Airtel Africa plc
Results for nine-month period ended 31 December
2023
1 February 2024
Highlights
Operating key performance indicators (KPIs)
·
Total customer base grew by 9.1% to 151.2 million.
The penetration of mobile data and mobile money services continued
to rise, driving a 22.4% increase in data customers to 62.7 million
and a 19.5% increase in mobile money customers to 37.5
million.
·
Constant currency ARPU growth of 10.0% was
primarily driven by increased usage across all segments.
·
Mobile money transaction value increased by 41.3%
in constant currency, with Q3'24 annualised transaction value of
$116bn in reported currency.
Financial performance
·
Revenue in constant currency grew by 20.2%, with
Q3'24 growth accelerating to 21.0%. Reported currency revenues
declined by 1.4% to $3,861m. In Q3'24, reported currency revenues
declined by 8.3% as currency devaluation (primarily the Nigerian
naira devaluation) continued to impact reported revenue
trends.
·
All segments continued to deliver double-digit
constant currency growth. Across the Group mobile services revenue
grew by 18.6% in constant currency, driven by voice revenue growth
of 11.2% and data revenue growth of 28.5%. Mobile money revenue
grew by 31.8% in constant currency.
·
Constant currency EBITDA increased 21.9%, with
Q3'24 EBITDA growing 23.3%. The EBITDA margin of 49.4% increased
72bps over the prior period despite foreign exchange headwinds and
inflationary pressure. Reported currency EBITDA declined by 0.4% to
$1,908m, with Q3'24 EBITDA 8.3% lower as currency headwinds
continued to impact reported trends.
·
Profit after tax was $2m in the period, primarily
impacted by significant foreign exchange headwinds, particularly
the $330m exceptional loss after tax following the devaluation of
the Nigerian naira in June 2023 and the Malawian kwacha in November
2023 after the structural changes in their respective FX markets.
The Nigerian naira devalued further in Q3'24, resulting in a $140m
derivative and foreign exchange losses net of tax, which is not
treated as an exceptional item.
·
EPS before exceptional items was 7.1 cents, a
decline of 34.6%. Basic EPS at negative (1.6 cents) compares to
12.5 cents in the prior period, impacted by the significant
derivative and foreign exchange losses as explained
above.
Capital allocation
·
Capex of $494m was 8.2% 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.
·
Leverage of 1.3x in December 2023, improved from
1.4x in the prior period. The remaining debt at HoldCo is $550m,
falling due in May 2024. Cash at the HoldCo was $560m at the end of
the period and the Group is expecting to fully repay the HoldCo
debt when due.
·
In light of the Holdco cash accretion and where
leverage is today, and in view of the consistent strong operating
cash generation of the Company, the Board intends to launch a share
buy-back programme of up to $100m, starting early March 2024 over a
12-month period.
Sustainability strategy
· Our
landmark five-year $57m partnership with UNICEF has been launched
across 10 of our markets providing access to educational resources,
free of charge, on our way to transforming the lives of over one
million children through our educational programmes by
2027.
·
In November 2023 we launched our Scope 3 strategy
which focuses on an ongoing engagement programme with our top tier
partners and suppliers, ensures a regular flow of information and
enables us to monitor their impact on the environment.
Olusegun Ogunsanya, Group chief executive officer, on the
trading update:
"We remain focussed on the execution
of our growth strategy and, combined with our strong operational
execution, this has ensured that we continue to see sustained,
positive growth momentum across the business, despite the
inflationary and currency headwinds. Demand remains resilient,
highlighting the vital nature of the voice, data and mobile money
services we provide to our customers across the region, and has
resulted in a strong 20.2% constant currency revenue growth over
the period, with an increase in EBITDA margins.
This strong operating performance
has limited the impact that currency movements have had on the
Group. In this regard, whilst further currency devaluation,
particularly in Nigeria, has weighed on our reported financial
performance, it will not affect the execution of our growth
plans.
I am pleased to note that our
sustained focus on capital allocation priorities will enable us to
fully repay HoldCo debt when due in May 2024, ensuring the
continued success of our balance sheet de-risking strategy. This
will allow us to continue investing in our strategic priorities to
provide affordable and reliable services to customers across our
markets, whilst also enabling us to capitalise on new business
opportunities, such as our new data centre business, Nxtra by
Airtel, which we launched in December.
In light of our consistent strong
operating performance and given current leverage, the Board intends
to launch a share buy-back programme of up to $100m, starting early
March 2024 over a 12-month period. We
continue to be well positioned to deliver on the attractive growth
opportunities our markets offer and despite the challenge of rising
diesel prices, ongoing currency devaluation and inflationary
pressures across some of our markets, we remain focussed on margin
resilience.
Alternative performance measures (APM)
1
(Nine-month period ended)
|
Description
|
Dec-23
|
Dec-22
|
Reported
currency
|
Constant
currency
|
$m
|
$m
|
change
|
change
|
Revenue
|
3,861
|
3,914
|
(1.4%)
|
20.2%
|
EBITDA
|
1,908
|
1,916
|
(0.4%)
|
21.9%
|
EBITDA margin
|
49.4%
|
49.0%
|
47
bps
|
72
bps
|
EPS before exceptional items ($
cents)2
|
7.1
|
10.8
|
(34.6%)
|
|
Operating free cash flow
|
1,414
|
1,459
|
(3.1%)
|
|
(1)
Alternative
performance measures (APM) are described on page
21.
(2) EPS before exceptional items
for the nine-months period ended 31 December 2023 would have been
$12.5 cents as against the reported $7.1 cents if the impact of
Nigerian Naira devaluation for the period was excluded. Significant
Naira devaluation during the period resulted in foreign exchange
and derivative losses of $205m (pre-tax: $301m) which has not been
reported as exceptional item and impacted pre-exceptional EPS by
$5.4 cents. Please refer to the commentary on finance costs as part
of 'Financial review for nine-month period ended 31 December 2023'
section on page 5 for more details.
GAAP measures
(Nine-month period ended)
|
Description
|
Dec-23
|
Dec-22
|
Reported
currency
|
$m
|
$m
|
change
|
Revenue
|
3,861
|
3,914
|
(1.4%)
|
Operating profit
|
1,293
|
1,318
|
(1.9%)
|
Profit after tax
|
2
|
523
|
(99.6%)
|
Basic EPS ($ cents)
|
(1.6)
|
12.5
|
(112.9%)
|
Net cash generated from operating
activities
|
1,766
|
1,711
|
3.2%
|
About Airtel Africa
Airtel Africa is a leading provider
of telecommunications and mobile money services, with a presence in
14 countries in Africa, primarily in East Africa and Central and
West Africa.
Airtel Africa offers an integrated
suite of telecoms solutions to its subscribers, including mobile
voice and data services as well as mobile money services, both
nationally and internationally. We aim to continue providing a
simple and intuitive customer experience through streamlined
customer journeys.
Enquiries
Conference call
Management will host an analyst and
investor conference call at 12:00pm UK time (BST), on Thursday
1st February 2024, including a Question-and-Answer
session.
To receive an invitation with the
dial in numbers to participate in the event, please register
beforehand using the following link:
Conference call registration link
Key consolidated financial information
Description
|
Unit of
measure
|
Nine-month period ended
|
Quarter ended
|
Dec-23
|
Dec-22
|
Reported currency
change %
|
Constant currency
change %
|
Dec-23
|
Dec-22
|
Reported currency
change %
|
Constant currency
change %
|
Profit and loss
summary
|
|
|
|
|
|
|
|
|
|
Revenue 1
|
$m
|
3,861
|
3,914
|
(1.4%)
|
20.2%
|
1,238
|
1,350
|
(8.3%)
|
21.0%
|
Voice revenue
|
$m
|
1,707
|
1,872
|
(8.8%)
|
11.2%
|
538
|
646
|
(16.8%)
|
10.7%
|
Data revenue
|
$m
|
1,343
|
1,318
|
1.9%
|
28.5%
|
428
|
454
|
(5.9%)
|
29.4%
|
Mobile money revenue
2
|
$m
|
631
|
515
|
22.4%
|
31.8%
|
215
|
183
|
17.2%
|
33.4%
|
Other revenue
|
$m
|
320
|
321
|
(0.2%)
|
22.6%
|
104
|
105
|
(0.7%)
|
29.8%
|
Expenses
|
$m
|
(1,971)
|
(2,007)
|
(1.8%)
|
19.0%
|
(634)
|
(691)
|
(8.2%)
|
18.8%
|
EBITDA 3
|
$m
|
1,908
|
1,916
|
(0.4%)
|
21.9%
|
606
|
661
|
(8.3%)
|
23.3%
|
EBITDA margin
4
|
%
|
49.4%
|
49.0%
|
47
bps
|
72
bps
|
49.0%
|
49.0%
|
0
bps
|
91
bps
|
Depreciation and
amortisation
|
$m
|
(615)
|
(598)
|
2.8%
|
25.3%
|
(198)
|
(215)
|
(8.0%)
|
21.5%
|
Operating exceptional
items
|
$m
|
-
|
-
|
0.0%
|
0.0%
|
-
|
-
|
0.0%
|
0.0%
|
Operating profit
|
$m
|
1,293
|
1,318
|
(1.9%)
|
20.4%
|
408
|
446
|
(8.5%)
|
24.1%
|
Other finance cost - net of finance
income
|
$m
|
(754)
|
(519)
|
45.4%
|
|
(352)
|
(161)
|
118.4%
|
|
Finance cost - exceptional items
5
|
$m
|
(484)
|
-
|
0.0%
|
|
(13)
|
-
|
0.0%
|
|
Total finance cost
6
|
$m
|
(1,238)
|
(519)
|
(138.7%)
|
|
(365)
|
(161)
|
126.2%
|
|
Profit before tax 7
|
$m
|
55
|
801
|
(93.1%)
|
|
43
|
285
|
(85.0%)
|
|
Tax
|
$m
|
(207)
|
(340)
|
(39.1%)
|
|
(28)
|
(112)
|
(74.8%)
|
|
Tax - exceptional items
5
|
$m
|
154
|
62
|
146.8%
|
|
0
|
21
|
(99.5%)
|
|
Total tax
credit/(charge)
|
$m
|
(53)
|
(278)
|
(80.9%)
|
|
(28)
|
(92)
|
(69.2%)
|
|
Profit after tax 7
|
$m
|
2
|
523
|
(99.6%)
|
|
15
|
193
|
(92.3%)
|
|
Non-controlling interest
|
$m
|
(63)
|
(55)
|
12.7%
|
|
(21)
|
(21)
|
(2.2%)
|
|
Profit attributable to owners of
the company - before exceptional items
|
$m
|
265
|
406
|
(34.6%)
|
|
3
|
151
|
(98.3%)
|
|
(Loss)/Profit attributable to owners of the
company
|
$m
|
(61)
|
468
|
(112.9%)
|
|
(6)
|
172
|
(103.5%)
|
|
EPS - before exceptional
items
|
cents
|
7.1
|
10.8
|
(34.6%)
|
|
0.1
|
4.0
|
(98.3%)
|
|
Basic EPS
|
cents
|
(1.6)
|
12.5
|
(112.9%)
|
|
(0.2)
|
4.6
|
(103.5%)
|
|
Weighted average number of
shares
|
million
|
3,751
|
3,752
|
(0.0%)
|
|
3,751
|
3,750
|
0.0%
|
|
Capex
|
$m
|
494
|
457
|
8.2%
|
|
182
|
147
|
24.4%
|
|
Operating free cash flow
|
$m
|
1,414
|
1,459
|
(3.1%)
|
|
424
|
514
|
(17.6%)
|
|
Net cash generated from operating
activities
|
$m
|
1,766
|
1,711
|
3.2%
|
|
646
|
700
|
(7.8%)
|
|
Net debt
|
$m
|
3,281
|
3,620
|
|
|
3,281
|
3,620
|
|
|
Leverage (net debt to
EBITDA)
|
times
|
1.3x
|
1.4x
|
|
|
1.3x
|
1.4x
|
|
|
Return on capital
employed
|
%
|
24.3%
|
23.3%
|
100
bps
|
|
24.0%
|
23.8%
|
22
bps
|
|
Operating KPIs
|
|
|
|
|
|
|
|
|
|
ARPU
|
$
|
3.0
|
3.3
|
(9.7%)
|
10.0%
|
2.8
|
3.3
|
(16.3%)
|
10.4%
|
Total customer base
|
million
|
151.2
|
138.5
|
9.1%
|
|
151.2
|
138.5
|
9.1%
|
|
Data customer base
|
million
|
62.7
|
51.3
|
22.4%
|
|
62.7
|
51.3
|
22.4%
|
|
Mobile money customer
base
|
million
|
37.5
|
31.4
|
19.5%
|
|
37.5
|
31.4
|
19.5%
|
|
(1)
Revenue includes inter-segment eliminations of
$140m for the nine-month period ended 31 December 2023 and $112m
for the prior period.
(2) Mobile money revenue post inter-segment eliminations with
mobile services was $491m for the nine-month period ended 31
December 2023, and $403m for the prior period.
(3) EBITDA includes other income of $18m for the nine-month period
year ended 31 December 2023 and $9m for the prior
period.
(4) EBITDA margin for the nine-month period ending 31 December
2023, normalised for a one-time opex benefit of $7m in Nigeria
(refer page 12), was 49.3%.
(5) Exceptional items of $484m for the nine-month period ended 31
December 2023 is on account of derivative and foreign exchange
losses due to Nigerian naira devaluation in June 2023 and Malawian
kwacha devaluation in November 2023. This has resulted in an
exceptional tax gain of $154m. Hence, there was a negative impact
of $330m on profit after tax. In Q3'24, the $13m exceptional item
relates to derivative and foreign exchange losses following the
Malawi kwacha devaluation in November 2023, partially offset by a
gain on the reassessment of losses associated with Nigerian naira
devaluation in June 2023.
(6) Please refer to the commentary on finance costs as part of
'Financial review for nine-month period ended 31 December 2023'
section below.
(7) In Q3'24, profit before tax of $43m was impacted by currency
devaluation in Nigeria and Malawi during the period. Excluding this
impact, profit before tax would have been $270m. Similarly, Q3'24
profit after tax would have been $168m versus the reported number
of $15m. For further detail refer to page 6.
Financial review for nine-month period ended 31 December
2023
Revenue
Group revenue in reported currency
declined by 1.4%, with constant currency growth of 20.2%. Constant
currency revenue growth accelerated to 21.0% in Q3'24. Double digit
constant currency revenue growth was posted across all reporting
segments. Group mobile services revenue grew by 18.6%, with voice
revenue growth of 11.2% and data revenues growing 28.5%. In
Nigeria, mobile services revenues increased by 22.7%, whilst East
Africa saw 21.2% growth and Francophone Africa increased by 10.3%.
Mobile money revenue grew by 31.8% in constant currency, driven by
growth of 35.1% in East Africa and 21.0% in Francophone Africa,
respectively.
The gap in constant and reported
currency revenue growth of 21.6% in the nine-month period ended 31
December 2023 is primarily due to the impact of average currency
devaluations between the periods, mainly in the Nigerian naira
(64.7%), the Zambian kwacha (22.7%), the Malawi kwacha (21.5%) and
the Kenyan shilling (21.1%), partially offset by appreciation in
the Central African franc (5.0%).
EBITDA
In constant currency, EBITDA
increased 21.9% with EBITDA margins of 49.4%, up 72bps. Reported
currency EBITDA declined by 0.4% to $1,908m reflecting the impact
of currency devaluation over the period. Mobile services
EBITDA increased 20.2% in constant currency as operating leverage
and cost efficiencies continued to offset FX headwinds and
inflationary pressure. Mobile money EBITDA margins of 51.8% was up
212bps in constant currency, resulting in constant currency growth
of 37.4%.
During the period, the Nigerian
naira devalued from 461 per US dollar to 952, resulting in a 51.5%
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 952 NGN/USD were to be used to consolidate the
results of the Group for the nine-month period ended 31 December
2023, reported revenues would have declined by 10.5% to $3,504m, as
opposed to the 1.4% decline which was reported. Similarly, reported
EBITDA would have declined by 10.3% to $1,719m, as opposed to the
0.4% decline reported. Group EBITDA margins have been
negatively impacted by approximately 50bps over the nine-month
period ended 31 December 2023 because of the reduced Nigerian
contribution to group revenue and EBITDA following the significant
naira devaluation.
The impact of the Nigerian naira
devaluation since March 2023 on reported revenue and EBITDA for the
period ending 31 December 2023 was $579m and $318m, respectively.
On a 12-month basis, a further 1% USD appreciation against the
naira would have a negative impact of $13m on revenues and $7m on
EBITDA.
Finance costs
Total finance costs for the
nine-month period ended 31 December 2023 at $1,238m, primarily
impacted by $748m of derivatives and foreign exchange losses as a
result of the Nigerian naira devaluation from 461 per US Dollar to
952. A significant portion of this devaluation occurred in June
2023 following the Central Bank of Nigeria (CBN) announcement on
changes to the operations in the Nigerian Foreign Exchange (FX)
market which contributed to a $447m loss (reflecting the
revaluation impact of US Dollar balance sheet liabilities and
derivatives) and was presented as an exceptional item. The naira
continued to devalue post June 2023 and faced a further significant
devaluation in Q3'24 from 777 per US Dollar to 952. This resulted
in a further loss of $214m in Q3'24 which has not been presented as
an exceptional item. Below is a summary of the quarterly impact and
allocation of the Nigerian naira devaluation on finance
costs:
Allocation
|
Q3'24
|
Q2'24
|
Q1'24
|
Nine-month period ended
Dec-23
|
Exceptional 1
|
-
|
-
|
447
|
447
|
Non-exceptional
|
214
|
35
|
52
|
301
|
Total
|
214
|
35
|
499
|
748
|
(1) Exceptional loss for Q1'24, which related to the Nigerian
Naira devaluation in June 2023, has been reassessed in Q3'24 to
$447m (from $471m reported in Q1'24).
Profit before tax
Profit before tax at $55m during
the nine-month period ended 31 December 2023 was impacted
by:
·
$484m of derivatives and foreign exchange losses
as a result of revaluation of USD balance sheet liabilities and
derivatives on account of devaluation of Nigerian naira in June
2023 and Malawian kwacha in November 2023. This impact has been
classified as an exceptional item; and
·
$301m of derivatives and foreign exchange loss (of
which $214m is in Q3'24) on account of Nigerian naira devaluation
for the balance of the period, which has not been classified as an
exceptional item.
Excluding these impacts, profit
before tax for nine-month period ended 31 December 2023 would have
been $840m and for the quarter ended 31 December 2023 would have
been $270m.
Taxation
Total tax charges was $53m as
compared to $278m in the prior period. Total tax charges reflected
an exceptional gain of $154m on account of the Nigerian naira and
Malawian kwacha devaluation during the current period compared with
the deferred tax credit of $62m in Kenya in the prior period, hence
a higher exceptional gain of $92m. Tax charges excluding
exceptional items was $207m compared to $340m in the prior
period.
Profit after tax
Profit after tax at $2m during the
nine-month period ended 31 December 2023 was impacted
by:
·
$330m of derivatives and foreign exchange losses
as a result of revaluation of USD balance sheet liabilities and
derivatives on account of devaluation of Nigerian naira in June
2023 and Malawian kwacha in November 2023. This impact has been
classified as an exceptional item; and
·
$205m of derivatives and foreign exchange loss (of
which $140m is in Q3'24) on account of Nigerian naira devaluation
for the balance of the period, which has not been classified as an
exceptional item.
Excluding these impacts, profit
after tax for nine-month period ended 31 December 2023 would have
been $537m and for the quarter ended 31 December 2023 would have
been $168m.
Basic EPS
Basic EPS at negative (1.6 cents)
during the nine-month period ended 31 December 2023 was impacted by
the derivative and foreign exchange losses as explained above.
Excluding these impacts, basic EPS for nine-month period ended 31
December 2023 would have been $12.5 cents and for the quarter ended
31 December 2023 would have been $3.8 cents.
Leverage
Leverage at 1.3x improved from
prior period leverage of 1.4x. Cash at the HoldCo was $560m at the
end of the period and the Group is expecting to fully repay the
HoldCo debt of $550m when due in May 2024. The EBITDA used to
calculate the leverage ratio of 1.3x is based on the last 12 months
to December 2023 and, therefore, does not fully incorporate the
impact from the devaluation of the Nigerian naira and Malawian
kwacha.
GAAP measures
Revenue
Reported revenue of $3,861m,
declined by 1.4% in reported currency, and grew by 20.2% in
constant currency driven by both customer base growth of 9.1% and
ARPU growth of 10.0%. The constant currency revenue growth was
offset by average currency devaluations between the periods, mainly
in the Nigerian naira (64.7%), the Zambian kwacha (22.7%), the
Malawi kwacha (21.5%) and the Kenyan shilling (21.1%), partially
offset by appreciation in the Central African franc
(5.0%).
Mobile services revenue grew by
18.6% in constant currency, supported by growth of 22.7% in
Nigeria, 21.2% in East Africa and 10.3% in Francophone Africa,
respectively. Mobile money revenue grew by 31.8% in constant
currency, driven by revenue growth in East Africa of 35.1% and
Francophone Africa of 21.0%.
During the period, the Nigerian
naira devalued from 461 per US dollar to 952, resulting in a 51.5%
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
952 NGN/USD were to be used to consolidate the results of the Group
for the nine-month period ended 31 December 2023, reported revenues
would have declined by 10.5% to $3,504m, as opposed to 1.4% decline
which was reported.
The Nigerian naira devaluation
since March 2023 impacted revenues by $579m during the nine-month
period ended 31 December 2023. On a 12-month basis, a further 1%
USD appreciation against the naira would have a negative impact of
$13m on revenues.
Operating profit
Operating profit in reported
currency declined by 1.9% to $1,293m as currency headwinds offset
strong revenue growth and continued improvements in operating
efficiency across the Group.
Total finance costs
Total finance costs for the
nine-month period ended 31 December 2023 at $1,238m (of which $748m
pertains to Nigerian naira devaluation which has been explained on
page 5). This represents an increase of $719m over prior period.
The primary driver of this increase was the $484m exceptional item
reflecting the revaluation impact of USD balance sheet liabilities
and derivatives following the Nigerian naira devaluation ($447m) in
June 2023 and Malawi kwacha ($37m) in November 2023. Excluding this
exceptional item, finance costs increased by $235m primarily driven
by the impact of the naira devaluation in Q3'24.
The Group's effective interest rate
increased to 9.3% compared to 7.2% 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 was $53m as
compared to $278m in the prior period. Total tax charges reflected
an exceptional gain of $154m on account of the Nigerian naira and
Malawian kwacha devaluation during the current period compared with
deferred tax credit of $62m in Kenya in the prior period, hence a
higher exceptional gain of $92m. Tax charges excluding exceptional
items was $207m as compared to $340m in the prior period. The tax
charge of $207m 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.
Profit after tax
Profit after tax at $2m during the
nine-month period ended 31 December 2023 was impacted
by:
·
$330m of derivatives and foreign exchange losses
as a result of revaluation of USD balance sheet liabilities and
derivatives on account of devaluation of Nigerian naira in June
2023 and Malawian kwacha in November 2023. This impact has been
classified as an exceptional item; and
·
$205m of derivatives and foreign exchange loss (of
which $140m is in Q3'24) on account of Nigerian naira devaluation
for the balance of the period, which has not been classified as an
exceptional item.
Basic EPS
Basic EPS at negative (1.6 cents)
during the nine-month period ended 31 December 2023 was impacted by
derivative and foreign exchange losses as explained
above.
Net cash generated from operating
activities
Net cash generated from operating
activities was $1,766m, 3.2% higher than the $1,711m of the prior
period.
Alternative performance measures[1]
EBITDA
EBITDA at $1,908m, declined by 0.4%
in reported currency, and increased by 21.9% in constant currency.
Growth in constant currency 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 47 basis points in reported currency to
49.4%.
Foreign exchange had an adverse
impact of $689m on revenue, and $344m on EBITDA, as a result of
average currency devaluations, mainly in the Nigerian naira
(64.7%), the Zambian kwacha (22.7%), the Malawi kwacha (21.5%) and
the Kenyan shilling (21.1%) in turn partially offset by
appreciation in the Central African franc (5.0%).
During the period, the Nigerian
naira devalued from 461 per US dollar to 952, resulting in a 51.5%
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
952 NGN/USD were to be used to consolidate the results of the Group
for the nine-month period ended 31 December 2023, reported EBITDA
would have declined by 10.3% to $1,719m, as opposed to 0.4% decline
reported. Group EBITDA margins have been
negatively impacted by approximately 50bps over the nine-month
period ended 31 December 2023 because of the reduced Nigerian
contribution to group revenue and EBITDA following the significant
naira devaluation.
The impact of the Nigerian naira
devaluation since March 2023 on reported EBITDA for the nine-month
period ending 31 December 2023 was $318m. On a 12-month basis, a
further 1% USD appreciation against the naira would have a negative
impact of $7 m on EBITDA.
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 $47m on revenues, $23m on EBITDA
and $17m 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 $13m on revenues, $7m
on EBITDA and $6m 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 40.2%,
compared to 38.8% in the prior period, largely due to profit mix
changes amongst the OpCos. 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 $484m 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) and Malawian kwacha devaluation in
November 2023 (from 1,169 MWK/USD in October 2023 to 1,683 MWK/USD
in November 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 $62m in
Kenya.
EPS before exceptional
items
EPS before exceptional items was at
7.1 cents, 34.6% lower compared to 10.8 cents in the prior period.
Current period EPS before exceptional items was negatively impacted
by derivative and foreign exchange losses due to significant Naira
devaluation during the period. EPS before exceptional items would
have been $12.5 cents as against the reported $7.1 cents if the
impact of Nigerian Naira devaluation for the period was
excluded.
Operating free cash
flow
Operating free cash flow was
$1,414m, lower by 3.1%, as a result of lower EBITDA and higher
capex during the period. Capital expenditure during the period of
$494m was 8.2% higher compared to the prior period.
Leverage
Leverage at 1.3x improved from
prior period leverage of 1.4x. Cash at the HoldCo was $560m at the
end of the period and the Group is expecting to fully repay the
HoldCo debt of $550m when due in May 2024. The EBITDA used to
calculate the leverage ratio of 1.3x is based on the last 12 months
to December 2023 and, therefore, does not fully incorporate the
impact from the devaluation of the Nigerian naira and Malawian
kwacha.
Other significant updates
Proposed share buyback
The Company has made significant
progress in recent years to reduce leverage and strengthen its
balance sheet. In light of the Holdco cash accretion and where
leverage is today, and in view of the consistent strong operating
cash generation of the Company, the Board intends to launch a share
buy-back programme. Under this programme, which is expected
to start in early March 2024, the Company proposes to purchase
up to $100m worth of the Company's shares over a 12-month period.
The Board believes that repurchasing its own shares is an
attractive use of its capital in light of the Group's strong long
term growth outlook. The programme will be executed using its cash
reserves and in accordance with applicable securities laws and
regulation.
Retirement of Airtel Africa plc CEO and appointment of
Successor
On 2 January 2024, Airtel Africa
plc announced the retirement of Chief Executive Officer Olusegun
"Segun" Ogunsanya and the appointment of Sunil Taldar, who joined
Airtel Africa in October 2023 as Director - Transformation, as
Chief Executive Officer (CEO). Following a transition period, Sunil
Taldar will be appointed to the Board as an Executive Director and
assume the role of CEO on 1 July 2024, at which time Segun will
retire from the Board and the Company.
Launch of Nxtra by Airtel
In December 2023, Airtel Africa
launched Nxtra by Airtel ("Nxtra"), a new data centre business
founded on a commitment to meet the continent's growing needs for
trusted, and sustainable data centre capacity and to serve the
fast-growing African digital economy. It aims to build one of the
largest network of data centres in Africa with high-capacity data
centres in major cities located strategically across Airtel
Africa's footprint, complementing its existing edge sites. Nxtra's
ambition will allow it to serve the growing need of African
enterprises and its data centre infrastructure will be designed to
host the next generation of computing, while providing multi-MW
capacity in a phased manner.
Nigerian Communications Commission directive on subscriber
registration compliance
In December 2023, the Nigerian
Communications Commission (NCC) informed Airtel Nigeria, in an
industry-wide directive, to undertake full network barring of all
SIMs that have failed to submit their National Identity Numbers
(NIN) on or before 28 February 2024. Furthermore, any SIMs with
five or more lines that have submitted NINs, but which remain
unverified, must be barred from 29 March 2024. Likewise, any SIMs
with less than five lines which remain unverified, are to be barred
from 15 April 2024. This directive is part of the ongoing Federal
Government NIN-SIM harmonisation exercise requiring all subscribers
to provide valid NIN information to update SIM registration
records.
Airtel Nigeria does not have
significant number of customers generating material revenues that
have yet to submit their NINs for verification. There are
approximately 9.2m customers which are currently going through the
process of NIN verification. Since the directive was issued in
December 2023, 4.5m customers have already been verified. We
continue to engage with the NCC and work closely with the relevant
authorities to facilitate and accelerate the verification process
to minimise the risk of service disruption to these customers,
whilst also limiting the revenue impact from our compliance to the
directive issued.
Devaluation of the Malawian Kwacha by the Reserve Bank of
Malawi
In November 2023, the Reserve Bank
of Malawi (RBM) announced structural changes to the foreign
exchange market with its decision to adjust the exchange rate from
selling rate of MWK 1,180 to a selling rate of MWK 1,700 to the US
dollar with effect from 9 November 2023.
As part of the structural changes,
RBM started authorizing dealer banks to freely negotiate exchange
rates to trade with their clients and amongst themselves,
notwithstanding any limitations previously in place.
This devaluation resulted in a
foreign exchange loss of $37m with a tax reversal of $8m and is
treated as an exceptional item.
Uganda Initial Public Offering (IPO)
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 on the Uganda Stock Exchange (USE) in-line with the 20%
minimum public listing obligation for all National Telecom
Operators under the current Uganda Communications (Fees &
Fines) (Amendment) Regulations 2020. The issued shares of Airtel
Uganda were listed on the Main Investment Market Segment of the USE
on 7 November 2023 at UGX100 per share.
On completion of the IPO in
November 2023, 4.3bn shares (10.89% of Airtel Uganda's total share
capital) were transferred to minority shareholders, whilst the
entire 40bn shares began trading on the Main Investment Market
Segment of the USE. Airtel Uganda received a 3-year waiver from the
Uganda Securities Exchange from the requirement to transfer the
remaining 9.11% required to meet the 20% shareholding listing
requirement.
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.
Share capital reduction
On 15 August 2023, Airtel Africa
announced the cancellation and extinction of all 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.
Information on additional
KPIs
An investor relations pack with
information on the additional KPIs and balance sheet is available
to download on our website at airtel.africa/investors
Financial review for nine-month period ended 31 December
2023
Nigeria - Mobile
services
Description
|
Unit of
measure
|
Nine-month period ended
|
Quarter ended
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Summarised statement
of
Operations
|
|
|
|
|
|
|
|
|
|
Revenue
|
$m
|
1,237
|
1,585
|
(21.9%)
|
22.7%
|
359
|
545
|
(34.1%)
|
24.7%
|
Voice revenue
1
|
$m
|
587
|
791
|
(25.8%)
|
16.3%
|
172
|
279
|
(38.4%)
|
16.7%
|
Data revenue
|
$m
|
539
|
653
|
(17.6%)
|
29.8%
|
154
|
222
|
(30.8%)
|
30.8%
|
Other revenue
2
|
$m
|
111
|
141
|
(20.7%)
|
25.8%
|
33
|
43
|
(23.8%)
|
44.4%
|
EBITDA
|
$m
|
673
|
817
|
(17.7%)
|
30.2%
|
198
|
284
|
(30.2%)
|
32.8%
|
EBITDA margin
|
%
|
54.4%
|
51.5%
|
283
bps
|
312
bps
|
55.3%
|
52.1%
|
311
bps
|
339
bps
|
Depreciation and
amortisation
|
$m
|
(223)
|
(248)
|
(10.0%)
|
43.0%
|
(67)
|
(92)
|
(26.9%)
|
38.1%
|
Operating exceptional
items
|
$m
|
-
|
-
|
0.0%
|
0.0%
|
-
|
-
|
0.0%
|
0.0%
|
Operating profit
|
$m
|
420
|
544
|
(22.8%)
|
21.7%
|
122
|
184
|
(33.8%)
|
27.5%
|
Capex
|
$m
|
178
|
167
|
6.4%
|
6.4%
|
69
|
34
|
102.9%
|
102.9%
|
Operating free cash flow
|
$m
|
495
|
650
|
(23.9%)
|
43.4%
|
129
|
250
|
(48.4%)
|
14.9%
|
Operating
KPIs
|
|
|
|
|
|
|
|
|
|
Total customer base
|
million
|
50.5
|
47.8
|
5.6%
|
|
50.5
|
47.8
|
5.6%
|
|
Data customer base
|
million
|
26.1
|
22.0
|
18.5%
|
|
26.1
|
22.0
|
18.5%
|
|
Mobile services ARPU
|
$
|
2.8
|
3.8
|
(26.0%)
|
16.3%
|
2.4
|
3.9
|
(37.5%)
|
18.2%
|
(1)
Voice revenue
includes inter-segment revenue of $1m in the nine-month period
ended 31 December 2023 and in the prior period. Excluding
inter-segment revenue, voice revenue was $586m in nine-month period
ended 31 December 2023 and $790m in the prior
period.
(2)
Other revenue
includes inter-segment revenue of $1m in the nine-month period
ended 31 December 2023 and $2m in the prior period. Excluding
inter-segment revenue, other revenue was $110m in the nine-month
period ended 31 December 2023 and $139m in the prior
period.
Revenue grew by 22.7% in constant
currency, with growth accelerating to 24.7% in Q3'24 largely driven
by strong data demand. In reported currency, revenues declined by
21.9% to $1,237m on account of the 64.7% average devaluation of the
Nigerian naira. The constant currency revenue growth was driven by
both customer base growth of 5.6% and ARPU growth of 16.3%. Q3'24
reported currency revenues declined by 34.1% reflecting the impact
of Nigerian naira devaluation from June 2023 onwards.
Voice revenue grew by 16.3% in
constant currency, driven by both customer base growth of 5.6% and
voice ARPU growth of 10.2%.
Data revenue grew by 29.8% in
constant currency, as a function of both data customer and data
ARPU growth of 18.5% and 12.2%, respectively. Data usage per
customer increased by 23.6% to 6.2 GB per month (from 5.0 GB in the
prior period). Our continued 4G network rollout has resulted in
nearly 100% of all our sites delivering 4G services. Furthermore,
235 5G sites are now operational. In Q3'24, 4G customers accounted
for 52.1% of our total data customer base and contributed to 86.2%
of total data usage. Q3'24 4G data usage per customer reached 12.8
GB per month, an increase of 42.0% (from 9.0 GB per customer per
month in Q3'23).
Other revenues grew by 25.8% in
constant currency, contributed by growth in messaging and
value-added services coupled with 29.6% growth in leased line
revenue.
EBITDA was $673m, up by 30.2% in
constant currency. The EBITDA margin increase to 54.4% from 51.5%
was primarily due to the growth in constant currency revenues,
supported by continued cost efficiencies. In Q3'24, EBITDA had a
one-time opex benefit of $7m on account of VAT refunds on tower
rentals, offsetting the additional pressure arising from increased
diesel costs and the introduction of VAT on tower company payments.
Excluding this one-time benefit, Q3'24 EBITDA margin increased by
approximately 120bps on a year over year basis, whilst on a
sequential basis EBITDA margins declined by approximately 100bps
largely reflecting the impact of increased diesel costs.
Operating free cash flow was $495m,
up by 43.4% in constant currency, largely due to the strong EBITDA
growth, partially offset by higher capex in current
period.
East Africa - Mobile services 1
Description
|
Unit of
measure
|
Nine-month period ended
|
Quarter ended
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Summarised statement
of
operations
|
|
|
|
|
|
|
|
|
|
Revenue
|
$m
|
1,227
|
1,129
|
8.7%
|
21.2%
|
405
|
388
|
4.2%
|
22.3%
|
Voice revenue
2
|
$m
|
651
|
632
|
3.1%
|
14.7%
|
211
|
215
|
(1.7%)
|
15.0%
|
Data revenue
|
$m
|
465
|
397
|
17.1%
|
30.9%
|
155
|
140
|
11.1%
|
30.8%
|
Other revenue
3
|
$m
|
111
|
100
|
10.8%
|
23.9%
|
39
|
34
|
13.5%
|
33.6%
|
EBITDA
|
$m
|
603
|
563
|
7.1%
|
18.8%
|
195
|
201
|
(3.0%)
|
13.8%
|
EBITDA margin
|
%
|
49.2%
|
49.9%
|
(70)
bps
|
(98)
bps
|
48.1%
|
51.7%
|
(360)
bps
|
(357)
bps
|
Depreciation and
amortisation
|
$m
|
(216)
|
(190)
|
13.5%
|
25.4%
|
(71)
|
(67)
|
6.5%
|
22.2%
|
Operating exceptional
items
|
$m
|
-
|
-
|
0.0%
|
0.0%
|
-
|
-
|
0.0%
|
0.0%
|
Operating profit
|
$m
|
351
|
347
|
1.2%
|
12.9%
|
111
|
125
|
(11.5%)
|
6.4%
|
Capex
|
$m
|
177
|
159
|
11.7%
|
11.7%
|
71
|
69
|
3.4%
|
3.4%
|
Operating free cash flow
|
$m
|
426
|
404
|
5.3%
|
21.9%
|
124
|
132
|
(6.3%)
|
19.7%
|
Operating
KPIs
|
|
|
|
|
|
|
|
|
|
Total customer base
|
million
|
69.0
|
62.4
|
10.7%
|
|
69.0
|
62.4
|
10.7%
|
|
Data customer base
|
million
|
26.6
|
21.2
|
25.7%
|
|
26.6
|
21.2
|
25.7%
|
|
Mobile services ARPU
|
$
|
2.1
|
2.1
|
(1.9%)
|
9.4%
|
2.0
|
2.1
|
(6.2%)
|
10.0%
|
(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 nine-month period
ended 31 December 2023 and in the prior period. Excluding
inter-segment revenue, voice revenue was $650m in nine-month period
ended 31 December 2023 and $631m in the prior
period.
(3)
Other revenue
includes inter-segment revenue of $9m in the nine-month period
ended 31 December 2023 and $8m in the prior period. Excluding
inter-segment revenue, other revenue was $102m in nine-month period
ended 31 December 2023 and $92m in the prior
period.
East Africa revenue grew by 8.7% in
reported currency to $1,227m, and grew by 21.2% in constant
currency. The constant currency growth was made up of voice revenue
growth of 14.7%, data revenue growth of 30.9% and other revenue
growth of 23.9%. The differential in growth rates is primarily
contributed by the average devaluation in Zambian kwacha (22.7%),
Malawi kwacha (21.5%) and Kenya shilling (21.1%).
Voice revenue grew by 14.7% in
constant currency, driven by both customer base growth of 10.7% and
voice ARPU growth of 3.5%. The customer base growth was largely
driven by expansion of both increased network coverage and the
increasing scale of the distribution network. Voice ARPU growth of
3.5% was supported by increase in voice usage per customer by 6.4%
to 410 minutes per customer per month partially offset by the
interconnect rate reduction in Tanzania and Rwanda.
Data revenue grew by 30.9% in
constant currency, largely driven by data customer base growth of
25.7% and data ARPU growth of 3.3%. Our continued investment in the
network and expansion of 4G network infrastructure helped us grow
both the data customer base and usage levels. 95.1% of our East
Africa network sites are now on 4G, compared with 89.8% in the
prior period. Furthermore, we have 679 5G sites in Kenya, Tanzania,
Uganda and Zambia. In Q3'24, 4G customers accounted for 54.3% of
our total data customer base and contributed to 77.2% of total data
usage. Q3'24 total data usage per customer increased to 4.9 GB per
customer per month, up by 16.0%, and 4G data usage per customer
reached 6.8 GB per customer per month.
EBITDA increased to $603m, up by
18.8% in constant currency. EBITDA margin at 49.2%, declined by 98
basis points in constant currency. Decline in Q3'24 EBITDA margin
was largely driven by rising energy costs over the period in key
markets which has negatively impacted margins by approximately
200bps.
Operating free cash flow was $426m,
up by 21.9% 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 of
measure
|
Nine-month period ended
|
Quarter ended
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Summarised statement
of
operations
|
|
|
|
|
|
|
|
|
|
Revenue
|
$m
|
912
|
807
|
13.0%
|
10.3%
|
307
|
275
|
11.9%
|
9.2%
|
Voice revenue
2
|
$m
|
473
|
453
|
4.3%
|
1.8%
|
156
|
154
|
1.5%
|
(1.1%)
|
Data revenue
|
$m
|
339
|
268
|
26.7%
|
23.6%
|
118
|
92
|
28.6%
|
25.4%
|
Other revenue
3
|
$m
|
100
|
86
|
16.0%
|
14.2%
|
33
|
29
|
14.9%
|
13.1%
|
EBITDA
|
$m
|
395
|
355
|
11.0%
|
8.3%
|
130
|
112
|
16.9%
|
14.1%
|
EBITDA margin
|
%
|
43.2%
|
44.0%
|
(77)
bps
|
(81)
bps
|
42.4%
|
40.6%
|
183
bps
|
180
bps
|
Depreciation and
amortisation
|
$m
|
(156)
|
(143)
|
9.2%
|
6.6%
|
(52)
|
(50)
|
4.1%
|
1.5%
|
Operating exceptional
items
|
$m
|
-
|
-
|
0.0%
|
0.0%
|
-
|
-
|
0.0%
|
0.0%
|
Operating profit
|
$m
|
203
|
187
|
8.5%
|
5.9%
|
66
|
53
|
23.7%
|
21.1%
|
Capex
|
$m
|
109
|
94
|
15.6%
|
15.6%
|
32
|
36
|
(9.6%)
|
(9.6%)
|
Operating free cash flow
|
$m
|
286
|
261
|
9.4%
|
5.8%
|
98
|
76
|
29.4%
|
24.7%
|
Operating
KPIs
|
|
|
|
|
|
|
|
|
|
Total customer base
|
million
|
31.6
|
28.3
|
11.8%
|
|
31.6
|
28.3
|
11.8%
|
|
Data customer base
|
million
|
10.0
|
8.1
|
24.1%
|
|
10.0
|
8.1
|
24.1%
|
|
Mobile services ARPU
|
$
|
3.4
|
3.3
|
1.0%
|
(1.4%)
|
3.3
|
3.3
|
(1.2%)
|
(3.6%)
|
(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 nine-month period
ended 31 December 2023 and in the prior period. Excluding
inter-segment revenue, voice revenue was $471m in nine-month period
ended 31 December 2023 and $451m in the prior
period.
(3)
Other revenue
includes inter-segment revenue of $2m in the nine-month period
ended 31 December 2023 and in the prior period. Excluding
inter-segment revenue, other revenue was $98m in nine-month period
ended 31 December 2023 and $84m in the prior
period.
Revenue grew by 13.0% in reported
currency and by 10.3% in constant currency. Higher reported
currency growth as compared to constant currency is due to the
appreciation in the Central African franc by 5.0% partially offset
by a 7.5% devaluation in the Madagascar ariary.
Voice revenue grew by 1.8% in
constant currency, as customer base growth of 11.8% was partially
offset by a decline in voice ARPU. The customer base growth was
driven by expansion of both network coverage and distribution
infrastructure.
Data revenue grew by 23.6% in
constant currency, supported by customer base growth of 24.1%.
Increased data usage across the network supported ARPU growth of
3.1%. Our continued 4G network rollout resulted in an increase in
total data usage of 51.2% and per customer data usage increase of
26.1%. For Q3'24, 4G data users constituted 62.1% of total data
users, compared with 54.0% in the prior period. 4G users
contributed 75.9% of total data usage this quarter, up from 70.8%
in prior quarter. Q3'24 data usage per customer increased to 4.5 GB
per month (up from 3.8 GB in the prior period), while 4G data usage
per customer reached 5.8 GB per month.
EBITDA at $395m, increased by 8.3%
in constant currency. The EBITDA margin declined to 43.2%, a
decline of 81 basis points in constant currency. EBITDA margin
decline was mainly due to an increase in fixed regulatory charges
in DRC and one-time opex benefit of $19m in the prior
period.
Operating free cash flow was $286m,
increased by 5.8% in constant currency, due to the increased
EBITDA, partially offset by increased capex.
Mobile services
Description
|
Unit of
measure
|
Nine-month period ended
|
Quarter ended
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Summarised statement of
operations
|
|
|
|
|
|
|
|
|
|
Revenue 1
|
$m
|
3,375
|
3,515
|
(4.0%)
|
18.6%
|
1,071
|
1,207
|
(11.2%)
|
19.3%
|
Voice revenue
|
$m
|
1,707
|
1,872
|
(8.8%)
|
11.2%
|
538
|
646
|
(16.8%)
|
10.7%
|
Data revenue
|
$m
|
1,343
|
1,318
|
1.9%
|
28.5%
|
428
|
454
|
(5.9%)
|
29.4%
|
Other revenue
|
$m
|
325
|
325
|
0.0%
|
22.6%
|
105
|
107
|
(1.1%)
|
29.8%
|
EBITDA
|
$m
|
1,672
|
1,734
|
(3.6%)
|
20.2%
|
523
|
597
|
(12.4%)
|
20.5%
|
EBITDA margin
|
%
|
49.5%
|
49.3%
|
22
bps
|
64
bps
|
48.8%
|
49.4%
|
(64)
bps
|
48
bps
|
Depreciation and
amortisation
|
$m
|
(595)
|
(581)
|
2.4%
|
24.9%
|
(190)
|
(209)
|
(8.8%)
|
20.9%
|
Operating exceptional
items
|
$m
|
-
|
-
|
0.0%
|
0.0%
|
-
|
-
|
0.0%
|
0.0%
|
Operating profit
|
$m
|
976
|
1,077
|
(9.4%)
|
15.0%
|
298
|
362
|
(17.9%)
|
17.2%
|
Capex
|
$m
|
464
|
420
|
10.5%
|
10.5%
|
172
|
139
|
24.4%
|
24.4%
|
Operating free cash flow
|
$m
|
1,208
|
1,314
|
(8.1%)
|
24.5%
|
351
|
458
|
(23.5%)
|
18.7%
|
Operating
KPIs
|
|
|
|
|
|
|
|
|
|
Mobile voice
|
|
|
|
|
|
|
|
|
|
Customer base
|
million
|
151.2
|
138.5
|
9.1%
|
|
151.2
|
138.5
|
9.1%
|
|
Voice ARPU
|
$
|
1.3
|
1.6
|
(16.5%)
|
1.9%
|
1.2
|
1.6
|
(24.1%)
|
1.0%
|
Mobile data
|
|
|
|
|
|
|
|
|
|
Data customer base
|
million
|
62.7
|
51.3
|
22.4%
|
|
62.7
|
51.3
|
22.4%
|
|
Data ARPU
|
$
|
2.6
|
3.0
|
(15.7%)
|
6.4%
|
2.3
|
3.0
|
(23.1%)
|
5.7%
|
(1) Mobile service revenue after inter-segment eliminations was
$3,370m in nine-month period ended 31 December 2023 and $3,511m in
the prior period.
Overall revenue from mobile
services declined by 4.0% in reported currency while it grew by
18.6% in constant currency. The constant currency growth was
evident across all regions and services. Mobile services revenue
grew in Nigeria by 22.7%, in East Africa by 21.2% and in
Francophone Africa by 10.3%, respectively.
Voice revenue grew by 11.2% in
constant currency, supported by both customer base growth of 9.1%
and voice ARPU growth of 1.9%. Customer base growth was driven by
the expansion of our network and distribution infrastructure. The
voice ARPU growth of 1.9% was supported by an increase in voice
usage per customer of 5.1%, reaching 286 minutes per customer per
month, with total minutes on the network increasing by
14.8%.
Data revenue grew by 28.5% in
constant currency, driven by both customer base growth of 22.4% and
data ARPU growth of 6.4%. The customer base growth was recorded
across all the regions supported by the expansion of our 4G
network. 94.0% of our total sites are now on 4G, compared with
90.0% in the prior period. 5G is operational across five countries,
with 914 sites deployed. In Q3'24, 4G customers accounted for 54.6%
of our total data customer base (up from 46.3%), contributing to
81.4% of total data usage. Q3'24 data usage per customer increased
to 5.5 GB per customer per month (from 4.6 GB in the prior period)
while 4G data usage per customer reached 8.7 GB per month (from 7.5
GB in the prior period). In the nine-month period ended 31 December
2023, data revenue contributed to 39.8% of total mobile services
revenue, up from 37.5% in the prior period.
EBITDA was $1,672m, increasing
20.2% in constant currency. The EBITDA margin improved by 22 basis
points to 49.5%, an improvement of 64 basis points in constant
currency.
Operating free cash flow was
$1,208m, up by 24.5% in constant currency, due to the increased
EBITDA, partially offset by increased capex.
Mobile money
Description
|
Unit of
measure
|
Nine-month period ended
|
Quarter ended
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Summarised statement of
operations
|
|
|
|
|
|
|
|
|
|
Revenue 1
|
$m
|
631
|
515
|
22.4%
|
31.8%
|
215
|
183
|
17.2%
|
33.4%
|
Nigeria
|
$m
|
1
|
0
|
-
|
-
|
0
|
0
|
-
|
-
|
East Africa
|
$m
|
481
|
395
|
21.8%
|
35.1%
|
162
|
142
|
13.8%
|
35.6%
|
Francophone Africa
|
$m
|
149
|
120
|
23.6%
|
21.0%
|
53
|
41
|
28.4%
|
25.5%
|
EBITDA
|
$m
|
327
|
256
|
27.6%
|
37.4%
|
113
|
92
|
23.4%
|
40.8%
|
EBITDA margin
|
%
|
51.8%
|
49.7%
|
210
bps
|
212
bps
|
52.7%
|
50.0%
|
263
bps
|
278
bps
|
Depreciation and
amortisation
|
$m
|
(14)
|
(13)
|
12.3%
|
26.8%
|
(5)
|
(5)
|
2.7%
|
23.4%
|
Operating profit
|
$m
|
303
|
237
|
28.0%
|
37.4%
|
105
|
84
|
25.1%
|
41.9%
|
Capex
|
$m
|
17
|
26
|
(35.8%)
|
(35.8%)
|
6
|
6
|
15.3%
|
15.3%
|
Operating free cash flow
|
$m
|
310
|
230
|
34.8%
|
46.3%
|
107
|
86
|
23.9%
|
42.6%
|
Operating
KPIs
|
|
|
|
|
|
|
|
|
|
Mobile money customer
base
|
million
|
37.5
|
31.4
|
19.5%
|
|
37.5
|
31.4
|
19.5%
|
|
Transaction value
|
$bn
|
84.6
|
64.3
|
31.6%
|
41.3%
|
28.9
|
24.2
|
19.7%
|
34.7%
|
Mobile money ARPU
|
$
|
2.0
|
2.0
|
(0.3%)
|
7.3%
|
1.9
|
2.0
|
(4.1%)
|
9.1%
|
(1)
Mobile money revenue post inter-segment
eliminations with mobile services was $491m for the nine-month
period ended 31 December 2023, and $403m for the prior
period.
Mobile money revenue grew by 22.4%
in reported currency, with constant currency growth of 31.8%. The
differential in growth rates is primarily as the result of an
average devaluation in Zambian kwacha (22.7%) and Malawi kwacha
(21.5%), partially offset by appreciation in Central African franc
(5.0%). The constant currency mobile money revenue growth was
driven by revenue growth in both East Africa and Francophone Africa
of 35.1% and 21.0%, respectively. In Nigeria, the company remains
focussed on customer acquisition through the quarter with 1.7
million of active customers registered for mobile money services in
Nigeria at the end of December 2023. Annualised transaction value
for Nigeria SmartCash grew by 45% in current quarter as compared to
quarter ended September 2023. Additionally, we added almost 51,000
agents during the quarter and reached almost 166,000 agents as of
31 December 2023.
The constant currency revenue
growth of 31.8% was driven by both customer base growth of 19.5%
and mobile money ARPU growth of 7.3%. The expansion of our
distribution network, particularly our exclusive channels of Airtel
Money branches and kiosks, supported customer base growth of 19.5%.
The mobile money ARPU growth of 7.3% was driven by transaction
value per customer growth of 15.0% in constant currency, to $268
per customer per month.
Q3'24 annualised transaction value
amounted to $116bn in reported currency, with mobile money revenue
contributing 16.3% of total Group revenue during the nine-month
period ending 31 December 2023.
EBITDA was $327m, up by 37.4% in
constant currency. The EBITDA margin reached 51.8%, an improvement
of 212 basis points in constant currency and 210 basis points in
reported currency, driven by continued operating
leverage.
Regional performance
Nigeria
Description
|
Unit of
measure
|
Nine-month period ended
|
Quarter ended
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Revenue
|
$m
|
1,238
|
1,585
|
(21.9%)
|
22.8%
|
359
|
545
|
(34.1%)
|
24.7%
|
Voice revenue
|
$m
|
587
|
791
|
(25.8%)
|
16.3%
|
172
|
279
|
(38.4%)
|
16.7%
|
Data revenue
|
$m
|
539
|
653
|
(17.6%)
|
29.8%
|
154
|
222
|
(30.8%)
|
30.8%
|
Mobile money revenue
|
$m
|
1
|
0
|
537.8%
|
930.3%
|
0
|
0
|
223.0%
|
512.8%
|
Other revenue
|
$m
|
112
|
141
|
(20.5%)
|
25.8%
|
33
|
43
|
(23.8%)
|
44.5%
|
EBITDA
|
$m
|
667
|
812
|
(17.8%)
|
30.0%
|
197
|
282
|
(30.1%)
|
33.1%
|
EBITDA margin
|
%
|
53.9%
|
51.2%
|
271
bps
|
301
bps
|
54.9%
|
51.8%
|
317
bps
|
346
bps
|
Operating
KPIs
|
|
|
|
|
|
|
|
|
|
ARPU
|
$
|
2.8
|
3.8
|
(26.0%)
|
16.4%
|
2.4
|
3.9
|
(37.5%)
|
18.3%
|
East Africa
Description
|
Unit of
measure
|
Nine-month period ended
|
Quarter ended
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Revenue
|
$m
|
1,610
|
1,444
|
11.5%
|
24.2%
|
534
|
502
|
6.4%
|
25.3%
|
Voice revenue
|
$m
|
651
|
632
|
3.1%
|
14.7%
|
211
|
215
|
(1.7%)
|
15.0%
|
Data revenue
|
$m
|
465
|
397
|
17.1%
|
30.9%
|
155
|
140
|
11.1%
|
30.8%
|
Mobile money revenue
|
$m
|
481
|
395
|
21.8%
|
35.1%
|
162
|
142
|
13.8%
|
35.6%
|
Other revenue
|
$m
|
106
|
97
|
9.9%
|
23.7%
|
37
|
33
|
13.3%
|
33.7%
|
EBITDA
|
$m
|
864
|
769
|
12.4%
|
24.7%
|
284
|
275
|
3.1%
|
21.8%
|
EBITDA margin
|
%
|
53.7%
|
53.2%
|
42
bps
|
20
bps
|
53.1%
|
54.8%
|
(168)
bps
|
(153)
bps
|
Operating
KPIs
|
|
|
|
|
|
|
|
|
|
ARPU
|
$
|
2.7
|
2.7
|
0.6%
|
12.1%
|
2.6
|
2.7
|
(4.3%)
|
12.8%
|
Francophone Africa
Description
|
Unit of
measure
|
Nine-month period ended
|
Quarter ended
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Dec-23
|
Dec-22
|
Reported
currency
change
|
Constant
currency
change
|
Revenue
|
$m
|
1,014
|
891
|
13.8%
|
11.2%
|
344
|
304
|
13.3%
|
10.6%
|
Voice revenue
|
$m
|
473
|
453
|
4.3%
|
1.8%
|
156
|
154
|
1.5%
|
(1.1%)
|
Data revenue
|
$m
|
339
|
268
|
26.7%
|
23.6%
|
118
|
92
|
28.7%
|
25.4%
|
Mobile money revenue
|
$m
|
149
|
120
|
23.6%
|
21.0%
|
53
|
41
|
28.4%
|
25.5%
|
Other revenue
|
$m
|
99
|
86
|
16.0%
|
14.2%
|
33
|
29
|
14.7%
|
12.9%
|
EBITDA
|
$m
|
475
|
418
|
13.6%
|
11.0%
|
159
|
133
|
19.2%
|
16.4%
|
EBITDA margin
|
%
|
46.8%
|
46.9%
|
(6)
bps
|
(8)
bps
|
46.1%
|
43.9%
|
226
bps
|
228
bps
|
Operating
KPIs
|
|
|
|
|
|
|
|
|
|
ARPU
|
$
|
3.7
|
3.7
|
1.7%
|
(0.7%)
|
3.7
|
3.7
|
0.1%
|
(2.4%)
|
Consolidated performance
Description
|
UoM
|
Nine-month period ended-
December 2023
|
Nine-month period ended-
December 2022
|
Mobile
services
|
Mobile
money
|
Unallocated
|
Eliminations
|
Total
|
Mobile
services
|
Mobile
money
|
Unallocated
|
Eliminations
|
Total
|
Revenue
|
$m
|
3,375
|
631
|
(0)
|
(145)
|
3,861
|
3,515
|
515
|
0
|
(116)
|
3,914
|
Voice revenue
|
$m
|
1,707
|
|
(0)
|
(0)
|
1,707
|
1,872
|
|
(0)
|
(0)
|
1,872
|
Data revenue
|
$m
|
1,343
|
|
-
|
(0)
|
1,343
|
1,318
|
|
-
|
(0)
|
1,318
|
Other revenue
|
$m
|
325
|
|
-
|
(5)
|
320
|
325
|
|
0
|
(4)
|
321
|
EBITDA
|
$m
|
1,672
|
327
|
(91)
|
0
|
1,908
|
1,734
|
256
|
(74)
|
0
|
1,916
|
EBITDA margin
|
%
|
49.5%
|
51.8%
|
|
|
49.4%
|
49.3%
|
49.7%
|
|
|
49.0%
|
Depreciation and
amortisation
|
$m
|
(595)
|
(14)
|
(6)
|
-
|
(615)
|
(581)
|
(13)
|
(4)
|
-
|
(598)
|
Operating
exceptional items
|
$m
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Operating profit
|
$m
|
976
|
303
|
14
|
0
|
1,293
|
1,077
|
237
|
4
|
0
|
1,318
|
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.
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 $47m on revenues, $23m on EBITDA and $17m 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 $13m on revenues, $7m on EBITDA and $6m
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.
Alternative performance measures (APMs)
Introduction
In the reporting of financial
information, the directors have adopted various APMs. These
measures are not defined by International Financial Reporting
Standards (IFRS) and therefore may not be directly comparable with
other companies APMs, including those in the Group's
industry.
APMs should be considered in
addition to, and are not intended to be a substitute for, or
superior to, IFRS measurements.
Purpose
The directors believe that these
APMs assist in providing additional useful information on the
underlying trends, performance and position of the
Group.
APMs are also used to enhance the
comparability of information between reporting periods and
geographical units (such as like-for-like sales), by adjusting for
non-recurring or uncontrollable factors which affect IFRS measures,
to aid users in understanding the Group's performance.
Consequently, APMs are used by the directors and management for
performance analysis, planning, reporting and incentive-setting
purposes.
The directors believe the following
metrics to be the APMs used by the Group to help evaluate growth
trends, establish budgets and assess operational performance and
efficiencies. These measures provide an enhanced understanding of
the Group's results and related trends, therefore increasing
transparency and clarity into the core results of the
business.
The following metrics are useful in
evaluating the Group's operating performance:
APM
|
Closest equivalent IFRS measure
|
Adjustments to reconcile to IFRS measure
|
Definition and
purpose
|
EBITDA and margin
|
Operating profit
|
· Depreciation and amortisation
|
The Group defines EBITDA as operating profit/(loss) for
the period
before depreciation and amortisation.
The Group defines EBITDA margin as
EBITDA divided by revenue.
EBITDA and margin are measures used
by the directors to assess the trading performance of the
business and are therefore the measure of segment profit that the Group presents under IFRS. EBITDA and margin are also
presented on a consolidated basis because the directors believe it
is important to consider profitability on a basis consistent with that of the Group's operating segments.
When presented on a
consolidated basis, EBITDA and margin are APMs.
Depreciation and amortisation is a
non-cash item which fluctuates depending on the timing of capital
investment and useful economic life. Directors believe that a
measure which removes this volatility improves comparability of the
Group's results period on period and hence is adjusted to arrive at
EBITDA and margin.
|
Underlying profit / (loss) before
tax
|
Profit / (loss) before tax
|
· Exceptional items
|
The Group defines underlying
profit/(loss) before tax as profit/(loss) before tax adjusted for
exceptional items.
The directors view underlying
profit/(loss) before tax to be a meaningful measure to analyse the
Group's profitability.
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 rate
|
Reported tax rate
|
· Exceptional items
· Foreign exchange rate movements
· One-off tax impact of prior period, tax litigation settlement
and impact of tax on permanent differences
|
The Group defines effective tax
rate as reported tax rate (reported tax charge divided by reported
profit before tax) adjusted for exceptional items, foreign exchange
rate movements and one-off tax items of prior period adjustment,
tax settlements and impact of permanent differences on
tax.
This provides an indication of the
current on-going tax rate across the Group.
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) after
tax
|
Profit/(loss) for the
period
|
· Exceptional items
|
The Group defines underlying
profit/(loss) after tax as profit/(loss) for the period adjusted
for exceptional items.
The directors view underlying
profit/(loss) after tax to be a meaningful measure to analyse the
Group's profitability.
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 share before exceptional
items
|
EPS
|
· Exceptional items
|
The Group defines earnings per
share before exceptional items as profit/(loss) for the period
before exceptional items attributable to owners of the company
divided by the weighted average number of ordinary shares in issue
during the financial period.
This measure reflects the earnings
per share before exceptional items for each share unit of the
company.
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 free cash flow
|
Cash generated from operating
activities
|
· Income tax paid
· Changes in working capital
· Other non-cash items
· Non-operating income
· Exceptional items
· Capital expenditures
|
The Group defines operating free
cash flow as net cash generated from operating activities before
income tax paid, changes in working capital, other non-cash items,
non-operating income, exceptional items, and after capital
expenditures. The Group views operating
free cash flow as a key liquidity measure, as it indicates the cash
available to pay dividends, repay debt or make further investments
in the Group.
|
Net debt and leverage
ratio
|
Borrowings
|
· Lease liabilities
· Cash and cash equivalent except held for a particular
use
· Term deposits with banks
· Deposits given against borrowings/ non-derivative financial
instruments
· Fair value hedges
|
The Group defines net debt as
borrowings including lease liabilities less cash and cash
equivalents except held for a particular use, term deposits with
banks, deposits given against borrowings/non-derivative financial
instruments, processing costs related to borrowings and fair value
hedge adjustments.
The Group defines leverage ratio as
net debt divided by 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 capital
employed
|
No direct equivalent
|
· Exceptional items to arrive at underlying EBIT
|
The Group defines return on capital
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).
|
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.
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.
|
CBN
|
Central Bank of Nigeria
|
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 companies
and holding companies
|
Foreign exchange rate movements are specific
items that are non-tax deductible in a few of our operating
entities, hence these hinder a like-for-like comparison of the
Group's effective tax rate on a period-to-period basis and are
therefore excluded when calculating the effective tax
rate.
|
Indefeasible Rights of Use (IRU)
|
A standard long-term leasehold contractual
agreement that confers upon the holder the exclusive right to use a
portion of the capacity of a fibre route for a stated
period.
|
Information and communication technologies
(ICT)
|
ICT refers to all communication technologies,
including the internet, wireless networks, cell phones, computers,
software, middleware, videoconferencing, social networking, and
other media applications and services.
|
Interconnect 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 except held for a
particular use, 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
|