Airtel Africa PLC Airtel Africa reports strong set of results

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Airtel Africa PLC Airtel Africa reports strong set of results

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Airtel Africa PLC

25 October 2019

Airtel Africa plc

Half yearly results, ended 30 September 2019

25(th) October 2019

Airtel Africa reports a strong set of results with sustained growth across voice data and mobile money

Key Highlights

   --       Customer base grew by 10.4% to 104 Mn 
   --       Revenue increased by 8.4% to $ 1,640 Mn in H1 with Q2 growth accelerating to 9.8% 

-- In constant currency terms, revenue grew 11.4% in H1 and 12.6% in Q2. This was the 7thconsecutive quarter of double-digit constant currency growth. The constant currency revenue growth of 11.4% was driven by double-digit growth in Nigeria and East Africa, partially offset by a slight decrease in Rest of Africa

-- Growth was broad based across all services, with revenue in Voice, Data and Mobile Money up by 3.2%, 37.8% and 46.5% respectively

-- Reported underlying EBITDA was $ 719 Mn in H1, up 10.9%, while constant currency underlying EBITDA growth was 13.7% over the same period

-- Underlying EBITDA margin in reported currency was 43.9% in H1, an increase of 100 bps, while there was an

increase of 90 bps in constant   currency terms 
   --       Operating profit increased 8.6% 
   --       Free cash flow was $ 237 Mn, up by 28% in H1 
   --       EPS before exceptional items was $ 4.1c and Basic EPS was $ 6.3c 
   --       Net debt to EBITDA was 2.3x, compared to 5.1x as of September 2018 
   --       The board declared an interim dividend of $ 3c per share. 
 
                  Alternative Performance Measures                                     GAAP Measures 
------------------------------------------------------------------- 
        Description           Sep-19   Sep-18   Reported   Constant       Description       Sep-19   Sep-18   Reported 
---------------------------                                          -------------------- 
                               $ Mn     $ Mn     Change     Change                           $ Mn     $ Mn     Change 
                                                    %          %                                                  % 
---------------------------  -------  -------  ---------  ---------  --------------------  -------  -------  --------- 
 Revenue                      1,640    1,513      8.4%      11.4%     Revenue               1,640    1,513      8.4% 
---------------------------  -------  -------  ---------  ---------  --------------------  -------  -------  --------- 
 Underlying                                                           Operating 
  EBITDA                       719      649      10.9%      13.7%      Profit                395      364       8.6% 
---------------------------  -------  -------  ---------  ---------  --------------------  -------  -------  --------- 
 Underlying                                       100                 Profit Before 
  EBITDA Margin               43.9%    42.9%       bps      90 bps     Tax                   316      122      158.4% 
---------------------------  -------  -------  ---------  ---------  --------------------  -------  -------  --------- 
                                                                      Profit After 
 Free Cash Flow                237      185      28.0%                 Tax                   228      204      11.9% 
---------------------------  -------  -------  ---------  ---------  --------------------  -------  -------  --------- 
 EPS before 
  exceptional                                                         Basic EPS 
  items ($ cents)              4.1      6.1     (32.7%)                ($ cents)             6.3      15.5    (59.4%) 
---------------------------  -------  -------  ---------  ---------  --------------------  -------  -------  --------- 
 EPS before 
  exceptional                                                         Basic EPS 
  items ($ cents)-Restated                                             ($ cents)-Restated 
  (1)                          3.7      1.9      96.8%                 (1)                   5.7      4.8      18.6% 
---------------------------  -------  -------  ---------  ---------  --------------------  -------  -------  --------- 
 

(1) In July 2019, following the announcement of the Initial Public Offering, the company issued 676,406,927 new shares. EPS has been restated considering all the shares as at 30(th) September 2019 had been issued on 1(st) April 2018 for like for like comparison. (2) For a reconciliation between GAAP Measures and Alternative Performance Measures, refer to section "Reconciliation between GAAP and alternative performance measures on page no 40. (3) The difference between reported currency and constant currency growth rates is on account of currency movements with reference to the US dollar rate.

Raghunath Mandava, Chief Executive Officer, commented on the trading update:

"These figures underline the strength of our ability to consistently deliver growth across voice, data and mobile money. In the first 6 months of this financial year, we delivered revenue growth of 11.4% in constant currency terms, with even higher underlying EBITDA growth as we continued to improve our operating leverage and tight focus on costs. This performance underlines our ability to consistently grow in double digits, powered by our growth engines of Data and Airtel Money growing at 37% and 46% respectively. This is the 7th quarter of double-digit growth with EBITDA margin expansion of over 90 basis points.

In July we reached an important milestone as we crossed 100 million customers across our footprint. Our strong customer growth aided by distribution expansion was a key driver behind voice revenue growth. Our investments ahead of the industry in LTE network along with our simple and intuitive customer journeys have helped grow data consumption by 81% and data revenue growth by 37.8%. Over the last 6 months we launched 4G services in Democratic Republic of Congo and Niger, and 4G sites now account for 58% of total sites. Now we are ready to launch in Tanzania, thereby making 4G services available across all our 14 countries.

Revenue in our Mobile Money business grew 46.5% in H1 and just above 50% in Q2, as a result of compelling customer propositions and the investments in our exclusive franchise stores and Kiosks. We have also announced exciting partnerships with Mastercard, Ecobank and Finablr which we believe will help to further support our growth aspiration and drive financial inclusion. The business continues to show positive momentum and we are confident we will continue to deliver sustained growth across Voice, Data and Mobile Money, underpinning our medium-term aspirations for revenue and profitable growth."

Key Financial information

 
      Description           UoM                 Half Year ended                            Quarter ended 
-----------------------  --------  ----------------------------------------  ---------------------------------------- 
                                    Sep-19   Sep-18   Reported    Constant    Sep-19   Sep-18   Reported    Constant 
                                                       Currency    Currency                      Currency    Currency 
                                                        Change      Change                        Change      Change 
                                                          %           %                             %           % 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 P&L Summary 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                             $ 
 Revenue                     Mn     1,640    1,513      8.4%        11.4%      844      769       9.8%        12.6% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                             $ 
 Expenses                    Mn     (931)    (881)      5.7%        8.8%      (478)    (443)      8.0%        11.1% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                             $ 
 Underlying EBITDA           Mn      719      649       10.9%       13.7%      372      332       12.2%       14.6% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Underlying EBITDA                                      100 
   Margin                    %      43.9%    42.9%       bps       90 bps     44.1%    43.2%     96 bps      79 bps 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Depreciation                $ 
  & Amortization             Mn     (300)    (253)      18.6%       21.9%     (152)    (125)      21.7%       24.7% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating Exceptional       $ 
  Items                      Mn      (22)     (30)     (26.9%)     (24.8%)     (10)     (12)     (19.4%)     (17.5%) 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating Profit            $ 
  (1)                        Mn      395      364       8.6%        11.1%      210      194       8.5%        10.3% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                             $ 
 Net finance costs           Mn     (148)    (218)     (32.0%)     (31.7%)     (66)    (143)     (53.7%)     (53.5%) 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Non-Operating               $ 
  Exceptional Items          Mn       69       -        0.0%        0.0%        6        -        0.0%        0.0% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Profit Before               $ 
  Tax(2)                     Mn      316      122      158.4%      172.1%      150       42      258.5%      279.9% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                             $ 
 Tax                         Mn     (116)     (64)      81.6%       99.0%      (68)     (18)     273.2%      287.4% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Tax - Exceptional           $ 
  items                      Mn       28      147      (81.2%)     (81.1%)      14       30      (53.8%)     (53.3%) 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                             $ 
 Total Tax Charge            Mn      (88)      82      206.3%      201.3%      (54)      12      533.4%      525.0% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Profit After                $ 
  Tax                        Mn      228      204       11.9%       11.8%       96       54       78.0%       83.6% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Non Controlling             $ 
  Interest                   Mn      (13)     (23)     (44.0%)     (44.0%)     (6)       2      (361.6%)    (361.6%) 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Profit attributable 
  to parent company 
  shareholder - 
  pre Exceptional            $ 
  items                      Mn      141       71       98.3%       96.4%       79       28      182.8%      203.2% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Profit attributable 
  to parent company          $ 
  shareholder                Mn      215      181       18.6%       18.7%       90       56       58.9%       65.7% 
-----------------------            -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Basic EPS - pre             $ 
  Exceptional items        Cents     4.1      6.1      (32.7%)                 2.1      2.4      (13.0%) 
 Basic EPS - pre 
  Exceptional items          $ 
  -Restated(3)             Cents     3.7      1.9       96.8%                  2.1      0.7      178.7% 
-----------------------            -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                             $ 
 Basic EPS                 Cents     6.3      15.5     (59.4%)                 2.4      4.8      (50.4%) 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Weighted Average           in 
  No of Shares               Mn     3,413    1,168     192.3%                 3,741    1,168     220.3% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                             $ 
 Capex                       Mn      246      155       59.2%                  147      106       38.9% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                             $ 
 Free Cash Flow              Mn      237      185       28.0%                  166       84       96.7% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                             $ 
 Net Debts                   Mn     3,191    6,439                            3,191    6,439 
-----------------------            -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating KPIs 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 ARPU                        $       2.7      2.8      (1.3%)       1.5%       2.8      2.8      (0.1%)       2.4% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Total customer 
  base                      Mn      103.9     94.1      10.4%                 103.9     94.1      10.4% 
-----------------------  --------  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Data customer 
  base                      Mn       31.9     27.1      17.7%                  31.9     27.1      17.7% 
-----------------------            -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 

(1) Operating profit includes $ 7.7 Mn contributed by other income & CSR expense in 6 months ended September 2019 as compared to $ 14.4 Mn in the 6 months ended September 2018

(2) Profit Before Tax in 6 months ended September 2018 included a $ 24 Mn loss from associates and JVs and $ 8 Mn for quarter ended September 2018

(3) In July 2019, following the announcement of the Initial Public Offering, the company issued 676,406,927 new shares. EPS has been restated considering all the shares as at 30(th) September 2019 had been issued on 1(st) April 2018 for like for like comparison.

Financial review for the Half Year, ended 30 September 2019

GAAP Measures

Revenue

Revenue increased by 8.4%, with constant currency growth of 11.4% being partially offset by currency devaluation. Growth accelerated in the second quarter to 12.6% in constant currency as a result of improvement in performance of Rest of Africa. Constant currency revenue growth was largely driven by a 10.4% increase in the customer base, to 104 Mn, and ARPU growth of 1.5%. Double digit revenue growth in Nigeria and East Africa was partially offset by a decrease in Rest of Africa revenues. Across services, revenue growth in constant currency terms was positive with mobile Voice up 3.2%, Data up 37.8%, and Mobile Money up 46.5%.

Operating Profit

Operating profit increased by 8.6% as a result of strong revenue growth, while operating expenditures as percentage of revenue remained broadly flat. Operating profit in constant currency terms grew by 11.1%, partially offsetting the currency devaluation.

Finance Cost

Finance costs reduced by $ 70 Mn. A 23% decrease in interest costs, as a result of lower debt, and derivatives gains more than offset the impact from one-off benefits incurred in the prior year, higher costs related to the IPO and foreign exchange impact on debt.

Taxation

Total tax charge for the period was $ 88 Mn, as compared to a tax credit of $ 82 Mn in the same period last year as a result of one-off items which included deferred tax recognition in Nigeria for $ 116 Mn and a tax reversal of $ 27 Mn in the 6 months ended 30 September 2018.

Profit After Tax

Profit After Tax was $ 228 Mn, an increase of 11.9% driven by an increase in operating profit and lower finance costs partially offset by higher tax charges.

Basic Earnings Per Share

Basic EPS was $ 6.3c, down 59.4%, due to the increase in the number of shares issued. If all the shares as at 30(th) September 2019 had been issued on 1(st) April 2018, the restated Basic EPS for 6 months ended 30 September 2019 would have been $ 5.7c and 6 months ended 30th September 2018 would have been $ 4.8c.

Alternative Performance Measures

Underlying EBITDA

Underlying EBITDA was $ 719 Mn, up 10.9% largely driven by 13.7% constant currency growth, partially offset by currency devaluation. Underlying EBITDA margin was at 43.9%, an improvement of 100 bps as operating efficiencies in network expenses and other overheads partially offset by one-off impact from the quality of service charge in Gabon.

Foreign exchange has an adverse impact of $ 43 Mn on revenues and $ 17 Mn on underlying EBITDA, largely driven by the devaluation of the Zambian Kwacha and Central African Franc. The currency exchange rates in other markets remained broadly stable compared to the same period last year

Tax

The adjusted effective tax rate for the current period was 37.1% as compared to 47% in the same period of the last year. The adjusted effective tax rate is lower compared to last financial year primarily on account of deferred tax asset recognition in Rest of Africa.

The adjusted effective tax rate is higher than the weighted average statutory tax rate of 33% largely due to the profit mix between various countries.

Exceptional Items

Exceptional items of $ 74 Mn for the half year ended 30 September 2019, mainly consisted of a $ 72 Mn gain related to the expired indemnity to certain pre-IPO investors as disclosed in the registration document published on 28 May 2019.

Free cash flow

Free cash flow was $ 237 Mn, up by 28%, underlying EBITDA increase was partially offset by capex increase, due to network modernization as well as roll out of additional sites, and reduction in working capital. Higher tax payments, largely as a result of higher operating profit, were offset by lower interest payments due to lower debt.

Earnings per share before exceptional items

Earnings per share before exceptional items was $ 4.1c, down 32.7%, as a result of an increase in the number of shares issued. However, if these shares had been issued on 1(st) April 2018, the restated EPS before exceptional items for 6 months ended 30 September 2019 would have been $ 3.7c and $ 1.9c cents for the 6 months ended 30th September 2018.

Net Debt and Leverage

Net debt reduced to $ 3,191 Mn in September 2019 compared to $ 6,439 Mn in September 2018. The reduction in net debt is a result of bond repayments of $ 2.2 Bn and an increase in cash from the net IPO proceeds of $ 670 Mn. As a result, leverage reduced to 2.3x as of September 2019 as compared to 5.1x as of September 2018 basis LTM EBITDA.

Other significant updates

Dividend

The Board approved an interim dividend of $ 3c per ordinary share. The proposed interim dividend will be paid on 29 November 2019 to shareholders who are on the register of members at close of business on 15 November 2019 (the Record Date). Further details will be announced by the Company in due course.

IPO

On 28 June 2019 the Airtel Africa announced the successful pricing of its Initial Public Offering at 80 pence (NGN 363) per Share. The Offer comprised 676,406,927 new Shares (being the total of 637,178,959 new Shares in respect of the global offer to institutional investors in various jurisdictions outside of Nigeria and 39,227,968 new Shares in respect of the offer to qualified institutional investors and high net worth investors in Nigeria.

Unconditional trading of the Shares commenced on the London Stock Exchange on 3 July 2019 and commenced on the Nigerian Stock Exchange on 9 July 2019.

FTSE 250 inclusion

On 9 September 2019 it was announced that Airtel Africa plc would be added to the FTSE 250 index as from 23 September 2019.

Mastercard partnership

On 9 October 2019 the Group announced a partnership with Mastercard which will give Airtel Money customers the ability to make online payments globally via a virtual Airtel Money Mastercard. In addition, Airtel Money customers, even those using a feature phone, will also be able to make in-person payments at outlets via Quick Response (QR) codes. To date, there are over 1 Mn merchant locations across Africa that accept Mastercard QR payments, approximately 700,000 of which are in Nigeria, Airtel Africa's largest market and where the company has already applied for a payment service bank license.

Ecobank partnership

On 21 October 2019 the Group announced a partnership with Ecobank which will allow millions of Airtel Money and Ecobank customers across Africa to improve their access to mobile financial services and carry out a variety of mobile transactions.

FINABLR partnership

On 22 October 2019 the Group announced partnership with Finablr which will enable Airtel Money customers to receive money directly to their phones, in their Airtel Money wallets, from more than 160 countries around the world. Money will be able to be sent conveniently and affordably through either the Finablr agent network in 160 countries, the Finablr online portal, an Airtel Money mobile app or the Airtel Africa online portal. Once the funds have been received on their handsets, Airtel Money customers have the choice to cash out in nearly 300,000 Airtel Money outlets and agents across Africa, make peer to peer payments, or pay bills and merchants Airtel Africa will shortly begin a marketing programme targeted at African communities abroad.

Regulatory Updates

The Group obtained a spectrum of 20 MHz in 2600 MHz band in Nigeria, an additional spectrum of 5 MHz in 1800 MHz band in Chad and 10 MHz in 2100 MHz band in Malawi during the period.

Nigeria Payment Bank License:

Application for Payment Service Bank (PSB) License and Super-Agent License has been filed with Central Bank of Nigeria (CBN). Approval of the brand name was received in July 2019.

Regulatory development related to Bharti Airtel Limited

On 24 October 2019, The Honourable Supreme Court of India delivered an adverse judgment impacting the Telecoms Service Providers in India including the Group's Parent company Bharti Airtel Limited. An assessment of this matter and whether it results in a material uncertainty regarding requiring the notes guaranteed by the Parent company to become repayable is included on page 23 Para 3.1.

Earnings call

Management will host an analyst call today at 9.30am. Details on how to access the call can be found on page 15.

Information on additional KPI

An IR pack with information on additional KPI and balance sheet is available to download on our website at https://airtel.africa/investors

Strategic overview

The Group is well positioned to capture growth opportunities presented by promising underlying macroeconomic and demographic trends in a fast-growing region that is vastly underpenetrated in terms of mobile and banking services. The Group's footprint is characterized by low but increasing levels of mobile connectivity, with a unique user penetration at 44%, highlighting the potential for growth across its footprint.

Airtel Africa's strategy underpins its medium-term aspirations for delivering growth in revenues and earnings, and our belief in enhancing connectivity and digitizing the countries where we operate. To this end, the Group has invested to expand its network footprint and number of 4G sites to enhance network capabilities and support its future business growth. A combination of an under-penetrated telecom market, a young addressable population and rising smartphone affordability, along with low data penetration and unbanked population, provide the growth opportunities for the data and Mobile Money segments.

The business continues to build momentum and the Group is confident of delivering sustained growth across voice, data and mobile money to deliver on its medium-term aspirations for revenue and profit growth. The young and fast-growing populations served by the Group are increasingly connecting to mobile networks, with solid growth in mobile subscribers in Airtel Africa's footprint expected in the years to come.

During the reporting period, the Group continued to make clear progress across each of its core strategic pillars, namely Win with Quality Customer; Win with Network; Win with Data; Win with Airtel Money; Win with Cost Optimization; Win with People and multiple in the areas of Additional Upside.

Quality Customers

Sub-Saharan Africa is characterized by low penetrated markets, with unique subscriber penetration at 44%. The Group's continued focus on building exclusive channels, combined with a simplified digital onboarding application with seamless onboarding customer experience have enabled to add quality customers, resulting in customer base growth of 10.4% to 104 Mn customers across our footprint. The customer growth remains well diversified across the three segments, where it increased by 15.6% in Nigeria, 9.1% in East Africa and 3.8% in the Rest of Africa. The overall churn decreased by 0.1% to 4.8%.

The Group continued to invest in its distribution network. During the first half of 2019, the Group added more activating outlets for KYC and exclusive franchise stores.

Customer onboarding experience continued to be enhanced through the launch of a Digital On-boarding application in 13 markets. The digitized application captures all regulatory requirements and allows most activations to be done within 5 minutes of SIM sale.

The Group's processes for improved self-care, implementation of interactive and dynamic IVRs helped to provide faster resolution to customer's queries, resulting in improved customer experience. In addition, the attractive pricing propositions resulted in increasing usage per customer by 3.7%, thereby contributing to voice revenue growth of 3.2%.

Quality Network

The Group strategy to invest in the 4G network through single RAN technology has resulted in better 4G coverage and enhanced the network's capacity, leading to high-speed data being made available to more of our customers. With continued investment in 4G network across our footprints, 4G sites now contributes 58% of total sites as compared to 27% in the last year. In the first half of the year, the Group launched 4G services in Democratic Republic of Congo and Niger and we are ready to activate the commercial launch in Tanzania, thereby making 4G services available across all of our 14 countries.

In the six months ended 30 September 2019, the Group completed its network modernization in nine countries (Uganda, Kenya, Zambia, Malawi, Rwanda, Congo B, Gabon, Madagascar and Seychelles) and continued the modernization in other countries.

The Group continued to invest to build large fibre capacities. In the past 6 months, the Group increased the number of sites on fibre and long-distance fibre capacities which has helped the Group to build strong redundancies, which further supported greater uptime and high-speed data availability to the Group's customers.

The Group also acquired additional spectrum, by adding 2600 MHz frequency (20 MHz) in Nigeria, 1800 MHz (5 MHz) in Chad and 2100 MHz (10 MHz) in Malawi. Furthermore, the Group continued the spectrum refarming activities to maximize network capacity.

The Group investment activities resulted in Capex amounting to $ 246 Mn in the first half of the year, excluding spectrum acquisitions.

Data

Data growth is a key pillar of the Group's strategy. The improved LTE network offered by the industry has contributed to increased smartphone penetration. The percentage of 3G and 4G enabled smartphones increased to 31% from 27.8% in the previous year. This has resulted in data customers increasing by 17.7% to 31.9 Mn which now represent 30.7% of our total customer base.

The Group's strategy to partner with key handset outlets, offering more affordable smartphone bundles and a customer-friendly SIM upgrade process has also supported data customer growth. Higher adoption of "More for More" data bundles has helped increase the data usage per customer to 1.6 GB/customer from 1GB/customer in previous period. All these have contributed to data revenue growth of 37.8%.

As a result of increased penetration and usage of 3G and 4G data customers, data ARPU increased by 18.5%, with every region contributing to data ARPU growth.

Mobile money

The Group continues to work on enhancing financial inclusion across its footprints. The lower penetration of traditional banking services demands mobile money services to fulfil the needs of largely unbanked customers. Continued expansion of distribution network of both agents and exclusive run franchisees (Kiosks, Mini-shops and Airtel Money Branches) contributed to ensure float availability to the customers. This has been a key driver of building greater confidence and interest towards Airtel Money across our footprints. The Group has also enhanced mobile money offerings to customers through enhancement of the merchant ecosystem, and offering insurance, loans and international money transfer facilities through partnership with other financial service providers.

Expanded distribution and enhanced offering contributed to mobile money customer growth of 2.6 Mn to a total of 15.5 Mn and an increased annualized transaction value to $ 30 billion from $ 24 billion in the previous period. Annualized transaction value in Q2'20 amounted to $ 32 billion.

Mobile money continues to be Airtel Africa's fastest-growing business segment, delivering revenue growth of 46.5% in the first half year, and slightly above 50% in Q2. It is an increasingly more important part of our business and currently accounts for 9% of total revenues.

The Group continued to enhance its customer offering by entering into partnerships with leading institutions such as Mastercard, Ecobank and Finablr to provide improved access to digital payments, to allow customers to receive conveniently and affordably funds from 160 different countries and improve customer access to financial services.

Operational Efficiency

The Group has an efficient operational model, focused on cost efficiency initiatives and enhancing our digitalization initiatives. We embrace robust cost discipline and continuously seek to improve processes with the aim to deliver one of the highest EBITDA margin in the industry. Additionally, we adopt technology in a financially efficient manner to optimize capital expenditures.

As we actively expand our infrastructure network, we adopt detailed analysis with the aim to minimise the incremental cost of building additional sites and additional capacity. We are also looking to limit on-going operating costs per-site by looking at initiatives to save energy costs, convert sites to a grid and consolidate sites already owned. Moreover, in the first half of the year we were able to largely reduce the cost per Mbps through our continued investments in large capacity IRUs and fibre in line with our model of creating huge throughputs.

We look at ways of simplifying our operating model on an on-going basis, making it seamlessly digitizable across all customer-facing and other processes. We established shared service centre in India, and we continue to look at ways to further leverage it by migrating more processes there.

In the first half year EBITDA margin expanded by 100bps to 43.9%, as a result of double-digit revenue growth and cost efficiencies.

Areas of additional upside

The Group's improved 4G network, alongside the increase in sites on fibre has provided an improved infrastructure to establish and grow both a wireless home broadband and enterprise businesses. The MiFi and the routers launched across the Group's footprints resulted in the growth of wireless home broadband. The Group has also witnessed encouraging results on fixed-line and enterprise business.

Financial review for the Half Year, ended 30 September 2019

Nigeria

 
   Description      UoM                Half Year ended                            Quarter ended 
-----------------  -----  ----------------------------------------  ---------------------------------------- 
                           Sep-19   Sep-18   Reported    Constant    Sep-19   Sep-18   Reported    Constant 
                                              Currency    Currency                      Currency    Currency 
                                               Change      Change                        Change      Change 
                                                 %           %                             %           % 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Summarized 
  Statement 
  of Operations 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
 Revenue             Mn     640      520       23.2%       23.1%      327      263       24.3%       24.2% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
  Voice Revenue      Mn     398      352       13.2%       13.1%      200      176       13.6%       13.5% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
  Data Revenue       Mn     199      113       75.9%       75.7%      105       59       78.3%       78.1% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
  Other Revenue      Mn      43       55      (20.9%)     (20.9%)      22       28      (21.8%)     (21.9%) 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Underlying          $ 
  EBITDA             Mn     341      246       38.2%       38.0%      174      129       34.8%       34.6% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Underlying                                    575         574                           413         414 
   EBITDA Margin     %     53.2%    47.4%       bps         bps      53.1%    49.0%       bps         bps 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Depreciation        $ 
  & Amortisation     Mn     (89)     (78)      13.5%       13.4%      (45)     (37)      20.1%       20.1% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Exceptional         $ 
  Item               Mn     (3)      (25)     (88.8%)     (88.8%)     (2)      (11)     (78.1%)     (88.3%) 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating           $ 
  Profit             Mn     252      168       50.3%       49.5%      129       92       40.7%       40.6% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
 Capex               Mn     115       44      162.3%      164.5%       62       30      108.9%      108.9% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating 
  Free Cash          $ 
  Flow               Mn     226      202       11.6%       10.8%      112       99       12.7%       12.4% 
-----------------         -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating 
  KPIs 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 ARPU                $      2.8      2.6       6.4%        6.3%       2.8      2.6       7.4%        7.3% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Total Customer 
  base               Mn     39.5     34.2      15.6%                  39.5     34.2      15.6% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Data Customer 
  base               Mn     15.5     12.8      20.8%                  15.5     12.8      20.8% 
-----------------         -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 

In the six months ended 30 September 2019, reported revenue in Nigeria increased by 23.2%, broadly in line with constant currency growth as a result of a stable foreign exchange environment.

Revenue in constant currency was up 23.1%, largely driven by voice revenue growth of 13.1% and sustained growth in data with revenue up 75.7%.

Voice revenue growth of 13.1% was mainly driven by double-digit growth in customer base. Customer growth resulted from the efficient sales and distribution system and expansion of network infrastructure.

Data revenue was up 75.7% and it remained the largest contributor to revenue growth. Data revenue growth was driven by accelerated rollout of our 4G network, with 62% of the sites being 4G, an increase in data customer base by 20.8% and ARPU growth of 43.0%. During the period 4G data usage increased by almost 20 times. Data revenue now accounts for 31% of Airtel Nigeria revenue, compared to 22% in the prior year. The solid expansion of the 4G network is a pillar of strong growth in Nigeria.

Underlying EBITDA margin in constant currency increased by 574bps as a result of revenue growth and operating efficiencies across various cost items. The increase in network expenses, resulting from the expansion of network infrastructure was more than compensated by data and voice revenue growth.

During the period, capital expenditure almost doubled, to $ 115 Mn, as the business continued to expand and invest in the network infrastructure, largely 4G, as the number of 4G sites increased 2.4x.

Operating Free Cash Flow was $ 226 Mn, up 11.6%, largely as a result of double-digit underlying EBITDA growth partially offset by an increase in capital expenditures.

Airtel Nigeria received "Brand of the year and most customer-centric brand" award in Jun 2019 from "Marketing Edge Magazine.

East Africa

 
   Description      UoM                Half Year ended                            Quarter ended 
-----------------  -----  ----------------------------------------  ---------------------------------------- 
                           Sep-19   Sep-18   Reported    Constant    Sep-19   Sep-18   Reported    Constant 
                                              Currency    Currency                      Currency    Currency 
                                               Change      Change                        Change      Change 
                                                 %           %                             %           % 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Summarized 
  Statement 
  of Operations 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
 Revenue (1)         Mn     578      546       5.8%        11.1%      301      281       7.5%        12.5% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
  Voice Revenue      Mn     296      299      (0.9%)       4.6%       155      156      (0.8%)       4.3% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
  Data Revenue       Mn     144      132       8.6%        13.8%       74       67       10.0%       14.9% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Mobile Money       $ 
   Revenue(2)        Mn      99       66       48.8%       53.9%       53       34       54.0%       58.7% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
  Other Revenue      Mn      66       61       7.6%        12.4%       34       31       7.6%        12.1% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Underlying          $ 
  EBITDA             Mn     233      211       10.3%       16.2%      123      111       10.6%       16.2% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Underlying                                    164         179                           117         128 
   EBITDA Margin     %     40.3%    38.7%       bps         bps      40.7%    39.5%       bps         bps 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Depreciation        $ 
  & Amortisation     Mn    (117)    (111)      5.5%        10.8%      (58)     (51)      13.3%       18.4% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Exceptional         $ 
  Item               Mn     (5)      (1)      345.2%      369.1%      (2)       -        0.0%        0.0% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating           $ 
  Profit             Mn     116      100       15.5%       22.1%       65       60       8.3%        14.1% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
 Capex               Mn      60       74      (19.0%)     (19.0%)      30       53      (43.1%)     (43.1%) 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating 
  Free Cash          $ 
  Flow               Mn     173      138       26.0%       36.1%       93       58       59.6%       73.3% 
-----------------         -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating 
  KPIs 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 ARPU                $      2.2      2.3      (2.1%)       2.8%       2.3      2.3      (0.5%)       4.2% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Total Customer 
  base               Mn     45.0     41.3      9.1%                   45.0     41.3      9.1% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Data Customer 
  base               Mn     12.1     10.3      18.4%                  12.1     10.3      18.4% 
-----------------         -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 

(1) Breakup of revenue as stated in above table will not add up to total revenue, since it also includes eliminations. (2) Mobile Money revenue post intersegment eliminations is $ 73 Mn for Half year ended Sep'19 and $ 54 Mn for Half year ended Sep'18, $ 40 Mn for Q2'20 and $ 26 Mn for Q2'19.

In the first six months ended 30 September 2019, reported revenue in East Africa increased by 5.8%, as constant currency growth of 11.1%, was partially offset by currency devaluation in Zambia and Malawi. Revenue growth of 11.1% in constant currency was driven by growth across all services.

In the East Africa region, Kenya, Tanzania, Malawi and Zambia recorded double-digit revenue growth in constant currency.

Voice revenue was up 4.6%, largely driven by customer growth of 9.1% and an increased usage per customer of 12.0%.

Data revenue increased by 13.8%, driven by the increase in data customer base, up 18.4% and an increase in data usage per customer, up 56.5%. The growth in data revenue was driven by the rollout and expansion of 4G network. Smartphone penetration was up 5% and there was a continued higher adoption of the "more for more" data bundle offering, supporting the overall data usage and revenue growth. Data revenue accounted for 25% of total revenue in East Africa.

Mobile money revenue increased by 53.9%, due to the increase in customer base by 19.1% and transaction value per customer increased by 19%. We continued to expand the Mobile Money distribution network (Agents, Kiosks and Airtel Money Branches).

Underlying EBITDA margin in constant currency increased by 179 bps as a result of revenue growth and cost efficiencies.

During the period, capital expenditure was slightly lower as a large part of the network modernization in East Africa was completed in the previous year. As a result of lower capex and higher underlying EBITDA, operating free cash flow amounted to $ 173 Mn, up 26.0%.

Rest of Africa

 
   Description      UoM                Half Year ended                            Quarter ended 
-----------------  -----  ----------------------------------------  ---------------------------------------- 
                           Sep-19   Sep-18   Reported    Constant    Sep-19   Sep-18   Reported    Constant 
                                              Currency    Currency                      Currency    Currency 
                                               Change      Change                        Change      Change 
                                                 %           %                             %           % 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Summarized 
  Statement 
  of Operations 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
 Revenue (1)         Mn     426      455      (6.5%)      (2.9%)      217      229      (4.9%)      (1.9%) 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
  Voice Revenue      Mn     265      309      (14.2%)     (10.8%)     133      154      (13.6%)     (10.7%) 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
  Data Revenue       Mn      91       77       17.9%       21.9%       48       40       19.0%       22.4% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Mobile Money       $ 
   Revenue(2)        Mn      44       34       28.5%       33.1%       23       18       32.5%       36.1% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
  Other Revenue      Mn      42       44      (4.6%)      (1.3%)       22       22       0.4%        3.3% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Underlying          $ 
  EBITDA             Mn     140      176      (20.3%)     (17.7%)      76       90      (16.1%)     (13.8%) 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Underlying 
   EBITDA Margin     %     32.9%    38.6%    (570)bps    (590)bps    34.9%    39.6%    (465)bps    (481)bps 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Depreciation        $ 
  & Amortisation     Mn     (93)     (95)     (2.3%)       1.2%       (47)     (37)      25.9%       29.6% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Exceptional         $ 
  Item               Mn     (10)     (1)      1520.2%     1609.5%     (5)      (0) 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating           $ 
  Profit             Mn      47       81      (41.7%)     (40.2%)      29       53      (46.0%)     (44.7%) 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
 Capex               Mn      69       36       91.1%       91.1%       54       22      145.7%      145.7% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating 
  Free Cash          $ 
  Flow               Mn      71      140      (48.9%)     (46.4%)      22       68      (68.5%)     (66.3%) 
-----------------         -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating 
  KPIs 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 ARPU                $      3.7      4.1      (9.0%)      (5.6%)      3.8      4.1      (8.3%)      (5.4%) 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Total Customer 
  base               Mn     19.4     18.6      3.8%                   19.4     18.6      3.8% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Data Customer 
  base               Mn     4.3      4.1       6.1%                   4.3      4.1       6.1% 
-----------------         -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 

(1) Breakup of revenue as stated in above table will not add up to total revenue, since it also includes eliminations. (2) Mobile Money revenue post intersegment eliminations is $ 28 Mn for Half year ended Sep'19 and $ 25 Mn for Half year ended Sep'18, $ 15 Mn for Q2'20 and $ 13 Mn for Q2'19

Performance in Rest of Africa improved in the second quarter as a result of improved performance in data and mobile money. Nevertheless, Rest of Africa continued to be impacted by macro-economic weakness in some of the countries in the region.

Revenue decreased by 2.9%, as growth in data, mobile money and other revenue did not offset a decline in voice revenue.

Voice revenue decreased by 10.8%, due in large part by the impact of a reduction in interconnect usage charges in Niger, Madagascar and Chad and overall market weakness in some of the countries in the segment.

Data delivered a growth of 21.9% largely driven by increased data usage with 4G launches in Republic of the Congo, Democratic Republic of Congo and Niger. In addition, the first phase of network modernization has been completed in the Democratic Republic of Congo. In Rest of Africa segment, 1,400+ additional sites were rolled out on 4G network, which accounted for almost half of the total sites. More than 7,400 broadband base stations were rolled out during the period.

Mobile money revenue increased by 33.1% with all key markets delivering double digit growth, supported by mobile money customer base growth of 24.6% and expansion of distribution network.

Underlying EBITDA margin in constant currency decreased by 590 bps as a result of lower revenue and a one-off quality of services charge in Gabon in the first quarter.

Capital expenditure almost doubled during the reporting period to $ 69 Mn as the business continued to invest in network modernization, the rollout of 4G network, with the number of 4G sites increasing by more than threefold.

Mobile Services:

 
   Description      UoM                Half Year ended                            Quarter ended 
-----------------  -----  ----------------------------------------  ---------------------------------------- 
                           Sep-19   Sep-18   Reported    Constant    Sep-19   Sep-18   Reported    Constant 
                                              Currency    Currency                      Currency    Currency 
                                               Change      Change                        Change      Change 
                                                 %           %                             %           % 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Summarized 
  Statement 
  of Operations 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
 Revenue(1)          Mn    1,540    1,435      7.3%        10.2%      790      730       8.1%        10.8% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Underlying          $ 
  EBITDA             Mn     644      597       7.8%        10.5%      335      310       8.0%        10.5% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Underlying 
   EBITDA Margin     %     41.8%    41.6%     21 bps      12 bps     42.4%    42.4%     (5)bps      (11)bps 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Depreciation        $ 
  & Amortization     Mn    (297)    (282)      5.1%        8.4%      (149)    (125)      19.1%       22.3% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating 
  Exceptional        $ 
  Items              Mn      18       27      (32.8%)     (32.2%)      9        12      (23.2%)     (22.7%) 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating           $ 
  Profit             Mn     347      315       10.1%       12.3%      186      185       0.4%        2.4% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
 Capex               Mn     241      150       60.8%       60.8%      145      102       43.0%       43.0% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating 
  Free Cash          $ 
  Flow               Mn     403      447      (9.9%)      (6.7%)      189      208      (9.1%)      (5.7%) 
-----------------         -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating 
  KPIs 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Mobile voice 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
  Voice revenue      Mn     956      953       0.4%        3.2%       487      483       0.6%        3.2% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Customer base      Mn    103.9     94.1      10.4%                 103.9     94.1      10.4% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Voice ARPU         $      1.6      1.7      (8.6%)      (6.0%)      1.6      1.7      (8.4%)      (6.1%) 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Mobile data 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                     $ 
  Data revenue       Mn     434      323       34.4%       37.8%      226      166       36.5%       39.6% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Data customer 
   base              Mn     31.9     27.1      17.7%                  31.9     27.1      17.7% 
-----------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Data ARPU          $      2.4      2.1       15.6%       18.5%      2.4      2.1       17.2%       19.9% 
-----------------         -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 

(1) Mobile service revenue post intersegment eliminations is $ 1,534 Mn for Half year ended Sep'19 and $ 1,430 Mn for Half year ended Sep'18, $ 786 Mn for Q2'20 and $ 727 Mn for Q2'19.

Voice

Voice Revenue in constant currency grew by 3.2% largely driven by customer growth of 10.4%, as a result of stable churn and the expansion of sales and distribution network and expansion of network infrastructure.

Voice ARPU decreased by 6.0% in constant currency terms, largely driven by a weakness in Rest of Africa and decrease in interconnect usage charges across key markets in East Africa and Rest of Africa.

Data

Data Revenue was up by 37.8% in constant currency, largely driven by data customer growth of 17.7% and higher data usage per customer, up 55.7%. Data customer growth led by increase in smartphone penetration by 3%, accelerated roll out of 4G network, with 58% of the sites being 4G and more than 13,800 broadband base stations added. More than 30.7% of total customer base are data users, increased from 28.8% in previous period.

During the period, overall data usage increased by 81.1% supported by the investments in growth the strength and reliability of our 4G network (more than 7,300 additional sites now on 4G) and higher adoption of simplified "more for more" data bundles resulting in data ARPU growth of 18.5%. Data accounted for 26.4% of total revenue, up from 21.3% in the prior period.

Mobile Money

 
    Description       UoM                Half Year ended                            Quarter ended 
-------------------  -----  ----------------------------------------  ---------------------------------------- 
                             Sep-19   Sep-18   Reported    Constant    Sep-19   Sep-18   Reported    Constant 
                                                Currency    Currency                      Currency    Currency 
                                                 Change      Change                        Change      Change 
                                                   %           %                             %           % 
-------------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Summarized 
  Statement 
  of Operations 
-------------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                       $ 
 Revenue(1)            Mn     146      103       41.8%       46.5%       78       53       46.7%       50.9% 
-------------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Underlying            $ 
  EBITDA               Mn      70       37       91.3%       95.1%       38       20       84.5%       87.6% 
-------------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Underlying                                     1247        1198                           989         942 
   EBITDA Margin       %     48.2%    35.7%       bps         bps      48.2%    38.3%       bps         bps 
-------------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Depreciation          $ 
  & Amortization       Mn     (3)      (3)       2.6%        3.3%       (1)      (1)       12.2%       13.8% 
-------------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating             $ 
  Profit               Mn      67       34       98.2%      102.4%       37       19       88.4%       91.5% 
-------------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
                       $ 
 Capex                 Mn      3        4       (12.5%)     (12.5%)      2        3       (52.3%)     (52.3%) 
-------------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating 
  Free Cash            $ 
  Flow                 Mn      67       33      102.7%      107.1%       36       17      109.7%      113.5% 
-------------------         -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Operating 
  KPIs 
-------------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 Mobile Money 
  Key KPIs 
-------------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Transaction          $ 
   value               Mn    14,968   12,088     23.8%       29.4%     7,856    6,092      29.0%       34.6% 
-------------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Active customers     Mn     15.5     12.9      19.9%                  15.5     12.9      19.9% 
-------------------  -----  -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
  Mobile Money 
   ARPU                $      1.6      1.4       18.4%       22.4%      1.7      1.4       25.0%       28.6% 
-------------------         -------  -------  ----------  ----------  -------  -------  ----------  ---------- 
 

(1) Mobile Money revenue post intersegment eliminations is $ 104 Mn for Half year ended Sep'19 and $ 82 Mn for Half year ended Sep'18, $ 56 Mn for Q2'20 and $ 40 Mn for Q2'19

Mobile money revenue grew by 46.5% in constant currency, driven by customer growth and growth in transaction value. Growth of customer base was largely driven by the expansion of the distribution network, as the business invested in more exclusive kiosks and mobile money branches, up 32% and 141% respectively compared to last year.

Furthermore, the expansion of the merchant ecosystem and the provision of more affordable tariffs further contributed to transaction value growth.

Underlying EBITDA in mobile money increased by 91.3%, amounting to $ 70.0 Mn, driven by revenue growth and supported by efficient distribution cost structure, resulting into better flow through in EBITDA. As a result, underlying EBITDA margin improved to 48.2%, up from 35.7%.

Transaction value increased by 29.4% in constant currency, with an annualized value of more than $ 30 billion driven by the expansion of its distribution infrastructure.

Mobile money active customer base at 15.5 Mn, up 19.9% on the previous year with the mobile money customer base currently representing 15% of the total base.

ARPU in mobile money increased 22.4% driven by subscriber growth and higher contribution from P2P and merchant payments.

Forward looking statements

This document contains certain forward-looking statements including "forward-looking" statements made within the meaning of Section 21E of the United States Securities Exchange Act of 1934, 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$ rounded to the nearest millions. Therefore, discrepancies in the tables between totals and the sums of the amounts listed may occur due to such rounding.

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 telecommunications solutions to its subscribers, including mobile voice and data services as well as mobile money services both nationally and internationally. The Group aims to continue providing a simple and intuitive customer experience through streamlined customer journeys.

For further information:

Airtel Africa Investor Relations

E-mail address: investor.relations@africa.airtel.com

Telephone number: +44 207 493 9315

Website: https://airtel.africa/investors

Conference call

The management team will host an analyst and investor conference call at 9:30 AM UK time, on Friday 25 October 2019, including a Question and Answer session.

In order to participate in the event, please use the following options to access via:

   1)    Conference call, please follow the instructions: 

In the 10 minutes prior to the start, call the appropriate participant dial-in number:

   --      Standard International: +44 (0) 2071 928000 
   --      United Kingdom Freephone: 08003767922 
   --      United Kingdom Local Call: 08445718892 
   --      United States: 18669661396 
   --      United States, New York 16315107495 
   --      Nigeria, Lagos: 12278975 
   --      Nigeria, Lagos: 12278750 
   --      India: 18002666102 
   --      South Africa, Johannesburg: 0105007996 
   --      France: 0805103028 

Provide the operator with the conference ID 8396762

   2)    Webcast 

click on the link URL: https://edge.media-server.com/mmc/p/biu3u6oi

Interim Condensed Consolidated Financial Statements

Consolidated Statement of Comprehensive Income

(All amounts are in US Dollar millions; unless stated otherwise)

 
                                                                                    For six months ended 
                                                               ---------  ---------------------------------------- 
                                                                Notes      September 30, 2019   September 30, 2018 
                                                               ---------  -------------------  ------------------- 
      Income 
      Revenue                                                          5                1,640                1,513 
      Other income                                                                         11                   17 
                                                               ---------  ------------------- 
                                                                                        1,651                1,530 
 
      Expenses 
      Network operating expenses                                                          297                  273 
      Access charges                                                                      184                  171 
      License fee / spectrum charges (revenue share)                                       94                   92 
      Employee benefits expense                                                           111                  118 
      Sales and marketing expenses                                                         83                   76 
      Impairment loss on financial assets                                                   2                   16 
      Other expenses                                                                      166                  142 
      Depreciation and amortisation                                                       319                  278 
                                                                                        1,256                1,166 
 
      Operating profit                                                                    395                  364 
 
      Finance costs                                                                       209                  226 
      Finance income                                                                     (60)                  (8) 
      Non-operating income                                                               (70)                    - 
      Share of loss / profit of joint ventures and associate                              (0)                   24 
      Profit before tax                                                                   316                  122 
 
      Tax expense / (credit)                                           6                   88                 (82) 
      Profit for the period                                                               228                  204 
 
      Profit before tax (as presented above)                                              316                  122 
      Add: Exceptional items (net)                                     7                 (46)                   30 
      Underlying profit before tax                                                        270                  152 
-------------------------------------------------------------  ---------  -------------------  ------------------- 
 
      Profit after tax (as presented above)                                               228                  204 
      Add: Exceptional items (net)                                     7                 (74)                (117) 
      Underlying profit after tax                                                         154                   87 
-------------------------------------------------------------  ---------  -------------------  ------------------- 
 
 
                                                                                        For six months ended 
                                                                   ---------  ---------------------------------------- 
                                                                    Notes      September 30, 2019   September 30, 2018 
                                                                   ---------  -------------------  ------------------- 
 
  Profit for the period (continued from previous page)                                        228                  204 
 
  Other comprehensive income ('OCI') 
  Items to be reclassified subsequently to profit or loss: 
       Net losses due to foreign currency translation differences                            (24)                (194) 
       Share of OCI of associate                                                                -                    0 
       Net gain on net investments hedge                                                        7                   28 
       Net loss on cash flow hedge                                                            (3)                 (10) 
  Other comprehensive loss for the period                                                    (20)                (176) 
 
  Total comprehensive income for the period                                                   208                   28 
                                                                   =========  ===================  =================== 
 
  Profit for the period attributable to:                                                      228                  204 
 
       Owners of the Company                                                                  215                  181 
       Non-controlling interests                                                               13                   23 
                                                                   ---------  -------------------  ------------------- 
 
  Other comprehensive loss for the period attributable to:                                   (20)                (176) 
 
       Owners of the Company                                                                 (20)                (173) 
       Non-controlling interests                                                              (0)                  (3) 
                                                                   ---------  -------------------  ------------------- 
 
  Total comprehensive income for the period attributable to:                                  208                   28 
 
       Owners of the Company                                                                  195                    8 
       Non-controlling interests                                                               13                   20 
                                                                   ---------  -------------------  ------------------- 
 
 Earnings per share (In USD) 
       Basic                                                               8                 0.06                 0.16 
       Diluted                                                             8                 0.06                 0.16 
                                                                   ---------  -------------------  ------------------- 
 

Consolidated Statement of Financial Position

(All amounts are in US Dollar millions; unless stated otherwise)

 
                                                                       As of 
                                                       ------------------------------------ 
                                                Notes   September 30, 2019   March 31, 2019 
                                               ------  -------------------  --------------- 
 Assets 
 
   Non-current assets 
         Property, plant and equipment             9                 1,658            1,597 
         Capital work-in-progress                  9                   314              365 
         Right of use assets                                           638              655 
         Goodwill                                                    4,099            4,126 
         Other intangible assets                                       381              349 
         Intangible assets under development                            31               70 
         Investment in associate                                         4                3 
         Financial assets 
           - Investments                                                 0                0 
           - Derivative instruments                                      0               45 
           - Security deposits                                           7                9 
           - Others                                                      1                - 
         Income tax assets (net)                                        35               31 
         Deferred tax assets (net)                                     319              346 
         Other non-current assets                                      104               89 
                                                       -------------------  --------------- 
                                                                     7,591            7,685 
 
   Current assets 
         Inventories                                                     3                3 
         Financial assets 
           - Derivative instruments                                      3                5 
           - Trade receivables                                         131              121 
           - Cash and cash equivalents                               1,469              848 
           - Other bank balances                                       277              259 
           - Others                                                     66               73 
           Other current assets                                        108              118 
                                                                     2,057            1,427 
 
  Total assets                                                       9,648            9,112 
                                                       ===================  =============== 
 
 
                                                                                         As of 
                                                                         ------------------------------------ 
                                                           Notes          September 30, 2019   March 31, 2019 
                                                          -------------  -------------------  --------------- 
 
  Equity and Liabilities 
   Equity 
           Share capital                                             11                3,420            3,082 
           Other equity                                                                  136            (455) 
                                                                         -------------------  --------------- 
   Equity attributable to owners of the Parent                                         3,556            2,627 
         Non-controlling interests                                                     (171)            (195) 
                                                                                       3,385            2,432 
 
   Non-current liabilities 
         Financial liabilities 
           - Borrowings                                              12                2,700            2,437 
           - Lease liabilities                                                           996            1,037 
           - Derivative instruments                                                        1                7 
           - Others                                                                        2                7 
         Deferred revenue                                                                 32               34 
         Provisions                                                                       24               20 
         Deferred tax liabilities (net)                                                   27               33 
                                                                         -------------------  --------------- 
                                                                                       3,782            3,575 
 
   Current liabilities 
         Financial liabilities 
           - Borrowings                                              12                  284              625 
           - Current maturities of long-term borrowings              12                  513              559 
           - Lease liabilities                                                           192              181 
           - Derivative instruments                                                       39               96 
           - Trade payables                                                              705              712 
           - Others                                                                      389              604 
         Provisions                                                                        5                - 
         Deferred revenue                                                                123              121 
         Current tax liabilities (net)                                                    73               67 
         Other current liabilities                                                       158              140 
                                                                         -------------------  --------------- 
                                                                                       2,481            3,105 
 
  Total liabilities                                                                    6,263            6,680 
 
  Total equity and liabilities                                                         9,648            9,112 
                                                                         ===================  =============== 
 

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

Consolidated Statement of Changes in Equity (All amounts are in US Dollar millions; unless stated otherwise)

 
                                                                                                   Equity attributable to owners of the Company                                                                                  Non-controlling        Total 
                                                                                                                                                                                                                                    interests           equity 
                    --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 
                                  Share capital                                                                                Other equity 
                    ----------------------------------------  ---------------------------------------------------------------------------------------------------------------------------------------------  ---------------- 
                                                                                                                Reserves and surplus                                                    Other components of        Total 
                                                                                                                                                                                              equity 
                    --------------------------                -----------------------------------------------------------------------------------------------------------------------  --------------------  ---------------- 
                           No of shares            Amount          Share        Retained earnings    Shared-based payment reserve      Transactions with NCI        Other reserves 
                                                                  premium                                                                     reserve 
                    --------------------------  ------------  --------------  --------------------  -----------------------------  ----------------------------  --------------------  --------------------  ---------------- 
  As of April 1, 
   2018                          1,781,248,325         2,359           2,551               (3,510)                              -                         (500)                     -               (1,903)           (1,003)               (231)         (1,234) 
  Profit for the 
   period                                    -             -               -                   181                              -                             -                     -                     -               181                  23             204 
  Other 
   comprehensive 
   loss                                      -             -               -                     -                              -                             -                     -                 (173)             (173)                 (3)           (176) 
                    --------------------------  ------------  --------------  --------------------  -----------------------------  ----------------------------  --------------------  --------------------                    ------------------  -------------- 
  Total 
   comprehensive 
   income / (loss)                           -             -               -                   181                              -                             -                     -                 (173)                 8                  20              28 
  Transaction with 
  owners of equity 
  Shareholder loan 
   conversion                                1             0           1,107                     -                              -                             -                     -                     -             1,107                   -           1,107 
  Common control 
   transactions                              -             -               -                    98                              -                             -                     -                     -                98                   -              98 
  Dividend 
   (including tax) 
   to NCI                                    -             -               -                     -                              -                             -                     -                     -                 -                 (4)             (4) 
  Transaction with 
   NCI                                       -             -               -                     -                              -                          (80)                     -                     -              (80)                   6            (74) 
  As of September 
   30, 2018                      1,781,248,326         2,359           3,658               (3,231)                              -                         (580)                     -               (2,076)               130               (209)            (79) 
                    ==========================  ============  ==============  ====================  =============================  ============================  ====================  ====================  ================  ==================  ============== 
  Profit for the 
   period                                    -             -               -                   207                              -                             -                     -                     -               207                  15             222 
  Other 
   comprehensive 
   income                                    -             -               -                     -                              -                             -                     -                    40                40                   -              40 
                    --------------------------  ------------  --------------  --------------------  -----------------------------  ----------------------------  --------------------  --------------------  ----------------  ------------------  -------------- 
  Total 
   comprehensive 
   income                                    -             -               -                   207                              -                             -                     -                    40               247                  15             262 
  Transaction with 
  owners of equity 
  Re-organization 
   adjustment                    (613,490,706)       (1,191)         (3,658)                 4,850                              -                             -                     -                     -                 -                   -               - 
  Issue of share 
   capital                       1,913,986,957         1,914             473                 (136)                              -                             -                     -                     -             2,251                   -           2,251 
  Share issue 
   costs                                     -             -             (2)                     -                              -                             -                     -                     -               (2)                   -             (2) 
  Dividend 
   (including tax) 
   to NCI                                    -             -               -                     -                              -                             -                     -                     -                 -                 (1)             (1) 
                                                                                                                                   ---------------------------- 
  As of March 31, 
   2019                          3,081,744,577         3,082             471                 1,690                              -                         (580)                     -               (2,036)             2,626               (195)           2,432 
                    ==========================  ============  ==============  ====================  =============================  ============================  ====================  ====================  ================  ==================  ============== 
  Profit for the 
   period                                    -             -               -                   215                              -                             -                     -                     -               215                  13             228 
  Other 
   comprehensive 
   loss                                      -             -               -                     -                              -                             -                     -                  (20)              (20)                 (0)            (20) 
                    --------------------------  ------------  --------------  --------------------  -----------------------------  ----------------------------  --------------------  --------------------                    ------------------  -------------- 
  Total 
   comprehensive 
   income / (loss)                           -             -               -                   215                              -                             -                     -                  (20)               195                  13             208 
  Transaction with 
  owners of equity 
  Reduction in 
   nominal value 
   of shares [Note 
   11 (1)]                                   -       (1,541)               -                     -                              -                             -                     -                     -           (1,541)                   -         (1,541) 
  Issue of 
   deferred share 
   capital [Note 
   11 (1)]                       3,081,744,577         1,541               -                     -                              -                             -                     -                     -             1,541                   -           1,541 
  Issue of 
   redeemable 
   deferred share 
   capital [Note 
   11 (3)]                              50,000             0               -                     -                              -                             -                     -                     -                 0                   -               0 
  Issue of share 
   capital [Note 
   11 (2)]                         676,406,927           338             342                     -                              -                             -                     -                     -               680                   -             680 
  Issue of share 
   capital to NCI                            -             -               -                     -                              -                             -                     -                     -                 -                  13              13 
  Share issue 
   costs                                     -             -             (4)                  (13)                              -                             -                     -                     -              (17)                                (17) 
  Share 
   stabilisation 
   proceeds [Note 
   4 (d)]                                    -             -               -                     -                              -                             -                     7                     -                 7                   -               7 
  Employee 
   share-based 
   payment 
   expenses                                  -             -               -                     -                              0                             -                     -                     -                 0                   -               0 
  Reversal of 
   indemnities 
   [Note 4 (a)]                              -             -               -                    64                              -                             -                     -                     -                64                   -              64 
  Dividend 
   (including tax) 
   to NCI                                    -             -               -                     -                              -                             -                     -                     -                 -                 (2)             (2) 
                                                                                                                                                                 -------------------- 
  As of September 
   30, 2019                      6,839,946,081         3,420             809                 1,956                              0                         (580)                     7               (2,056)             3,556               (171)           3,385 
                    ==========================  ============  ==============  ====================  =============================  ============================  ====================  ====================  ================  ==================  ============== 
 

Statement of Cash Flows (All amounts are in US Dollar millions; unless stated otherwise)

 
                                                                                      For six months ended 
                                                                            ---------------------------------------- 
                                                                             September 30, 2019   September 30, 2018 
                                                                            -------------------  ------------------- 
 Cash flows from operating activities 
 Profit before tax                                                                          316                  122 
 Adjustments for - 
     Depreciation and amortisation                                                          319                  278 
     Finance income                                                                        (60)                  (8) 
     Finance cost                                                                           209                  226 
     Share of loss / profit of joint ventures and associate                                 (0)                   24 
     Non-operating adjustments                                                             (70)                    - 
     Other adjustments                                                                      (7)                   12 
 
 Operating cash flow before changes in working capital                                      707                  654 
 Changes in working capital 
     Increase in trade receivables                                                         (12)                 (14) 
     Increase / (decrease) in inventories                                                     0                  (0) 
     Decrease in trade payables                                                               4                 (53) 
     Increase / (decrease) in provisions                                                      2                  (3) 
     Decrease in other financial and non financial liabilities                              (9)                 (25) 
     Increase in other financial and non financial assets                                  (27)                 (63) 
     Decrease in deferred revenue                                                           (0)                  (6) 
 Net cash generated from operations before tax                                              665                  490 
     Income tax paid                                                                       (69)                 (63) 
 
 Net cash generated from operating activities (a)                                           596                  427 
                                                                            -------------------  ------------------- 
 
 Cash flows from investing activities 
     Purchase of property, plant and equipment and capital 
      work-in-progress                                                                    (349)                (273) 
     Purchase of intangible assets                                                         (35)                 (56) 
     Proceeds on sale of tower assets                                                         -                   41 
     Interest received                                                                       14                    8 
 Net cash used in investing activities (b)                                                (370)                (280) 
                                                                            -------------------  ------------------- 
 
 Cash flows from financing activities 
     Proceeds from issue of shares                                                          680                    - 
     Proceeds from issue of shares to NCI                                                     3                    - 
     Acquisition of non- controlling interest                                                 -                 (74) 
     Payment of share issue expenses                                                       (16)                    - 
     Proceeds from borrowings                                                               144                  238 
     Repayment of borrowings                                                              (319)                (182) 
     Proceeds from sale and lease back of towers                                              -                   22 
     Repayment of lease liabilities                                                        (89)                 (81) 
     Dividend paid to non-controlling interests                                               -                  (4) 
     Interest and other finance charges paid                                              (176)                (178) 
     Proceeds from borrowings from related parties                                            -                  337 
     Share stabilisation proceeds                                                             7                    - 
     Proceeds from sale of derivatives                                                      122                    - 
 Net cash generated from financing activities (c)                                           356                   78 
                                                                            -------------------  ------------------- 
 
 Net increase in cash and cash equivalents during the period (a+b+c)                        582                  225 
 Effect of exchange rate on cash and cash equivalents                                         3                    2 
 
 Cash and cash equivalent as at beginning of the period                                     632                   56 
 Cash and cash equivalents as at end of the period (Note 10)                              1,217                  283 
                                                                            ===================  =================== 
 

Notes to Interim Condensed Consolidated Financial Statements

(All amounts are in US Dollar millions; unless stated otherwise)

   1.     Corporate information 

Airtel Africa Limited was incorporated as a private company limited by shares on July 12, 2018 as a subsidiary of Airtel Africa Mauritius Limited ('the Parent'), a company registered in Mauritius. It was subsequently re registered as Airtel Africa plc ('the Company') on June 13, 2019. The Company is incorporated and domiciled in England and Wales (registration number 11462215). The registered address of the Company is First Floor, 53/54 Grosvenor Street, London, W1K 3HU, United Kingdom.

The Company listed on London Stock Exchange ('LSE') on July 3, 2019 and on Nigerian Stock Exchange ('NSE') on July 9, 2019.

The Company, together with its subsidiary undertakings (hereinafter referred to as 'the Group') has operations in Africa. The principal activities of the Group and its associate consist of provision of telecommunication services and mobile money services.

   2.     Basis of preparation 

These interim condensed consolidated financial statements ('financial statements') have been prepared to comply in all material respects with the International Financial Reporting Standards ('IFRS') as adopted by the European Union ('EU') and the disclosure requirements of the Listing Rules. These financial statements are unaudited.

These financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting'. Accordingly, the financial statements do not include all the information required for a complete set of financial statements, and should be read in conjunction with the Group's Historical Financial Information for the year ended March 31, 2019 included as part of the Airtel Africa prospectus published during the Company's listing process. Further, selected explanatory notes have been included to explain events and transactions that are significant for the understanding of the changes in the Group's financial position and performance since the latest annual consolidated financial statements.

These financial statements for the six months ended September 30, 2019 and financial year ended March 31, 2019 do not constitute statutory accounts as defined in section 434 of the U.K. Companies Act 2006. For the year ended March 31, 2019, the Group took the exemption available under the UK Companies Act from preparing consolidated statutory financial statements, as it was included in the group accounts of Bharti Airtel Limited. The Bharti Airtel Limited group financial statements are publically available and can be obtained at www.airtel.com. The comparative information included within these interim financial statements was separately prepared for the Board of Directors. This comparative financial information will also be included in the financial statements for the year ended March 31, 2020.

The financial statements of the Group for the six months ended September 30, 2019 were authorised by the Board of Directors on October 24, 2019.

These financial statements apply the same accounting policies, presentation and methods of calculation as those followed in the preparation of the Group's Historical Financial Information for the year ended March 31, 2019. Further, there have been no changes in critical accounting estimates, assumptions and judgements other than the following change in judgement:

-- Airtel Congo (RDC) S.A. (a subsidiary of the Company in DRC) has carried forward tax losses and timing differences on which deferred tax was not recognised in the past. Considering DRC has been in continuous and cumulative profits and on the basis of the likely timing and the level of future taxable profits, the Group has determined that it is now probable that taxable profits will be available against which the tax losses and temporary differences can be utilised in the foreseeable future. Consequently, a deferred tax asset of USD 27 was recognised during the six months ended September 30, 2019. For remaining loss making subsidiaries, the criteria to recognise a deferred tax asset was not met.

   3.     Basis of measurement 

The financial statements have been prepared under the historical cost convention and are presented in United States Dollars (USD), with all values stated in USD Mn and rounded to the nearest millions except when otherwise indicated. Further, amounts which are less than a million are appearing as '0'.

3.1 Working capital and Going Concern

The Group has USD 2.7 Bn of intermediate parent guaranteed Bonds ("the Notes"). In May 2019 and ahead of IPO, the Group executed a bank facility agreement (the 'New Airtel Africa Facility') in a principal amount of up to USD 2 Bn which was available to draw down for a period of six months. In addition certain of the Group's subsidiaries arranged for USD 425 other committed facilities. The Group expressed an intention at IPO to refinance the Notes through various suitable means including the draw down on the facilities by December 2019 to the extent that the Notes had not been refinanced or unless alternate committed liquidity have been put in place.

Following successful completion of the IPO and receipt of USD 680 of IPO proceeds, in October 2019 the Group further reassessed the requirement for the New Airtel Africa Facility amounting to USD 1.2 Bn (USD 0.8 Bn already having been cancelled post IPO) and having considered business performance, free cash flows, liquidity expectation for the next 12 months together with its other existing drawn and undrawn facilities, the Group cancelled the remaining USD 1.2 Bn New Airtel Africa Facility. As part of this evaluation the Group has considered its future working capital requirements and has to date secured letters of intent and term sheets including underwrites for Debt Capital Market issuances from several institutions totalling USD 1.5 Bn, subject to customary terms and conditions. In the Group's assessment these, once executed, along with existing cash and facilities will provide an option to the Group to refinance the Notes should it choose to do so.

On October 24, 2019, The Honourable Supreme Court of India delivered an adverse court judgement in India on the Group's intermediate parent in relation to a long outstanding industry wide case ("the Court Judgement"). The overall financial impact arising out of the Court Judgement, is still being assessed by the intermediate parent company but this could result in USD 505 of the Group's Notes requiring to be prepaid on a voluntary basis to avoid loan incurrence covenants on those Notes coming into force. If required, this prepayment can be made from the Group's existing facilities with no adverse impact to the Group's operations or going concern.

As part of its assessment of going concern, the Directors have taken into account all factors likely to affect its future performance and financial position, including the Group's cash flows under both base and a number of reasonable worst case scenarios, solvency and liquidity positions, and borrowing facilities and all the risks and uncertainties relating to its business activities. The Group has also considered whether any events are likely to arise that would result in an early repayment requirement of the balance of the Notes and has assessed any material restrictions that may be imposed on it consequent to the actions / inactions of its intermediate parent company. The Group will continue to assess this risk as the impact of the Court Judgement becomes clearer and has considered whether this could give rise to the early repayment of the balance of the remaining USD 2.2 Bn of Notes. This represents a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern. However the Group has cash and facilities together with a number of financing options as detailed above and other operational mitigation measures available to it should they be required and has concluded that despite the risks associated with the Court Judgement against the intermediate parent and its impact on the Notes, the Group will be able to continue as a going concern.

   4.     Significant transactions / new developments 

a) Under a deed dated May 28, 2019 between the Company, Airtel Africa Mauritius Limited ('AAML' / the 'parent') and the several global investors, the terms of minority adjustments were varied such that the obligation existing until such date were assumed by the parent of the Company. Consequently, these minority adjustment liabilities have been reversed through equity.

Further, other indemnity adjustments expired on the publication of the registration document of the Company on May 28, 2019 in accordance with the original Share Subscription Agreement between the Company and the global investors and hence these were recorded as non-operating income in the statement of comprehensive income.

b) As outlined in the Company's prospectus dated June 17, 2019 and pursuant to a resolution of the Company passed on May 24, 2019, the Company has completed a reduction of its share capital by cancelling and extinguishing 50,000 redeemable deferred shares and reducing the amount standing to the credit of the share premium account of the Company to zero. The capital reduction was formally approved by the High Court in London and registered with the Registrar of Companies on October 22, 2019. Consequently GBP 50,000 will be repaid to the holder of the redeemable deferred shares.

c) During the six months ended September 30, 2019 the Government of Tanzania ('GoT'), Bharti Airtel Tanzania B.V. ('BATBV') and Airtel Tanzania ('AT') executed agreements to resolve all disputes. These mainly cover the following: (i) New shares to be issued by AT to the GoT at no cost such that the GoT will own 49 per cent of the entire share capital of AT and BATBV will own 51 per cent; (ii) Tanzania Revenue Authority's (TRA) tax claim of approximately USD 874 on Bharti Airtel International (Netherlands) B.V. ('BAIN') will be treated as settled without any liability; (iii) Tanzania Communications Regulatory Authority's Compliance Decision of April 20, 2018 imposing on AT a fine of approximately USD 183 too will be treated as settled without any liability; (iv) TRA's various tax claims against AT of approximately USD 47 will; subject to verification and consideration of the records, be treated as settled without any liability; (v) AT will be issued a one-time tax clearance certificate in regard to tax disputes in respect of all historical tax claims up to December 31, 2018; (vi) In all cases this shall not be construed as an admission of fact or law or as a concession or admission of any wrongdoing, obligation, liability by any party; (vii) AT, subject to verification and consideration of the records by the TRA will be allowed the carry-forward tax loss balance as recorded in AT's corporate tax return for the tax year ended December 31, 2017; (viii) Parties will co-operate to effect the sale of towers and the proceeds thereof will be distributed in a pre-defined manner towards repayment of AT's shareholder loan, to be retained in AT and balance as a special one-time pay-out to the GoT. On receipt of its share of the proceeds from sale of towers, BATBV will waive the balance shareholder loan; (ix) A valid Listing Waiver will be provided to AT and the Group entities in AT in accordance with the laws of Tanzania. Furthermore, in case of listing, the BATBV shares in AT are not subject to listing; (x) Group entities will not be subject to any tax in connection with any of the transactions described above; and (xi) AT will pay to GOT, approximately USD 0.4 every month for a period of 60 months, effective April 1, 2019 for the support services provided. As at September 30, 2019, TRA's tax claim of approx. USD 874 has been vacated without any liability. The completion of all other steps set out above are still in progress at the date of authorisation of the financial statements.

d) As part of the IPO process, the Company through one of the underwriters, carried out share price stabilisation activities during a 30 day period after the IPO. Company's parent lent shares to the underwriter to facilitate these stabilisation activities. Such stabilization activities resulted in proceeds of USD 7 which being earned on Company's own shares has been recorded as 'Other reserves' within equity.

e) Airtel Gabon is involved in a dispute with a company, 2JTH, with respect to disputed invoices for services provided by 2JTH to Airtel Gabon under a service contract. Although the original order under the contract was issued by Airtel Gabon for a total amount of CFA 473,800,000 (approximately USD 1), in 2014 2JTH initiated arbitration claiming a sum of approximately CFA 1.9 billion (approximately USD 3.3), which was awarded by an arbitral tribunal. A lower court on the September 29, 2015 enforced the arbitral award and ordered certain of Airtel Gabon's banks to release the funds under a penalty of CFA 50 Mn per day (approximately USD 0.08). Airtel Gabon appealed to the Court of Appeal, which dismissed the appeal on June 15, 2016 and imposed an additional CFA 1 billion (approximately USD 1.7) as damages for abuse of court process. Airtel Gabon filed an appeal before the OHADA Common Court of Justice and Arbitration ('CCJA' in Abidjan), Ivory Coast, the highest commercial court of OHADA countries, which confirmed the arbitral award but quashed the rulings of September 2015 and June 2016, including the imposition of the daily penalty in November 2018. In mid- May 2019, a lower court in Gabon issued an order against Airtel Gabon reinstating the daily penalty imposed in 2015, for an amount of approximately CFA 35 billion (approximately USD 60). Airtel Gabon lodged an immediate appeal and stay of execution. On June 19, 2019, the Supreme Court granted a stay of execution. Airtel Gabon believes that the lower court order is without merit given the prior decision of CCJA. In July 2019 the Court of Appeal delivered a judgment, which was served on Airtel in August 2019, confirming the ordinance of mid - May 2019 condemning Airtel to pay the sum of CFA 35 billion (approximately USD 60) which was intended to be seized on the assets of Airtel Gabon. Airtel Gabon appealed to the Supreme Court and applied for a stay by challenging the merits of the Appeal Court ruling itself. The magistrate of the lower court who took the injunction and the presiding Judge of the court of appeal have both been removed from their respective positions by the President and a criminal complaint has been lodged by Airtel against 2JTH since June 2019 for fraud and extortion on the ground that 2JTH is using null and void decisions against banks to try to extort money from the company. In September 2019, the Supreme Court of Gabon issued a stay of execution against the ruling of the court of appeal of July 2019. With this stay of execution by the Supreme Court, 2JTH is not in position to pursue the seizure of Airtel Gabon's bank accounts. The next step is the proceeding before the OHADA regional court where Airtel Gabon will seek the annulment of the injunction of the mid-May 2019 and court of appeal ruling of July 2019.

f) On December 13, 2018, Authority for Regulations of Electronic Communication & Post (ARCEP) "the regulator" in Gabon sanctioned Airtel Gabon for provision of poor quality services on its network. In connection with such sanction, ARCEP has issued Quality of Service charges of approximately USD 14. Consequent to engagements between Airtel Gabon and the regulator, payment was suspended by the regulator until further notice. On May 27 2019, the regulator had issued a revised demand letter for USD 8.6. Airtel Gabon continued to engage with the regulator on this matter. The regulator through a letter dated July 3, 2019 (received on July 4 2019) informed that Airtel Gabon has to pay a final amount of USD 8.6 within 72 hours. Airtel Gabon through a letter dated July 8 2019 informed the regulator that the reduced penalty of USD 8.6 will be paid in instalments, first instalment of USD 3.4 will be paid in the 3rd week of July 2019, and other 2 instalments of USD 2.6 and USD 2.6 in August 2019 and September 2019 respectively. In response to Airtel Gabon's request, the regulator has provided onetime approval on this payment plan through their letter dated July 15 2019. Accordingly, the Company has paid the penalty of USD 8.6 in instalments during the quarter as per the approved plan from the regulator.

g) The proposed interim dividend of $ 3c per share was approved by the Board on 24 October 2019 and has not been included as a liability as at September 30, 2019.

   5.     Segmental Information 

In line with the new strategy and the re-organisation, the Group revised its organisational structure on the basis of geographical clusters (from erstwhile one Africa segment) in March 2019. Segment information is provided on the basis of geographical clusters to the Group's Chief Executive Officer (Chief Operating Decision Maker - 'CODM') for the purposes of resource allocation and assessment of performance. The reporting segments, which have been retrospectively applied for all the periods in the financial statements, are as follows:

Nigeria

East Africa: Comprising of operations in Kenya, Uganda, Rwanda, Tanzania, Malawi and Zambia

Rest of Africa: Comprising of operations in Niger, Gabon, T Chad, Congo, DRC, Madagascar and Seychelles

Each segment derives revenue from mobile services, mobile money and other services. Expenses, assets and liabilities primarily related to the corporate headquarters of the Group are presented as Unallocated Items.

The amounts reported to CODM are based on the accounting principles used in the preparation of the financial statements. Segmental performance is evaluated based on segment revenue and segment result.

Segment result is Underlying EBITDA i.e. earnings before interest, tax, depreciation and amortisation before exceptional items as adjusted for corporate social responsibility costs. This is the measure reported to the CODM for purposes of resource allocation and assessment of segment performance.

Inter-segment pricing and terms are reviewed and changed by the management to reflect changes in market conditions and changes to such terms are reflected in the period in which the changes occur.

Inter-segment revenues eliminated upon consolidation of segments are reflected in the 'Eliminations / Adjustments' column.

Segment assets and segment liabilities comprise those assets and liabilities directly managed by each segment. Segment assets primarily include receivables, property, plant and equipment, capital work in progress, right-to-use assets, intangibles assets, inventories, cash and cash equivalents. Segment liabilities primarily include operating liabilities. Segment capital expenditure comprises of investment in property, plant and equipment, capital work in progress, intangible assets (excluding licenses) and capital advances.

Summary of the segmental information for the six months ended and as of September 30, 2019 is as follows:

 
 
 Sep-19                                  Nigeria   East Africa   Rest of Africa   Unallocated   Eliminations   Total 
                                        --------  ------------  ---------------  ------------  -------------  ------ 
 
 Revenue from external customers 
  Mobile services                            636           503              395             -              -   1,534 
  Mobile money                                 3            73               28             -              -     104 
  Others                                       0             2                2             -              -       4 
                                             639           578              425           (2)              -   1,640 
 Inter-segment revenue                         1             0                1             -            (2)       - 
 Total revenue                               640           578              426           (2)            (2)   1,640 
 Segment results: Underlying EBITDA          341           233              140          (20)             25     719 
 
 Less: 
 Depreciation and amortisation 
  (excluding exceptional items)               89           117               93             1            (0)     300 
 Finance costs                                                                                                   209 
 Finance income                                                                                                 (60) 
 Non-operating Income, (net)                                                                                    (70) 
 Share of loss of associate                                                                                      (0) 
 Corporate social responsibility costs         0             0                0             3              -       3 
 Exceptional items pertaining to 
  operating profit                             3             5               10             -              3      21 
 Profit before tax                                                                                               316 
 
 Other segment items 
 Capital expenditure                         115            60               69             2              -     246 
--------------------------------------  --------  ------------  ---------------  ------------  -------------  ------ 
 
 As of September 30, 2019 
 
 Segment assets                            1,237         1,604            1,618        30,775       (25,586)   9,648 
 Segment liabilities                         962         2,614            2,664        17,057       (17,034)   6,263 
 Investment in associate (included in 
  segment assets above)                        -             -                4             -              -       4 
 

Summary of the segmental information for the six months ended September 30, 2018 and as of March 31, 2019 is as follows:

 
 
 Sep-18                                  Nigeria   East Africa   Rest of Africa   Unallocated   Eliminations   Total 
                                        --------  ------------  ---------------  ------------  -------------  ------ 
 
 Revenue from external customers 
  Mobile services                            516           490              424             -              -   1,430 
  Mobile money                                 3            54               25             -              -      82 
  Others                                       0             1                2             -              -       4 
                                             519           545              451           (2)              -   1,513 
 Inter-segment revenue                         1             1                4             -            (6)       - 
 Total revenue                               520           546              455           (2)            (6)   1,513 
 Segment results: Underlying EBITDA          246           211              176          (10)             26     649 
 
 Less: 
 Depreciation and amortisation 
  (excluding exceptional items)               78           111               95             1           (32)     253 
 Finance costs                                                                                                   226 
 Finance income                                                                                                  (8) 
 Share of profit of joint venture and 
  associate                                                                                                       24 
 Corporate social responsibility costs         0             0                0             2              -       2 
 Exceptional items pertaining to 
  operating profit                            25             1                1             3              -      30 
 Profit before tax                                                                                               122 
 
 Other segment items 
 Capital expenditure                          44            74               36             1              -     155 
--------------------------------------  --------  ------------  ---------------  ------------  -------------  ------ 
 
 As of March 31, 2019 
 
 Segment assets                            1,253         1,888            1,526        29,781       (25,336)   9,112 
 Segment liabilities                       1,130         2,896            2,696        16,926       (16,968)   6,680 
 Investment in joint venture and 
  associate (included in segment 
  assets above)                                -             -                3             -              -       3 
 
   6.     Taxation 

The tax expense / (credit) is as follows:

 
                                               For the six months ended 
                                 September 30, 2019                September 30, 2018 
                          --------------------------------  -------------------------------- 
 
 Current tax                                            70                                37 
 Deferred tax                                           18                             (119) 
 Tax expense / (credit)                                 88                              (82) 
                          ================================  ================================ 
 
   7.     Exceptional items 

Underlying profit before tax excludes the following exceptional items:

 
                                                                    For the six months ended 
                                          ---------------------------------------------------------------------------- 
                                                             September 30, 2019                     September 30, 2018 
                                          -------------------------------------  ------------------------------------- 
 Profit before tax                                                          316                                    122 
 
 Add: Exceptional items 
 - Network modernisation (1)                                                 19                                     25 
 - Settlement of litigations and claims 
  (2)                                                                         -                                      3 
 - Share issue and IPO related expenses                                       7                                      - 
 (3) 
 - Voluntary retirement scheme (4)                                            -                                      2 
 - Reversal of indemnities (5)                                             (72)                                      - 
 
                                                                           (46)                                     30 
 Underlying profit before tax                                               270                                    152 
                                          =====================================  ===================================== 
 

1. mainly includes accelerated depreciation pertaining to the non-usable de-installed network equipment as part of the Group's network modernisation programmes started in 2017. The network modernisation programmes which are under progress are expected to be completed by March 2020.

2. represents a charge due to settlement of past litigations, vendor claims, reconciliation of balances and tax related contingent liability.

3. represents equity issuance related expenses under IPO of the Company including cost and fair value changes of derivatives taken for IPO proceeds. It also includes equity issuance cost of rights issue in a subsidiary, Congo B.

4. mainly relates to the voluntary retirement of employees on account of restructuring in Madagascar and Rwanda.

5. represents expiry of indemnity obligation on the publication of registration document of the Company. This is presented as 'Non-operating income' in the statement of comprehensive income.

Underlying profit after tax excludes the following exceptional items:

 
                                                                 For the six months ended 
                                       ---------------------------------------------------------------------------- 
                                                          September 30, 2019                     September 30, 2018 
                                       -------------------------------------  ------------------------------------- 
 Profit after tax                                                        228                                    204 
 -Exceptional item (as above)                                           (46)                                     30 
 -Tax on above exceptional items                                         (1)                                    (4) 
 - Deferred tax asset recognition                                       (27)                                  (116) 
 - Reversal of current tax provision                                       -                                   (27) 
                                                                        (74)                                  (117) 
                                       -------------------------------------  ------------------------------------- 
 Underlying profit after tax                                             154                                     87 
                                       =====================================  ===================================== 
 

Profit attributable to non-controlling interests include benefit of USD 0 and expense of USD 7 during the six months ended September 30, 2019 and 2018 respectively, relating to the above exceptional items.

   8.     Earnings per share ('EPS') 

The details used in the computation of basic EPS:

 
                                                                      For the six months ended 
                                                       September 30, 2019                   September 30, 2018 
                                              -----------------------------------  ----------------------------------- 
 
 
 Profit for the period attributable to 
  owners of the Company                                                       215                                  181 
 Weighted average ordinary shares 
  outstanding for basic EPS(1)                                      3,413,117,559                        1,167,757,622 
 
 Basic EPS                                                                   0.06                                 0.16 
                                              ===================================  =================================== 
 

The details used in the computation of diluted EPS:

 
                                                                      For the six months ended 
                                                       September 30, 2019                   September 30, 2018 
                                              -----------------------------------  ----------------------------------- 
 
 Profit for the period attributable to 
  owners of the Company                                                       215                                  181 
 Weighted average ordinary shares 
  outstanding for diluted EPS (1) (2)                               3,414,000,861                        1,167,757,622 
 
 Diluted EPS                                                                 0.06                                 0.16 
                                              ===================================  =================================== 
 

1. Deferred shares have not been considered for EPS computation as they do not have right to participate in profits. For periods prior to the re-organisation (whereby the Company became the parent of BAIN and its subsidiaries), the weighted average number of shares has been calculated by multiplying the weighted average number of shares of BAIN by the share for share exchange ratio. For the period post re-organisation, the weighted average number of shares considers the shares in issue during the respective periods.

2. The difference between the basic and diluted number of shares at the end of September 2019 being 883,303 (September 2018: Nil) relates to awards committed but not yet issued under the Group's share-based payment schemes.

3. Refer Note 11 for detail on the ordinary share movements as part of the initial public offering process during the six months ended September 30, 2019.

   9.       Property, plant and equipment ('PPE') 

The following table presents the reconciliation of changes in the carrying value of PPE for the six months ended September 30, 2019 and 2018:

 
                    Leasehold Improvements         Building           Land          Plant and Equipment       Furniture & Fixture        Vehicles         Office Equipment          Computer           Total         Capital work-in-progress 
                 ---------------------------  -----------------  -------------  --------------------------  -----------------------  ----------------  ----------------------  ------------------  -------------  ----------------------------- 
  Gross 
  carrying 
  value 
  Balance as of 
   April 1, 
   2018                                   52                 56             29                       1,725                       15                30                      21                 652          2,580                            271 
  Additions                                0                  0              -                         162                        3                 0                       4                  12            181                            183 
  Acquisition 
   through 
   business 
   combinations                            -                  -              -                           6                        -                 -                       -                   -              6                              - 
  Disposals / 
   adjustments                           (0)                (0)              3                         (7)                      (1)               (1)                       1                   5            (0)                          (183) 
  Exchange 
   differences                           (2)                (4)            (1)                       (143)                      (2)               (1)                     (2)                (23)          (179)                            (8) 
  Balance as of 
   September 
   30, 2018                               50                 52             31                       1,743                       15                28                      24                 646          2,589                            263 
                 ===========================  =================  =============  ==========================  =======================  ================  ======================  ==================  =============  ============================= 
 
  Balance as of 
   April 1, 
   2019                                   50                 52             30                       1,957                       18                27                      29                 670          2,833                            365 
  Additions                                0                  0              0                         286                        5                 0                       3                  10            304                            260 
  Disposals / 
   adjustments                           (1)                  -            (0)                        (14)                      (2)               (2)                       0                 (4)           (23)                          (306) 
  Exchange 
   differences                           (1)                (1)            (0)                        (64)                      (1)               (0)                     (1)                (12)           (80)                            (5) 
  Balance as of 
   September 
   30, 2019                               48                 51             30                       2,165                       20                25                      31                 664          3,034                            314 
                 ===========================  =================  =============  ==========================  =======================  ================  ======================  ==================  =============  ============================= 
 
  Accumulated 
  depreciation 
  Balance as of 
   April 1, 
   2018                                   40                 11              1                         297                        7                27                      14                 624          1,021                              - 
  Charge                                   1                  2              0                         162                        2                 1                       2                  16            186 
  Disposals / 
   adjustments                             0                  0              1                           0                      (1)               (1)                     (3)                   7              4 
  Exchange 
   differences                           (2)                (1)            (0)                        (91)                      (2)               (0)                     (2)                (25)          (123) 
  Balance as of 
   September 
   30, 2018                               39                 12              2                         368                        6                27                      11                 622          1,087                              - 
                 ===========================  =================  =============  ==========================  =======================  ================  ======================  ==================  =============  ============================= 
 
  Balance as of 
   April 1, 
   2019                                   41                 13              2                         505                        9                25                      14                 627          1,236                              - 
  Charge                                   2                  2              0                         186                        2                 0                       4                  12            208                              - 
  Disposals / 
   adjustments                           (1)                  -              0                         (6)                      (1)               (2)                     (0)                 (2)           (12)                              - 
  Exchange 
   differences                           (1)                (0)              0                        (42)                      (1)               (0)                     (1)                (11)           (56)                              - 
  Balance as of 
   September 
   30, 2019                               41                 15              2                         643                        9                23                      17                 626          1,376                              - 
                 ===========================  =================  =============  ==========================  =======================  ================  ======================  ==================  =============  ============================= 
 
 
  Net carrying 
  value 
  As of April 
   1, 2018                                12                 45             28                       1,428                        8                 3                       7                  28          1,559                            271 
  As of 
   September 
   30, 2018                               11                 40             29                       1,375                        9                 1                      13                  24          1,501                            263 
  As of April 
   1, 2019                                 9                 39             28                       1,452                        9                 2                      15                  43          1,597                            365 
  As of 
   September 
   30, 2019                                7                 36             28                       1,522                       11                 2                      14                  38          1,658                            314 
 

10. Cash and cash equivalents ('C&CE')

For the purpose of the statement of cash flows, C&CE are as follows:

 
                                                                             As of 
                                          -------------------------------------------------------------------------- 
                                            September 30, 2019 
                                             ------------------                                   September 30, 2018 
                                                                                ------------------------------------ 
 
      C&CE as per statement of financial 
       position                                                          1,469                                   439 
      Bank overdraft                                                     (252)                                 (156) 
                                                                         1,217                                   283 
                                          ====================================  ==================================== 
 

11. Share Capital

 
                                                                                As of 
                                              ------------------------------------------------------------------------ 
                                                September 30, 2019                              March 31, 2019 
                                              ----------------------------------------  ------------------------------ 
 Issued, Subscribed and fully paid-up shares 
 3,758,151,504 Ordinary shares of Airtel 
  Africa Limited of USD 0.5 each (March 
  2019: 3,081,744,577 
  Ordinary shares of USD 1 each) (1) (2)                                         1,879                           3,082 
 3,081,744,577 Deferred shares of USD 0.5                                        1,541                               - 
 each (1) 
 50,000 redeemable Deferred shares of GBP 1                                          0                               - 
 each (3) 
                                                                                 3,420                           3,082 
                                              ========================================  ============================== 
 

1. On June 27, 2019, the Company sub-divided and converted each ordinary share of USD 1 into:

-- One ordinary share of USD 0.50 each having the same rights and being subject to the same restrictions as the existing ordinary shares of the Company; and

-- One deferred share of USD 0.50 each. These deferred shares are not listed and are intended to be cancelled in due course. No share certificates are to be issued in respect of the deferred shares. These are not freely transferable and would not affect the net assets of the Company. The deferred shareholders shall have no right to receive any dividend or other distribution or return whether of capital or income. On a return of capital in a liquidation, the deferred shareholders shall have the right to receive the nominal amount of each deferred share held, but only after the holder of each Other share (i.e. shares other than the deferred shares) in the capital of the Company shall have received the amount paid up on each such Other share held and the payment in cash or in specie of GBP 100,000 (or its equivalent in any other currency) on each such Other shares held. The Company shall have an irrevocable authority from each holder of the deferred shares at any time to purchase all or any of the deferred shares without obtaining the consent of the deferred shareholders in consideration of the payment of an amount not exceeding one US cent in respect of all of the deferred shares then being purchased.

2. On July 3, 2019 and July 9, 2019, the Company completed its listing on the London Stock Exchange (LSE) and Nigerian Stock Exchange (NSE) respectively and raised USD 680 (including share premium of USD 342) from the issue of 676,406,927 new ordinary shares.

3. During the six months ended September 30, 2019, in order to meet the share capital requirements for re-registration as a public limited company, the Company allotted 50,000 redeemable deferred shares of GBP 1.00 each (the 'Redeemable Deferred Shares') to AAML.

12. Borrowings

Non- Current

 
                                                           As of 
                            ------------------------------------------------------------------ 
                                      September 30, 2019                  March 31, 2019 
                            -------------------------------------  --------------------------- 
 Secured 
    Term loans                                                 10                           20 
    Less: Current portion                                    (10)                         (20) 
                            -------------------------------------  --------------------------- 
                                                                0                            0 
 Unsecured 
    Term loans                                                503                          296 
    Non-convertible bonds                                   2,700                        2,680 
                            -------------------------------------  --------------------------- 
                                                            3,203                        2,976 
    Less: Current portion                                   (503)                        (539) 
                            -------------------------------------  --------------------------- 
                                                            2,700                        2,437 
                                                            2,700                        2,437 
                            =====================================  =========================== 
 

Current

 
                                                                             As of 
                                              ------------------------------------------------------------------ 
                                                        September 30, 2019                  March 31, 2019 
                                              -------------------------------------  --------------------------- 
 Secured 
    Term loans                                                                    0                            0 
    Bank overdraft                                                               42                           24 
                                              -------------------------------------  --------------------------- 
                                                                                 42                           24 
 Unsecured 
    Term loans                                                                   32                          409 
     Bank overdraft                                                             208                          192 
                                              -------------------------------------  --------------------------- 
                                                                                240                          601 
                                              -------------------------------------  --------------------------- 
                                                                                283                          625 
 
 Current maturities of long-term borrowings                                     513                          559 
                                              =====================================  =========================== 
 

Additional amounts of USD 180 were drawn down under the Group's loan facilities and overdraft.

Repayments of other bank loans amounting to USD 319 were made during the period, in line with previously disclosed repayment terms.

13. Contingent liabilities and commitments

(i) Contingent liabilities

 
                                                                        As of 
                                                       September 30, 2019                               March 31, 2019 
                              -------------------------------------------  ------------------------------------------- 
 (i) Taxes, Duties and Other 
 demands 
 (under adjudication / 
 appeal / dispute) 
     -Sales Tax & Service 
      Tax                                                              38                                           40 
     -Income Tax                                                       50                                           51 
     -Customs Duty & Excise 
     Duty (1)                                                          11                                           20 
     -Other miscellaneous 
     demands (2)                                                       12                                           13 
 (ii) Claims under legal 
 cases including 
 arbitration matters                                                   21                                           22 
                                                                      132                                          146 
                              ===========================================  =========================================== 
 

There are uncertainties in the legal, regulatory and tax environments in the countries in which the Group operates, and there is a risk of demands which may be raised based on current or past business operations. Such demands have in past been challenged and contested on merits with appropriate authorities and appropriate settlements agreed. Other than amounts provided where the group believes there is a probable settlement and contingent liabilities where the group has assessed the additional possible amounts, there are no other legal, tax or regulatory obligations which may be expected to be material to the financial statements.

The movement in contingent liabilities during the six months ended September 30, 2019 majorly comprise of:

(1) Settlement of Excise Duty assessment pertaining to year 2014 and 2015 in DRC amounting to USD 15. Demand raised under fresh Custom Duty assessment pertaining to year 2014 to 2018 in DRC amounting to USD 5.

(2) Settlement of cases pertaining to social contribution in DRC for year 2012 to 2015 amounting to USD 5.

Guarantees:

Guarantees outstanding as of September 30, 2019 and March 31, 2019 amounting to USD 17 and USD 19 respectively have been issued by banks and financial institutions on behalf of the Group. These guarantees include certain financial bank guarantees which have been given for sub judice matters, the amounts with respect to these have been disclosed under capital commitments, contingencies and liabilities, as applicable, in compliance with the applicable accounting standards.

(ii) Capital commitments

The Group has contractual commitments towards capital expenditure (net of related advances paid) of USD 348 and USD 273 as of September 30, 2019 and March 31, 2019 respectively.

14. Related Party disclosure

(a) List of related parties

   i.            Parent company 

Airtel Africa Mauritius Limited (since September 6, 2018)

Network i2i Limited (until September 6, 2018)

   ii.         Intermediate parent entity 

Network i2i Limited (since September 6, 2018)

Bharti Airtel Limited

   iii.        Ultimate controlling entity 

Bharti Enterprises (Holding) Private Limited. It is held by private trusts of Bharti family, with Mr. Sunil Bharti Mittal's family trust effectively controlling the company.

   iv.        Joint ventures 

Bharti Airtel Ghana Holding B.V. (until August 24, 2018)

Airtel Ghana Limited (until August 24, 2018)

Millicom Ghana Company Limited (until August 24, 2018)

Airtel Mobile Commerce (Ghana) Limited (until August 24, 2018)

Mobile Financial Services Limited (until August 24, 2018)

   v.         Associate 

Seychelles Cables Systems Company Limited

   vi.        Other entities with whom transactions have taken place during the reporting period 
   a.     Fellow subsidiaries 

Bharti Airtel International (Mauritius) Limited

Nxtra Data Limited

Bharti Airtel (Services) Limited

Bharti International (Singapore) Pte Ltd

Bharti Airtel (UK) Limited

Bharti Airtel (USA) Limited

Bharti Airtel (France) SAS

Bharti Airtel Lanka (Private) Limited

Bharti Hexacom Limited

   b.     Other related parties 

Airtel Ghana Limited (since August 24, 2018)

Singapore Telecommunication Limited

   c.     Key Management Personnel ('KMP') 

Raghunath Venkateswarlu Mandava (w.e.f. July 12, 2018)

Jantina C. Uneken - Van de Vreede (till November 12, 2018)

(b) The details of significant transactions with the related parties for the six months ended September 30, 2019 and 2018 respectively, are provided below:

 
                                                                  For the six months ended 
                                      -------------------------------------------------------------------------------- 
                                               September 30, 2019                       September 30, 2018 
                                      ------------------------------------  ------------------------------------------ 
 
 Sale / rendering of services 
 Airtel Ghana Limited                                                    0                                           1 
 Bharti Airtel (France) SAS                                              2                                           3 
 Bharti Airtel (UK) Limited                                             43                                          35 
 Bharti Airtel Limited                                                   4                                           7 
 Bharti International (Singapore) 
 Pte Ltd                                                                 1                                           0 
 Singapore Telecommunication Limited                                     0                                           0 
 Bharti Airtel Lanka (Private) 
 Limited                                                                 0                                           0 
 Bharti Airtel Services Limited                                          0                                           - 
 Network i2i Ltd.                                                        0                                           - 
 
 Purchase / receiving of services 
 Airtel Ghana Limited                                                    0                                           1 
 Bharti Airtel (France) SAS                                              7                                           7 
 Bharti Airtel (UK) Limited                                             27                                          17 
 Bharti Airtel Limited                                                  13                                          13 
 Bharti Airtel Services Limited                                          0                                           1 
 Bharti International (Singapore) 
 Pte Ltd                                                                 6                                           6 
 Network i2i Ltd.                                                        3                                           3 
 Nxtra Data Limited                                                      1                                           0 
 Singapore Telecommunication Limited                                     0                                           0 
 Bharti Airtel Lanka (Private) 
 Limited                                                                 0                                           0 
 Seychelles Cable Systems Company 
 Limited                                                                 0                                           0 
 
 Guarantee and collateral fees 
 Bharti Airtel Limited                                                   5                                           9 
 
 Loan conversion 
 Network i2i Ltd.                                                        -                                       1,107 
 
 Loans repayment 
 Network i2i Ltd.                                                        -                                         259 
 Bharti Airtel (France) SAS                                              -                                           2 
 Bharti Airtel (UK) Limited                                              -                                          31 
 Bharti Airtel (USA) Limited                                             -                                           6 
 
 Loans received 
 Network i2i Ltd.                                                        -                                         410 
 Bharti Airtel (UK) Limited                                              -                                           9 
 Bharti Airtel (USA) Limited                                             -                                           1 
 

15. Fair Value of financial assets and liabilities

The category wise details as to the carrying value, fair value and the level of fair value measurement hierarchy of the Group's financial instruments are as follows:

 
                                                   Carrying value as of                                                         Fair value as of 
                        --------------------------------------------------------------------------  ----------------------------------------------------------------------- 
                                            September 30, 2019                      March 31, 2019                      September 30, 2019                   March 31, 2019 
                        --------------------------------------  ----------------------------------  --------------------------------------  ------------------------------- 
 Financial 
 assets 
 
 FVTPL 
 Derivatives 
 - Forward 
  and option    Level 
  contracts      2                                           1                                   4                                       1                                4 
 - Currency 
  swaps and 
  interest      Level 
  rate swaps     2                                           2                                  46                                       2                               46 
 
                Level 
 Investments     2                                           0                                   0                                       0                                0 
 
 Amortised 
 cost 
 Security deposits                                           7                                   9                                       7                                9 
 Trade receivables                                         131                                 121                                     131                              121 
 Cash and cash 
  equivalents                                            1,469                                 848                                   1,469                              848 
 Other bank balances                                       277                                 259                                     277                              259 
 Other financial 
  assets                                                    67                                  73                                      67                               73 
 
                                                         1,954                               1,360                                   1,954                            1,360 
                        ======================================  ==================================  ======================================  =============================== 
 
 Financial 
 liabilities 
 
 FVTPL 
 Derivatives 
 - Forward 
  and option    Level 
  contracts      2                                          35                                  28                                      35                               28 
 - Currency 
  swaps and 
  interest      Level 
  rate swaps     2                                           1                                   7                                       1                                7 
 - Embedded     Level 
  derivatives    2                                           4                                   4                                       4                                4 
 - Embedded     Level 
  derivatives    3                                           -                                  64                                       -                               64 
 
 Amortised 
 cost 
 Borrowings -   Level 
  fixed rate     1                                       2,700                               2,680                                   2,791                            2,747 
 Borrowings -   Level 
  fixed rate     2                                          49                                  65                                      53                               71 
 Borrowings - floating 
  rate                                                     748                                 875                                     748                              875 
 Trade payables                                            705                                 712                                     705                              712 
 Other financial 
  liabilities                                              391                                 611                                     391                              611 
                                                         4,633                               5,046                                   4,728                            5,119 
                        ======================================  ==================================  ======================================  =============================== 
 

The following methods / assumptions were used to estimate the fair values:

i. The carrying value of bank deposits, trade receivables, trade payables, short-term borrowings, other current financial assets and liabilities approximate their fair value mainly due to the short-term maturities of these instruments.

ii. Fair value of quoted financial instruments is based on quoted market price at the reporting date.

iii. The fair value of non-current financial assets, long-term borrowings and other financial liabilities is estimated by discounting future cash flows using current rates applicable to instruments with similar terms, currency, credit risk and remaining maturities.

iv. The fair values of derivatives are estimated by using pricing models, wherein the inputs to those models are based on readily observable market parameters. The valuation models used by the Group reflect the contractual terms of the derivatives (including the period to maturity), and market-based parameters such as interest rates, foreign exchange rates, volatility etc. These models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgement and inputs thereto are readily observable.

During the six months ended September 30, 2019 and year ended March 31, 2019, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfer into and out of Level 3 fair value measurements.

The following table describes the key inputs used in the valuation (basis discounted cash flow technique) of the Level 2 financial assets / liabilities as of September 30, 2019 and March 31, 2019:

 
 Financial assets / liabilities         Inputs used 
-------------------------------------  ------------------------------------- 
 - Currency swaps, forward and option   Forward foreign currency exchange 
  contracts                              rates, Interest rate 
 - Interest rate swaps                  Prevailing/forward interest rates 
                                         in market, Interest rate 
 - Embedded derivatives                 Prevailing interest rates in market, 
                                         inflation rates 
 - Other financial assets / fixed 
  rate borrowings / other financial     Prevailing interest rates in market, 
  liabilities                            Future payouts , Interest rates 
 

Reconciliation of fair value measurements categorised within level 3 of the fair value hierarchy - Financial Assets / (Liabilities) (net)

 
                                   For the three months ended                            For the year ended 
                     ------------------------------------------------------  ----------------------------------------- 
                                       September 30, 2019                                  March 31, 2019 
                     ------------------------------------------------------  ----------------------------------------- 
 Opening Balance                                                         64                                          - 
 Issuance                                                                 -                                         64 
 Reversal in                                                           (64)                                          - 
 retained earnings 
 Closing Balance                                                          -                                         64 
                     ======================================================  ========================================= 
 

Valuation process used for fair value measurements categorized within level 3 of the fair value hierarchy

As part of issue of equity shares to global investors, the Group has committed indemnities pertaining to acquisition of non-controlling interest in Group's operations in Nigeria and Congo B. The liability for such indemnity derives its value based on the price of the shares in these entities and hence is a derivative liability. The significant input to valuation is the probability of acquisition of minority interest at a lower value and avoiding this pay-out to the global investors. The liability has been valued on the basis of probability weighted amount payable for acquisition of non-controlling interest in these entities which is a significant unobservable input to the valuation.

Narrative description of sensitivity of fair value changes to changes in unobservable inputs

As at March 31, 2019, any increase / decrease in probability of expected pay-outs under non-controlling indemnity liability by 5% would have resulted in 6% increase / decrease in the derivative liability value.

16. Events after the balance sheet date

Other than the following matters, no subsequent events or transactions have occurred since the date of statement of financial position or are pending that would have material effect on the financial statements as at and for the six months ended September 30, 2019:

-- The capital reduction (refer Note 4 (b)) was formally approved by the High Court in London and registered with the Registrar of Companies on October 22, 2019. Consequently GBP 50,000 will be repaid to the holder of the redeemable deferred shares.

Appendix -IAS 34

Additional information pertaining to three months ended September 30, 2019

Condensed Consolidated Statement of Comprehensive Income

(All amounts are in US Dollar millions; unless stated otherwise)

 
                                                                     For three months ended 
                                          ---------------------------------------------------------------------------- 
                                                             September 30, 2019                     September 30, 2018 
                                          -------------------------------------  ------------------------------------- 
      Income 
      Revenue                                                               844                                    769 
      Other income                                                            7                                      6 
                                                                            851                                    774 
 
      Expenses 
      Network operating expenses                                            156                                    141 
      Access charges                                                         94                                     85 
      License fee / spectrum charges 
       (revenue share)                                                       48                                     47 
      Employee benefits expense                                              61                                     53 
      Sales and marketing expenses                                           46                                     42 
      Impairment loss on financial 
       assets                                                               (3)                                      7 
      Other expenses                                                         76                                     68 
      Depreciation and amortisation                                         162                                    137 
                                                                            641                                    581 
 
      Operating profit                                                      210                                    194 
 
      Finance costs                                                          96                                    148 
      Finance income                                                       (38)                                    (5) 
      Non-operating cost                                                      2                                      - 
      Share of loss / profit of joint 
       ventures and associate                                               (0)                                      8 
      Profit before tax                                                     150                                     42 
 
      Tax expense / (credit)                                                 54                                   (12) 
      Profit for the period                                                  96                                     54 
 
      Profit before tax (as presented 
       above)                                                               150                                     42 
      Add: Exceptional items (net)                                            4                                     12 
      Underlying profit before tax                                          153                                     54 
----------------------------------------  -------------------------------------  ------------------------------------- 
 
      Profit after tax (as presented 
       above)                                                                96                                     54 
      Add: Exceptional items (net)                                         (11)                                   (18) 
      Underlying profit after tax                                            85                                     36 
----------------------------------------  -------------------------------------  ------------------------------------- 
 
  Other comprehensive income ('OCI') 
  Items to be reclassified subsequently 
  to profit or loss: 
       Net gains / (losses) due to 
        foreign currency translation 
        differences                                                           7                                   (86) 
       Share of OCI of associate                                              -                                      0 
       Net gain on net investments hedge                                      7                                      0 
       Net loss on cash flow hedge                                          (2)                                    (2) 
  Other comprehensive income / (loss) 
   for the period                                                            12                                   (88) 
 
  Total comprehensive income / (loss) 
   for the period                                                           109                                   (33) 
                                          =====================================  ===================================== 
 
  Profit for the period attributable to:                                     96                                     54 
 
       Owners of the Company                                                 90                                     56 
       Non-controlling interests                                              6                                    (2) 
                                          -------------------------------------  ------------------------------------- 
 
  Other comprehensive income / (loss) 
   for the period attributable to:                                           12                                   (88) 
 
       Owners of the Company                                                 13                                   (84) 
       Non-controlling interests                                            (0)                                    (4) 
                                          -------------------------------------  ------------------------------------- 
 
  Total comprehensive income / (loss)for 
   the period 
   attributable to:                                                         109                                   (34) 
 
       Owners of the Company                                                103                                   (27) 
       Non-controlling interests                                              6                                    (7) 
                                          -------------------------------------  ------------------------------------- 
 

INDEPENT REVIEW REPORT TO AIRTEL AFRICA PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2019 which comprises the Interim Condensed Consolidated Statement of Comprehensive Income, Interim Condensed Consolidated Statement of Financial Position, Interim Condensed Consolidated Statement of Changes in Equity, Interim Condensed Consolidated Statement of Cash Flows and related notes 1 to 16.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Group a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2019 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Emphasis of matter related to going concern

We draw attention to note 3.1 to the condensed set of financial statements. On 24 October 2019, the Honourable Supreme Court of India has ruled on a matter that will result in unknown financial penalties being levied against Bharti Airtel Limited (the intermediate parent company). The impact of these penalties on the intermediate parent company, and whether this could result in an early call on any or all of $2.7 billion of intermediate parent guaranteed bonds set out in note 3 indicates the existence of a material uncertainty which may cast significant doubt about the group's ability to continue as a going concern. Notwithstanding this material uncertainty note 3.1 describes the Directors' view on why it is appropriate to prepare the financial information on a going concern basis. Our review conclusion is not modified in respect of this matter.

Deloitte LLP

Statutory Auditor

London, United Kingdom

25 October 2019

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      Adjustment                                                       Table       Definition and 
                   equivalent     to reconcile                                                 Reference(1)       Purpose 
                      IFRS        to IFRS measure 
                    measure 
                                                                                                             ---------------- 
 Underlying      Operating                                                                         Table      The Group 
  EBITDA          Profit           *    Depreciation and amortisation                                A        defines 
  and Margin                                                                                                  Underlying 
                                                                                                              EBITDA 
                                   *    Charity and donation                                                  as Operating 
                                                                                                              profit/ (loss) 
                                                                                                              for the 
                                   *    Exceptional Item                                                      period before 
                                                                                                              depreciation 
                                                                                                              and 
                                                                                                              amortization, 
                                                                                                              charity and 
                                                                                                              donation and 
                                                                                                              adjusted for 
                                                                                                              exceptional 
                                                                                                              items. 
                                                                                                              Group defines 
                                                                                                              Underlying 
                                                                                                              EBITDA Margin 
                                                                                                              as Underlying 
                                                                                                              EBITDA divided 
                                                                                                              by total 
                                                                                                              revenue. 
                                                                                                              Underlying 
                                                                                                              EBITDA and 
                                                                                                              margin are 
                                                                                                              measures 
                                                                                                              used by the 
                                                                                                              Directors to 
                                                                                                              assess the 
                                                                                                              trading 
                                                                                                              performance of 
                                                                                                              the business 
                                                                                                              and are 
                                                                                                              therefore the 
                                                                                                              measure of 
                                                                                                              segment 
                                                                                                              profit that the 
                                                                                                              Group presents 
                                                                                                              under 
                                                                                                              IFRS. 
                                                                                                              Underlying 
                                                                                                              EBITDA and 
                                                                                                              margin 
                                                                                                              are also 
                                                                                                              presented on a 
                                                                                                              consolidated 
                                                                                                              basis because 
                                                                                                              the Directors 
                                                                                                              believe 
                                                                                                              it is important 
                                                                                                              to consider 
                                                                                                              profitability 
                                                                                                              on a basis 
                                                                                                              consistent with 
                                                                                                              that of 
                                                                                                              the Group's 
                                                                                                              operating 
                                                                                                              segments. When 
                                                                                                              presented on a 
                                                                                                              consolidated 
                                                                                                              basis, 
                                                                                                              Underlying 
                                                                                                              EBITDA and 
                                                                                                              margin are APM. 
                                                                                                              Depreciation 
                                                                                                              and 
                                                                                                              amortisation is 
                                                                                                              a 
                                                                                                              non-cash item 
                                                                                                              which 
                                                                                                              fluctuates 
                                                                                                              depending 
                                                                                                              on the timing 
                                                                                                              of capital 
                                                                                                              investment. 
                                                                                                              Directors 
                                                                                                              believe that a 
                                                                                                              measure which 
                                                                                                              removes this 
                                                                                                              volatility 
                                                                                                              improves 
                                                                                                              comparability 
                                                                                                              of the Group's 
                                                                                                              results period 
                                                                                                              on period 
                                                                                                              and hence is 
                                                                                                              adjusted to 
                                                                                                              arrive at 
                                                                                                              Underlying 
                                                                                                              EBITDA and 
                                                                                                              Margin. 
                                                                                                              Charity and 
                                                                                                              donation is not 
                                                                                                              related 
                                                                                                              to the trading 
                                                                                                              performance of 
                                                                                                              the Group 
                                                                                                              and hence 
                                                                                                              adjusted to 
                                                                                                              arrive at 
                                                                                                              Underlying 
                                                                                                              EBITDA and 
                                                                                                              Margin. 
                                                                                                              Exceptional 
                                                                                                              items are 
                                                                                                              additional 
                                                                                                              specific 
                                                                                                              items that 
                                                                                                              because of 
                                                                                                              their size, 
                                                                                                              nature 
                                                                                                              or incidence in 
                                                                                                              the results, 
                                                                                                              are considered 
                                                                                                              to hinder 
                                                                                                              comparison of 
                                                                                                              the Group's 
                                                                                                              performance on 
                                                                                                              a period to 
                                                                                                              period basis 
                                                                                                              and could 
                                                                                                              distort the 
                                                                                                              understanding 
                                                                                                              of our 
                                                                                                              performance for 
                                                                                                              the period and 
                                                                                                              the 
                                                                                                              comparability 
                                                                                                              between periods 
                                                                                                              and 
                                                                                                              hence are 
                                                                                                              adjusted to 
                                                                                                              arrive at 
                                                                                                              Underlying 
                                                                                                              EBITDA and 
                                                                                                              Margin. 
--------------  --------------  ------------------------------------------------------------  -------------  ---------------- 
 Underlying                                                                                       Table       The Group 
  Operating                        *    Access charges                                               B        defines 
  Expenditure                                                                                                 Underlying 
                                                                                                              Operating 
                                   *    Depreciation and amortisation                                         Expenditure as 
                                                                                                              expenses 
                                                                                                              excluding 
                                   *    Charity and Donation                                                  access 
                                                                                                              charges, 
                                                                                                              depreciation 
                                   *    Exceptional items                                                     and 
                                                                                                              amortisation, 
                                                                                                              charity and 
                                                                                                              donation and 
                                                                                                              adjusted for 
                                                                                                              exceptional 
                                                                                                              items. 
                                                                                                              The Directors 
                                                                                                              view Underlying 
                                                                                                              Operating 
                                                                                                              Expenditure to 
                                                                                                              be a meaningful 
                                                                                                              measure 
                                                                                                              to track the 
                                                                                                              actual cost of 
                                                                                                              the Group's 
                                                                                                              business, 
                                                                                                              excluding 
                                                                                                              exceptional 
                                                                                                              items, 
                                                                                                              as well as to 
                                                                                                              track the 
                                                                                                              efficiency 
                                                                                                              and 
                                                                                                              productivity of 
                                                                                                              the business. 
                                                                                                              The Directors 
                                                                                                              view access 
                                                                                                              charges in 
                                                                                                              net level (net 
                                                                                                              of revenue and 
                                                                                                              cost) 
                                                                                                              in revenue 
                                                                                                              account and 
                                                                                                              hence adjusted 
                                                                                                              to arrive at 
                                                                                                              Underlying 
                                                                                                              Operating 
                                                                                                              Expenditure. 
                                                                                                              Depreciation 
                                                                                                              and 
                                                                                                              amortisation is 
                                                                                                              a 
                                                                                                              non-cash item 
                                                                                                              which 
                                                                                                              fluctuates 
                                                                                                              depending 
                                                                                                              on the timing 
                                                                                                              of capital 
                                                                                                              investment. 
                                                                                                              Directors 
                                                                                                              believe that a 
                                                                                                              measure which 
                                                                                                              removes this 
                                                                                                              volatility 
                                                                                                              improves 
                                                                                                              comparability 
                                                                                                              of the Group's 
                                                                                                              trading 
                                                                                                              expenses period 
                                                                                                              on period and 
                                                                                                              hence is 
                                                                                                              adjusted to 
                                                                                                              arrive at 
                                                                                                              Underlying 
                                                                                                              Operating 
                                                                                                              Expenditure. 
                                                                                                              Charity and 
                                                                                                              donation is not 
                                                                                                              related 
                                                                                                              to the trading 
                                                                                                              expenses of the 
                                                                                                              Group 
                                                                                                              and hence 
                                                                                                              adjusted to 
                                                                                                              arrive at 
                                                                                                              Underlying 
                                                                                                              Operating 
                                                                                                              Expenditure. 
                                                                                                              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 
                                                                                                              trading 
                                                                                                              expenses 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 
                                                                                                              Operating 
                                                                                                              Expenditure. 
--------------  --------------  ------------------------------------------------------------  -------------  ---------------- 
 Underlying      Profit                                                                           Table       The Group 
  Profit          / (Loss)         *    Exceptional Items                                            C        defines 
  / (Loss)        Before                                                                                      Underlying 
  Before          Tax                                                                                         Profit 
  Tax                                                                                                         / (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. 
--------------  --------------  ------------------------------------------------------------  -------------  ---------------- 
 Adjusted        Reported                                                                         Table       The Group 
  effective       tax rate        *    Exceptional items and                                         D        defines 
  tax rate                                                                                                    adjusted 
                                                                                                              effective 
                                  *    Foreign Exchange rate movementsOne off tax litigation                  tax rate as 
                                       settlement                                                             reported tax 
                                                                                                              rate (reported 
                                                                                                              tax charge 
                                                                                                              divided by 
                                                                                                              reported profit 
                                                                                                              before tax) 
                                                                                                              adjusted for 
                                                                                                              exceptional 
                                                                                                              items, foreign 
                                                                                                              exchange rate 
                                                                                                              movements 
                                                                                                              and one off tax 
                                                                                                              litigation 
                                                                                                              settlements. 
                                                                                                              This provides 
                                                                                                              an indication 
                                                                                                              of the 
                                                                                                              on-going tax 
                                                                                                              rate across the 
                                                                                                              Group. 
                                                                                                              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 
                                                                                                              Adjusted 
                                                                                                              effective tax 
                                                                                                              rate. 
                                                                                                              Foreign 
                                                                                                              exchange rate 
                                                                                                              movements are 
                                                                                                              specific items 
                                                                                                              that are 
                                                                                                              non-tax 
                                                                                                              deductible 
                                                                                                              and hence are 
                                                                                                              considered to 
                                                                                                              hinder 
                                                                                                              comparison of 
                                                                                                              the Group's 
                                                                                                              effective 
                                                                                                              tax rate on a 
                                                                                                              period to 
                                                                                                              period basis. 
                                                                                                              One off tax 
                                                                                                              litigation 
                                                                                                              settlement are 
                                                                                                              additional 
                                                                                                              specific items 
                                                                                                              that because 
                                                                                                              of their size 
                                                                                                              and frequency 
                                                                                                              in the 
                                                                                                              results, are 
                                                                                                              considered to 
                                                                                                              hinder 
                                                                                                              comparison 
                                                                                                              of the Group's 
                                                                                                              effective tax 
                                                                                                              rate on 
                                                                                                              a period to 
                                                                                                              period basis. 
--------------  --------------  ------------------------------------------------------------  -------------  ---------------- 
 Underlying      Profit/(loss)                                                                    Table       The Group 
 profit/(loss)    for the          *    Exceptional Items                                            E        defines 
 after            period                                                                                      Underlying 
 tax                                                                                                          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        EPS                                                                              Table       The Group 
  per share                        *    Exceptional Items                                            F        defines 
  before                                                                                                      Earnings per 
  exceptional                                                                                                 share 
  items                                                                                                       before 
                                                                                                              exceptional 
                                                                                                              items as 
                                                                                                              profit/ 
                                                                                                              (loss) for the 
                                                                                                              period before 
                                                                                                              exceptional 
                                                                                                              items 
                                                                                                              attributable to 
                                                                                                              owners of the 
                                                                                                              Group 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 
                                                                                                              Group. 
                                                                                                              Exceptional 
                                                                                                              items are 
                                                                                                              additional 
                                                                                                              specific 
                                                                                                              items that 
                                                                                                              because of 
                                                                                                              their size, 
                                                                                                              nature 
                                                                                                              or incidence in 
                                                                                                              the results, 
                                                                                                              are considered 
                                                                                                              to hinder 
                                                                                                              comparison of 
                                                                                                              the Group's 
                                                                                                              performance on 
                                                                                                              a period to 
                                                                                                              period basis 
                                                                                                              and could 
                                                                                                              distort the 
                                                                                                              understanding 
                                                                                                              of our 
                                                                                                              performance for 
                                                                                                              the period and 
                                                                                                              the 
                                                                                                              comparability 
                                                                                                              between periods 
                                                                                                              and 
                                                                                                              hence are 
                                                                                                              adjusted to 
                                                                                                              arrive at 
                                                                                                              earnings 
                                                                                                              for the purpose 
                                                                                                              of Earnings per 
                                                                                                              share 
                                                                                                              before 
                                                                                                              exceptional 
                                                                                                              items. 
--------------  --------------  ------------------------------------------------------------  -------------  ---------------- 
 Operating       Cash                                                                             Table       The Group 
  Free            generated        *    Income tax paid,                                             H        defines 
  Cash            from                                                                                        Operating Free 
  Flow            operating                                                                                   Cash 
                  activities       *    Changes in working capital,                                           Flow as net 
                                                                                                              cash generated 
                                                                                                              from operating 
                                   *    Other non-cash items,                                                 activities 
                                                                                                              before income 
                                                                                                              tax paid, 
                                   *    Non-operating income,                                                 changes in 
                                                                                                              working 
                                                                                                              capital, other 
                                   *    Charity and donation and                                              non-cash 
                                                                                                              items, 
                                                                                                              non-operating 
                                   *    Exceptional items                                                     income, charity 
                                                                                                              and donation 
                                                                                                              and exceptional 
                                   *    Capital expenditures                                                  items 
                                                                                                              less 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. 
--------------  --------------  ------------------------------------------------------------  -------------  ---------------- 
 Free            Cash                                                                             Table       The Group 
  Cash            generated        *    Changes in working capital,                                  I        defines Free 
  Flow            from                                                                                        Cash Flow as 
                  operating                                                                                   net cash 
                  activities       *    Capital expenditures                                                  generated from 
                                                                                                              operating 
                                                                                                              activities 
                                   *    Cash tax                                                              after change in 
                                                                                                              operating 
                                                                                                              working 
                                   *    Cash Interest                                                         capital, 
                                                                                                              cash tax & cash 
                                                                                                              interest. It is 
                                                                                                              computed 
                                                                                                              as "EBITDA less 
                                                                                                              change in 
                                                                                                              operating 
                                                                                                              working 
                                                                                                              capital, 
                                                                                                              capital 
                                                                                                              expenditures, 
                                                                                                              cash tax and 
                                                                                                              cash interest" 
                                                                                                              The Group views 
                                                                                                              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        No direct                                                                        Table       The Group 
  and Leverage    equivalent       *    Borrowing                                                    J        defines Net 
  Ratio                                                                                                       debt as 
                                                                                                              borrowings 
                                   *    Lease liabilities                                                     including lease 
                                                                                                              liabilities 
                                                                                                              less cash 
                                   *    Cash and cash equivalent                                              and cash 
                                                                                                              equivalents, 
                                                                                                              processing 
                                   *    Fair value hedges                                                     costs 
                                                                                                              related to 
                                                                                                              borrowings and 
                                                                                                              fair value 
                                                                                                              hedge 
                                                                                                              adjustments. 
                                                                                                              The Group 
                                                                                                              defines 
                                                                                                              Leverage Ratio 
                                                                                                              as 
                                                                                                              net debt 
                                                                                                              divided by 
                                                                                                              underlying 
                                                                                                              EBITDA. 
                                                                                                              The Directors 
                                                                                                              view Net debt 
                                                                                                              and Leverage 
                                                                                                              Ratio to be a 
                                                                                                              meaningful 
                                                                                                              measure to 
                                                                                                              monitor the 
                                                                                                              Group's ability 
                                                                                                              to cover 
                                                                                                              its debt 
                                                                                                              through its 
                                                                                                              earnings. 
--------------  --------------  ------------------------------------------------------------  -------------  ---------------- 
 

(1) Refer "Reconciliation between GAAP and Alternative Performance Measures" for respective table.

Some of the Group's APMs are translated at constant exchange rates. Constant exchange rates are the average actual periodic exchange rates for the previous financial period and are used to eliminate the effects of exchange rate fluctuations in assessing performance. Actual exchange rates are the average actual periodic exchange rates for that financial period.

Changes to APMs

During the period, there has not been any change in Group's APM.

Reconciliation between GAAP and Alternative Performance Measures

Table A: Underlying EBITDA and Margin

 
           Description              UoM       Half Year ended 
--------------------------------  ------  ---------------------- 
                                           30-Sep-19   30-Sep-18 
--------------------------------  ------  ----------  ---------- 
 Operating profit                  $ Mn       395         364 
 Add: 
  Depreciation and amortisation    $ Mn       319         278 
  Charity and donation             $ Mn        3           2 
  Exceptional items                $ Mn        2           5 
 Underlying EBITDA                 $ Mn       719         649 
 Revenue                           $ Mn      1,640       1,513 
--------------------------------  ------  ----------  ---------- 
 Underlying EBITDA Margin (%)      $ Mn      43.9%       42.9% 
--------------------------------  ------  ----------  ---------- 
 

Table B: Underlying Operating Expenditure

 
            Description                UoM       Half Year ended 
-----------------------------------  ------  ---------------------- 
                                              30-Sep-19   30-Sep-18 
-----------------------------------  ------  ----------  ---------- 
 Expenses                             $ Mn      1,256       1,166 
  Less: 
     Access charges                   $ Mn      (184)       (171) 
     Depreciation and amortisation    $ Mn      (319)       (278) 
     Charity and donation             $ Mn       (3)         (2) 
     Exceptional items                $ Mn       (2)         (5) 
 Underlying Operating Expenditure     $ Mn       748         710 
                                                         ---------- 
 

Table C: Underlying Profit / (Loss) Before Tax

 
         Description            UoM       Half Year ended 
----------------------------  ------  ---------------------- 
                                       30-Sep-19   30-Sep-18 
----------------------------  ------  ----------  ---------- 
 Profit / (loss) before tax    $ Mn       316         122 
  Exceptional items (net)      $ Mn      (46)         30 
 Underlying profit / (loss) 
  before tax                   $ Mn       270         152 
                                                  ---------- 
 

Table D: Adjusted Effective tax rate

 
 Description                      UoM                                 Half Year ended 
------------------------------  ------ 
                                                      30-Sep-19                             30-Sep-18 
------------------------------  ------  ------------------------------------  ------------------------------------ 
                                          Profit        Income      Tax Rate    Profit        Income      Tax Rate 
                                           before     tax expense       %        before     tax expense       % 
                                          taxation                              taxation 
------------------------------  ------  ----------  -------------  ---------  ----------  -------------  --------- 
 Reported Effective tax 
  rate                           $ Mn       316           88          28%         122          (82)        (67%) 
 Adjusted for : 
 Exceptional Items (provided 
  below)                         $ Mn      (46)           2                       30           147 
 Foreign Exchange rate 
  movements for Non DTA 
  opco's & Hold Co's             $ Mn      (28)                                  (15) 
 Adjusted effective tax 
  rate                           $ Mn       242           90          37%         137           65          47% 
                                                                                                         --------- 
 Exceptional items 
 1. Deferred tax asset 
  recognition                    $ Mn                                                         (116) 
 2. Reversal of current 
  tax provision                  $ Mn                                                          (27) 
 3. Network modernisation        $ Mn       19            2                       25 
 4. Settlement of litigations 
  and claims                     $ Mn                                              3 
 5. Voluntary retirement 
  scheme                         $ Mn                                              2 
 6. Tax on exceptional 
  items                          $ Mn                                                          (4) 
 7. Reversal of indemnities      $ Mn      (72) 
 8. Share issue and IPO 
  related expenses               $ Mn        7 
 Total                           $ Mn      (46)           2                       30          (147) 
                                                                                                         --------- 
 

Table E: Underlying Profit / (Loss) After Tax

 
            Description               UoM       Half Year ended 
----------------------------------  ------  ---------------------- 
                                             30-Sep-19   30-Sep-18 
----------------------------------  ------  ----------  ---------- 
 Profit / (loss) after tax           $ Mn       228         204 
  Exceptional items                  $ Mn      (74)        (117) 
 Underlying profit / (loss) after 
  tax                                $ Mn       154         87 
                                                        ---------- 
 

Table F: Earnings Per Share before exceptional items

 
              Description                   UoM         Half Year ended 
---------------------------------------  ---------  ---------------------- 
                                                     30-Sep-19   30-Sep-18 
---------------------------------------  ---------  ----------  ---------- 
 Profit / (loss) after tax before 
  exceptional items attributable 
  to owners of the Group (Refer Table 
  G)                                        $ Mn        141         71 
 Weighted average number of ordinary 
  shares in issue during the financial 
  period.                                    Mn        3,413       1,168 
 Earnings per share before exceptional 
  items                                   $ Cents       4.1         6.2 
                                                                ---------- 
 

Table G: Earnings Per Share -Restated

 
               Description                    UoM       Half Year ended 
------------------------------------------  --------  -------------------- 
                                                      30-Sep-19  30-Sep-18 
------------------------------------------  --------  ---------  --------- 
Weighted average shares                        Mn       3,413      1,168 
Weighted average shares - Restated             Mn       3,758      3,758 
Profit for the period attributable 
 to owners of the parent                      $ Mn       215        181 
     Operating and Non Operating 
      Exceptional Items                       $ Mn      (46)        30 
     Tax Exceptional Items                    $ Mn      (28)       (147) 
     Non Controlling Interest Exceptional 
      Item                                    $ Mn       (0)         7 
Profit attributable to parent company 
 shareholder - pre Exceptional items          $ Mn       141        71 
Basic EPS                                   $ cents      6.3       15.5 
EPS before exceptional items                $ cents      4.1        6.1 
Basic EPS -Restated (1)                     $ cents      5.7        4.8 
EPS before exceptional items -Restated 
 (1)                                        $ cents      3.7        1.9 
------------------------------------------  --------  ---------  --------- 
 

(1) EPS has been restated considering all the shares as at 30th September 2019 had been issued on 1st April 2018 for like to like comparison.

Table H: Operating Free Cash Flow

 
                Description                   UoM      Half Year ended 
-------------------------------------------  -----  -------------------- 
                                                    30-Sep-19  30-Sep-18 
-------------------------------------------  ----- 
Net cash generated from operating 
 activities                                  $ Mn      596        427 
     Add: Income tax paid                    $ Mn      69         63 
Net cash generation from operation 
 before tax                                  $ Mn      665        490 
Less: Changes in working capital 
      Increase in trade receivables          $ Mn      12         14 
      Increase / (decrease) in inventories   $ Mn       (0)        0 
      Decrease in trade payables             $ Mn      (4)        53 
      Increase / (decrease) in provisions    $ Mn      (2)         3 
      Decrease in other financial 
       and non financial liabilities         $ Mn       9         25 
      Increase in other financial 
       and non financial assets              $ Mn      27         63 
      Decrease in deferred revenue           $ Mn                  6 
Operating cash flow before changes 
 in working capital                          $ Mn      707        654 
      Other adjustments                                 7        (12) 
      Charity and donation                   $ Mn       3          2 
      Exceptional items                      $ Mn       2          5 
Underlying EBITDA                            $ Mn      719        649 
     Less: Capital Expenditure               $ Mn     (246)      (155) 
Operating Free Cash Flow                     $ Mn      473        494 
 

Table I: Free Cash Flow

 
                Description                   UoM     Half Year ended 
                                             ----- 
                                                    30-Sep-19  30-Sep-18 
                                             ----- 
Underlying EBITDA                            $ Mn      719        649 
     Less: Capital Expenditure               $ Mn     (246)      (155) 
Operating free cash flow                     $ Mn      473        494 
Add: Changes in working capital 
      Increase in trade receivables          $ Mn     (12)       (14) 
      Increase / (decrease) in inventories   $ Mn       0         (0) 
      Decrease in trade payables             $ Mn       4        (53) 
      Increase / (decrease) in provisions    $ Mn       2         (3) 
     Decrease in deferred revenue            $ Mn      (0)        (6) 
Operating cash after changes in 
 working capital                             $ Mn      467        418 
     Less: Cash Tax                          $ Mn     (69)       (63) 
     Less: Cash Interest (net)               $ Mn     (162)      (170) 
Free Cash Flow                               $ Mn      237        185 
 

Table J: Net Debt and Leverage

 
             Description                UoM      As at      As at      As at 
                                               30-Sep-19  31-Mar-19  30-Sep-18 
Long term borrowing, net of 
 current portion                        $ Mn     2,700      2,437      3,825 
Short-term borrowings and current 
 portion of long-term borrowing         $ Mn      797       1,184      1,765 
     Add: Processing costs related 
      to borrowings                     $ Mn       5          6         10 
     Add/(less): Fair value hedge 
      adjustment                        $ Mn     (30)         8         75 
     Less: Cash and Cash Equivalents    $ Mn    (1,469)     (848)      (439) 
Net Debt excluding Lease Obligations    $ Mn     2,003      2,787      5,236 
      Add: Lease Obligations            $ Mn     1,188      1,218      1,203 
Net Debt including Lease Obligations    $ Mn     3,191      4,005      6,439 
 
Underlying EBITDA (LTM)                 $ Mn     1,402      1,332      1,259 
Underlying EBITDA (Annualized)          $ Mn     1,439      1,366      1,297 
Leverage (LTM)                         Times      2.3        3.0        5.1 
Leverage (Annualized)                  Times      2.2        2.9        5.0 
 

Glossary

Technical and Industry Terms

 
Company Related 
Average Customers        Average customers are derived by computing the average 
                          of the monthly average customers for the relevant 
                          period. 
ARPU                     Average revenue earned per user per month, which 
                          is derived by dividing total revenue during 
                          the relevant period by the average number of customers 
                          and dividing the result by the number of months 
                          in the relevant period 
Capital Expenditure      It is not a GAAP measure and is defined as investment 
                          in gross fixed assets (tangible and intangible excluding 
                          spectrum/license) and capital work in progress (CWIP) 
                          excluding provisions on CWIP for the period. 
Churn                    The total number of customer disconnections during 
                          the relevant period divided by the average customers 
                          in the relevant period. 
Customer Base            Total number of subscribers that used any of our 
                          services (voice calls, SMS, data usage or Airtel 
                          Money transaction) in the last 30 days. 
Data Customer            Total subscribers that consumed at least 1MB on the 
 Base                     Group's GPRS, 3G or 4G network in the last 30 days 
Data Usage per           The average data consumption per data subscriber 
 Customer                 on a monthly basis. It is 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. 
Underlying EBITDA        It is not a GAAP measure; it is defined as operating 
                          profit before depreciation, amortization, CSR cost 
                          and exceptional items. 
Underlying EBITDA        It is not a GAAP measure; It is computed by dividing 
 Margin                   Underlying EBITDA for the relevant period by total 
                          revenue for the relevant period. 
Earnings Per Share       EPS is computed by dividing the profit for the period 
 (EPS)                    attributable to the owners of the parent company 
                          by the weighted average number of shares outstanding 
                          during the period. 
Free Cash Flow           Free Cash Flow defined as Operating Free Cash Flow 
                          less cash interest, cash tax and change in operating 
                          working capital. 
Lease Obligation         Lease Obligation represents the present value of 
                          the future lease payment obligation. 
Mobile Broadband         It includes all the 3G and 4G Base stations deployed 
 Base stations            across all technologies/spectrum bands 
Minutes of Usage         Total voice minutes used by customers on the Group's 
                          network during the relevant period. 
Network Towers/Sites     Comprises of Base Transmission System (BTS) which 
                          holds the radio transceivers (TRXs) that define a 
                          cell and coordinates the radio links protocols with 
                          the mobile device. It includes all the Ground based, 
                          Roof top and In Building Solutions as at the end 
                          of the period. Towers as referred to be revenue generating 
                          Towers. 
Net Debt                 It is not a GAAP measure and is defined as the long-term 
                          borrowings, short term borrowings and leased liability 
                          less cash and cash equivalents. 
Net Debt to Underlying   It is not a GAAP measure and is computed by dividing 
 EBITDA (LTM)             Net Debt as at the end of the relevant period by 
                          Underlying EBITDA for preceding last 12 months (from 
                          the end of the relevant period). 
Net Debt to Underlying   It is not a GAAP measure and is computed by dividing 
 EBITDA (Annualized)      net debt as at the end of the relevant period by 
                          Underlying EBITDA for the relevant period (annualized). 
Operating Free           It is computed by subtracting Capital Expenditure 
 Cash flow                from Underlying EBITDA. 
Operating Profit         It is a GAAP measure and is computed as Revenue less 
                          operating expenditure including depreciation & amortisation 
                          and operating exceptional items. 
Return On Equity         For the full year ended it is computed by dividing 
 attributable to          net profit for the period by the closing Equity attributable 
 equity holders           to equity holders of parent. For the quarterly computations, 
 of parent                it is computed by dividing net profit for the preceding 
                          last 12 months from the end of the relevant period 
                          by the closing Stockholder's equity for the relevant 
                          period. 
Total MBs on Network     Includes total MBs consumed (uploaded & downloaded) 
                          via our network during the relevant period. 
Voice Minutes            Total voice minutes of usage the Group's network 
 of Usage per Customer    during the relevant period divided by the average 
 per month                number of customers during the same period, divided 
                          by the number of months in the relevant period. 
Weighted Average         The weighted average number of shares is calculated 
 No of Shares             by taking the number of outstanding shares and multiplying 
                          the portion of the reporting period those shares 
                          covered, doing this for each portion and, finally, 
                          summing the total. 
 
 
Abbreviations 
3G             Third - Generation Technology 
4G             Fourth - Generation Technology 
ARPU           Average Revenue Per User 
bps            Basis points 
EBITDA         Earnings Before Interest, Tax, Depreciation and Amortisation 
EPS            Earnings Per Share 
IPO            Initial Public Offering 
IVR            Interactive Voice Response 
LTM            Last twelve months 
LTE            Long-Term Evolution (4G technology) 
MI             Minority Interest (Non Controlling Interest) 
MB             Megabyte 
Mn             Million 
GAAP           Generally Accepted Accounting Principles 
GB             Gigabyte 
KYC            Know Your Customer 
IAS            International Accounting Standards 
IFRS           International Financial Reporting Standards 
ppts           Percentage points 
P2P            Person 2 Person 
RAN            Radio Access Network 
RoE            Return on Equity 
SIM            Subscriber Identification Module 
 

Risk Factors

The Group's business and the industry in which it operates, together with all other information contained in this document as a whole, including, in particular, the risk factors summarized below. The risk factors described in the prospectus are not an exhaustive list or explanation of all risks which investors may face and should be used as guidance only. Additional risks and uncertainties relating to the Group that are not currently known to the Group, or that the Group currently deem immaterial, may individually or cumulatively also have a material adverse effect on the Group's business, results of operations and financial condition. For detailed risks, refer page number 14 to 45 in the prospectus which was filled in June 2019, just before the Initial Public Offering of the Ordinary shares.

Summarized Risks

1. The Group operates in an increasingly competitive environment, particularly with respect to pricing and market share, across its markets and segments, which may adversely affect its revenue and margins.

2. If the Group does not continue to provide telecommunications or related products and services that are useful and attractive to customers on a timely basis, it may not remain competitive.

3. The Group may face increased competition from non-traditional OTT telecommunications players.

4. Demand for traditional paid voice services across the telecommunications industry globally is in decline.

5. The Group may experience a failure or interruption in the operations of its networks, gateways to its networks or the networks of other operators (some of which may be outside its control).

   6.     The Group may not be able to pass on increased costs to consumers. 

7. The Group may not be able to successfully implement the Group's overall strategy, including its growth strategy.

   8.     The Group's insurance coverage may not be adequate. 

9. The Group may be unable to identify or accurately evaluate suitable candidates for acquisition or merger, or to complete or integrate past or prospective acquisitions or mergers successfully or in a timely or cost-effective manner, which could adversely affect the Group's overall strategy.

10. Current and future antitrust and competition laws in the countries in which the Group operates may limit its growth and subject it to antitrust and other investigations or legal proceedings.

11. Telecommunications businesses require substantial capital investment and the Group may not be able to obtain sufficient financing on favourable terms.

12. The Group's success relies on the Group's central and local management team and other highly skilled personnel.

13. The Group is reliant on local management to provide accurate and timely reporting.

14. The Group is dependent on third parties for the supply of certain of the Group's services.

15. Mobile money services are subject to a new and evolving regulatory environment.

16. The Group's IT systems may fail to perform their functions adequately or be interrupted, which could have a material adverse effect on the Group's business

17. A computer system failure, security breach or cyber-attack could significantly disrupt the Group's ability to operate its business.

18. The Group operates a large distribution and channel partner network and is reliant on good working relationships with its franchisees and other third-party distributors.

19. Fluctuations in foreign currency exchange could increase the operating and debt servicing costs of, and the financial burden on, the Group and any hedging transactions involve risks that can harm the Group's financial performance.

20. The Group is dependent on interconnection with its competitors' networks and associated infrastructure as well as roaming arrangements with other international telecommunications operators.

21. The Group faces risks relating to its property and towers portfolio, including failure by the Group to renew leases, which could lead to decreased revenue, reduce the Group's network capacity and markets or raise the Group's costs.

22. Risks relating to countries where the Group operates

23. Actions by governments, political events or instability or changes in public policy in the countries in which the Group operates could have an adverse effect on the Group's business.

24. The Group is subject to inflation risks, which might adversely affect its business, results of operations, financial condition and prospects.

25. There are uncertainties in the legal, regulatory and tax environments in the countries in which the Group operates, and there is a risk of demands which may be raised based on current or past business operations. Such demands have in past been challenged and contested on merits with appropriate authorities and appropriate settlements agreed. Other than amounts provided where the group believes there is a probable settlement and contingent liabilities where the group has assessed the additional possible amounts, there are no other legal, tax or regulatory obligations which may be expected to be material to the financial statements.

Statement of Director's Responsibilities

For the 6 month period ended 30 September 2019

Each of the directors of Airtel Africa plc, confirms to the best of his or her knowledge and belief that:

-- The condensed set of financial statements, which has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union, gives a true and fair view of the assets, liabilities, financial position and profit or loss of Airtel Africa plc.

   --      The interim management report includes a fair review of the information required by: 

(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of consolidated financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the Group's 31 March 2019 Historical Financial Information, within the Prospectus, that could do so.

The Directors of Airtel Africa plc are listed on pages 196 of the Prospectus. No changes to the Directors have been made since the date of the Prospectus.

On behalf of the Board

Raghunath Mandava

Chief Executive Officer

25(th) of October 2019

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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