional items $m (154) (42)
Non-controlling interest exceptional
items $m (0) (0)
Underlying profit after tax $m 304 288
----------
Table E: Earnings per share before exceptional items
Description Unit Half year ended
of
measure
------------------------------------------ ---------- ----------------------
September September
2023 2022
------------------------------------------ ---------- ---------- ----------
(Loss)/Profit for the period
attributable to owners of the
company $m (55) 296
Operating and Non-operating exceptional $m 471 -
items
Tax exceptional items $m (154) (42)
Non-controlling interest exceptional $m (0) -
items
------------------------------------------ ---------- ---------- ----------
Profit for the period attributable
to owners of the company-
before exceptional items $m 262 254
Weighted average number of ordinary
shares in issue during the period. Million 3,751 3,753
Earnings per share before exceptional
items Cents 7.0 6.8
----------
Table F: Operating free cash flow
Description Unit Half year ended
of measure
----------------------------------------- ------------- ----------------------
September September
2023 2022
----------------------------------------- ------------- ---------- ----------
Net cash generated from operating
activities $m 1,121 1,011
Add: Income tax paid $m 227 288
Net cash generation from operation
before tax $m 1,348 1,299
Less: Changes in working capital
Increase in trade receivables $m 38 28
Increase in inventories $m 7 3
(Increase)/Decrease in trade
payables $m (8) 15
Increase in mobile money wallet
balance $m (139) (71)
Decrease in provisions $m 18 22
Increase in deferred revenue $m (10) (16)
Increase in other financial
and non-financial liabilities $m (24) (36)
Increase in other financial
and non-financial assets $m 71 16
Operating cash flow before changes
in working capital $m 1,301 1,260
Other non-cash adjustments $m 1 (5)
Operating exceptional items $m - -
EBITDA $m 1,302 1,255
Less: Capital expenditure $m (312) (310)
Operating free cash flow $m 990 945
----------
Table G: Net debt and leverage
Description Unit As at As at As at
of measure
------------------------------------- -------------
September March 2023 September
2023 2022
------------------------------------- ------------- ---------- ----------- ----------
Long term borrowing, net of
current portion $m 933 1,233 1,085
Short-term borrowings and current
portion of long-term borrowing $m 1,371 945 907
Add: Processing costs related
to borrowings $m 7 7 5
Add/(less): Fair value hedge
adjustment $m (3) (5) (7)
Less: Cash and cash equivalents $m (429) (586) (655)
Less: Term deposits with banks $m (357) (117) (5)
Add: Lease liabilities $m 1,805 2,047 1,948
Net debt $m 3,327 3,524 3,278
----------
EBITDA (LTM) $m 2,621 2,575 2,468
Leverage (LTM) times 1.3 1.4 1.3
------------------------------------- ------------- ---------- ----------- ----------
Table H: Return on capital employed
Description Unit Half year ended
of
measure
------------------------------------- ---------- ----------------------
September September
2023 2022
------------------------------------- ---------- ---------- ----------
Operating profit (preceding 12
months) $m 1,770 1,675
Add:
Operating exceptional items $m - 32
------------------------------------- ---------- ---------- ----------
EBIT (preceding 12 months) $m 1,770 1,707
------------------------------------- ---------- ---------- ----------
Equity attributable to owners of
the Company $m 2,809 3,444
Add: Put option given to minority
shareholders $m 562 574
------------------------------------- ---------- ---------- ----------
Gross equity attributable to owners
of the Company $m 3,371 4,018
------------------------------------- ---------- ---------- ----------
Non-controlling interests (NCI) $m 168 148
Net debt (refer Table G) $m 3,327 3,278
------------------------------------- ---------- ---------- ----------
Capital employed $m 6,867 7,444
------------------------------------- ---------- ---------- ----------
Average capital employed (1) $m 7,155 7,277
------------------------------------- ---------- ---------- ----------
Return on capital employed % 24.7% 23.5%
------------------------------------- ---------- ---------- ----------
(1) Average capital employed is calculated as average of capital
employed at closing and opening of relevant period.
Independent review report to Airtel Africa plc
Conclusion
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2023 which comprises the interim
condensed consolidated statement of comprehensive income, the
interim condensed consolidated statement of financial position, the
interim condensed consolidated statement of cash flows, the interim
condensed consolidated statement of changes in equity and related
notes 1 to 17.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2023 is not prepared, in all material respects, in
accordance with United Kingdom adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council for use in the
United Kingdom (ISRE (UK) 2410). A review of interim financial
information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not
enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with United Kingdom adopted
international accounting standards. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with United Kingdom adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
Conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410; however future events or conditions
may cause the entity to cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
In preparing the half-yearly financial report, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly financial report, we are
responsible for expressing to the company a conclusion on the
condensed set of financial statements in the half-yearly financial
report. Our Conclusion, including our Conclusion Relating to Going
Concern, are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the company in accordance with
ISRE (UK) 2410. Our work has been undertaken so that we might state
to the company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our review work, for this
report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
Birmingham, United Kingdom
29 October 2023
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
2023 for all reporting regions and service segments
except for Nigeria region and service
segment. For the Nigeria region and service segment,
constant currency amounts and growth
rates have been calculated using the closing exchange
rate prevailing as of 30 June 2023
In June 2023, the Central Bank of Nigeria (CBN) announced
changes to the operations in the
Nigerian Foreign Exchange Market, including the
abolishment of segmentation, with all segments
now collapsing into the Investors and Exporters (I&E)
window and the reintroduction of the
'Willing Buyer, Willing Seller' model at the I&E window.
As a result of this CBN decision,
the Nigerian naira has devalued against US Dollar by
approximately 62%. This change announced
by CBN led to a material impact on the Group's financial
statements and for better representation
of the performance of the business and comparability the
closing exchange rate prevailing
as of 30 Jun 2023 i.e. NGN 752.2/USD has been used for
calculation of constant currency amounts
and growth rates of Nigeria region and service segment.
---------------------------------------------------------- ----------------------------------------------------------
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 Foreign exchange rate movements are specific items that
companies are non-tax deductible in a few of
and holding companies 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 user charges (IUC) Interconnect user 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.
---------------------------------------------------------- ----------------------------------------------------------
Revenue An alternative performance measure (non-GAAP). Defined as
revenue before exceptional items.
---------------------------------------------------------- ----------------------------------------------------------
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
--------------- ------------------------------------------------
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
--------------- ------------------------------------------------
[1] Alternative performance measures (APM) are described on page
45.
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END
IR FIFERIRLIVIV
(END) Dow Jones Newswires
October 30, 2023 03:00 ET (07:00 GMT)
Airtel Africa (LSE:AAF)
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De Abr 2024 a May 2024
Airtel Africa (LSE:AAF)
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