TIDMAAF
RNS Number : 0361L
Airtel Africa PLC
11 May 2022
Airtel Africa plc
Results for the year ended 31 March 2022
11 May 2022
Full-year highlights
-- Reported revenue grew by 20.6% for the year, to $4,714m, and
17.8% for Q4. Constant currency underlying revenue grew 23.3% for
the year and 19.1% in Q4.
-- Constant currency underlying revenue growth was strong in all
regions: Nigeria up 27.7%, East Africa up 22.7% and Francophone
Africa up 17.2%; and across all key services, with revenue in Voice
up 15.4%, Data up 34.6% and Mobile Money up 34.9%.
-- Underlying EBITDA of $2,311m, grew by 29.0% in reported currency.
-- Underlying EBITDA margin of 49.0%, increased by 294 basis points.
-- Operating profit grew by 37.2% to $1,535m in reported currency.
-- Profit after tax grew by 82.0% to $755m.
-- Basic EPS of 16.8 cents, an increase of 86.5%. EPS before
exceptional items of 16.0 cents (FY'21: 8.2 cents).
-- Operating free cash flow of $1,655m, up 40.5%, with net cash
generated from operating activities up 20.7% to $2,011m. Over the
last twelve months the business has repaid nearly $1.4bn of debt at
HoldCo as a result of strong cash upstreaming across its OpCos and
proceeds from minority investments in mobile money and tower
sales.
-- Leverage ratio improved to 1.3x from 2.0x in the prior year,
with $1bn of debt now held at HoldCo (FY'21: $2.4bn).
-- Customer base of 128.4 million, up 8.7%, with increased
penetration across mobile data (customer base up 15.2%) and mobile
money services (customer base up 20.7%). NIN/SIM regulations in
Nigeria impacted customer growth in H1, but then returned to strong
growth, adding 4 million customers in Nigeria during H2'22.
-- Board recommends a final dividend of 3 cents per share,
making total FY'22 dividends 5 cents per share (FY'21: 4
cents).
Alternative performance measures (2) GAAP measures
(Year ended) (Year ended)
------------------------------------------------------------------ -------------------------------------------------
Description Mar-22 Mar-21 Reported Constant Description Mar-22 Mar-21 Reported
currency currency currency
------------------------ -------------------
$m $m change change $m $m change
% % %
------------------------ ------- ------- ---------- ---------- ------------------- ------- ------- ----------
Underlying revenue
(1) 4,714 3,888 21.3% 23.3% Revenue 4,714 3,908 20.6%
------------------------ ------- ------- ---------- ---------- ------------------- ------- ------- ----------
Underlying EBITDA 2,311 1,792 29.0% 31.2% Operating profit 1,535 1,119 37.2%
------------------------ ------- ------- ---------- ---------- ------------------- ------- ------- ----------
Underlying EBITDA 294 296 Profit after
margin 49.0% 46.1% bps bps tax 755 415 82.0%
------------------------ ------- ------- ---------- ---------- ------------------- ------- ------- ----------
EPS before exceptional Basic EPS ($
items ($ cents) 16.0 8.2 96.0% cents) 16.8 9.0 86.5%
------------------------ ------- ------- ---------- ---------- ------------------- ------- ------- ----------
Net cash generated
Operating free from operating
cash flow 1,655 1,178 40.5% activities 2,011 1,666 20.7%
------------------------ ------- ------- ---------- ---------- ------------------- ------- ------- ----------
( (1) Underlying r evenue excludes a one-time exceptional
revenue of $20m relating to a settlement in Niger in the prior
year.
( (2) Alternative performance measures (APM) are described on
page 51.
Segun Ogunsanya, chief executive officer, on the trading
update:
"This is another strong set of results for Airtel Africa,
demonstrating our solid execution as we continue to enrich the
lives of a growing number of people through leveraging the sizeable
opportunity to promote digital and financial inclusion across our
markets.
We have delivered strong double-digit growth in revenues across
all our regions and all our key services, with improving margins
driven by strong cost control, and expanding cash generation which
is enabling us to continue to invest in our network and services
and expand our distribution, as well as strengthening our balance
sheet and increasing our returns to shareholders. We are connecting
more customers in new and existing coverage areas and driving usage
levels and ARPUs to new highs.
We have successfully executed on a number of strategic
initiatives in the year, with tower sales completed in four
countries, $550m of minority investments secured for our mobile
money business and a successful buyout of minorities in our
Nigerian operation. Our receipt last month of a full PSB licence in
Nigeria will help us to accelerate financial inclusion in the
territory and drive our mobile money business even faster.
While the fundamentals of our six-pillar growth strategy remain
unchanged, we are looking to accelerate our performance through a
greater focus on digitalisation and we have underpinned our
strategic pillars with our sustainability ambition.
I am particularly proud of the progress we have made in
articulating our sustainability strategy this year as well as the
partnership we announced with UNICEF to help drive and support
educational programmes in our territories. I very much look forward
to us publishing both our pathway to net zero and our first full
sustainability report later in the year.
Turning to the outlook, long-term opportunities for us remain
attractive. While mindful of currency devaluation and repatriation
risks, we continue to work actively to mitigate all our material
risks and to deliver value for all our stakeholders. There are
increasing challenges from global inflationary pressures, but we
continue to target revenue growth ahead of the market and moderate
margin expansion."
Airtel Africa plc ("Airtel Africa" or "Group") annual financial
information contained in this report is drawn from Airtel Africa
plc's audited annual consolidated financial statements for the
years ended 31 March 2022 and 31 March 2021, prepared in accordance
with the requirements of the Companies Act 2006 and International
Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB) and approved for use in the
United Kingdom (UK) by the UK Accounting Standards Endorsement
Board (UKEB). Quarterly information is drawn from unaudited IAS 34
financials of respective periods. Comparative period figures have
been regrouped/ reclassified to conform with current year grouping/
classification.
About Airtel Africa
Airtel Africa is a leading provider of telecommunications and
mobile money services, with a presence in 14 countries in Africa,
primarily in East Africa and Central and West Africa.
Airtel Africa offers an integrated suite of telecoms solutions
to its subscribers, including mobile voice and data services as
well as mobile money services, both nationally and internationally.
We aim to continue providing a simple and intuitive customer
experience through streamlined customer journeys.
Enquiries
Airtel Africa - Investor Relations
Pier Falcione +44 7446 858 280
Morten Singleton +44 7464 830 011
Investor.relations@africa.airtel.com +44 207 493 9315
Hudson Sandler
Nick Lyon
Emily Dillon
airtelafrica@hudsonsandler.com +44 207 796 4133
Conference call
Management will host an analyst and investor presentation and
conference call at 12:00pm UK time (BST), on Wednesday 11 May 2022,
including a Question and Answer session.
To receive an invitation with the dial in numbers to participate
in the event, please register beforehand using the following
link:
https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=1370750&linkSecurityString=2d5d99c98
Key financial information
Description Unit Year ended Quarter ended
of measure
----------------- ------------------------------------------ ----------------------------------------
Mar-22 Mar-21 Reported Constant Mar-22 Mar-21 Reported Constant
currency currency currency currency
change change change change
% % % %
----------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Profit and loss
summary
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Underlying
revenue
(1) $m 4,714 3,888 21.3% 23.3% 1,222 1,038 17.8% 19.1%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue $m 2,358 2,083 13.2% 15.4% 611 547 11.8% 13.6%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 1,525 1,157 31.8% 34.6% 397 315 26.0% 27.9%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
revenue
(2) $m 553 401 37.9% 34.9% 147 110 33.6% 29.0%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Other revenue $m 407 347 17.4% 19.9% 102 91 12.3% 14.0%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Expenses $m (2,413) (2,107) 14.5% 16.4% (616) (544) 13.2% 14.8%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Underlying
EBITDA
(3) $m 2,311 1,792 29.0% 31.2% 608 495 22.9% 23.7%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Underlying
EBITDA 294 296 206 187
margin % 49.0% 46.1% bps bps 49.7% 47.7% bps bps
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Depreciation and
amortisation $m (744) (681) 9.3% 11.3% (188) (176) 6.6% 8.4%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Operating
exceptional
items (4) $m (32) 14 - - (32) 1 - -
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Operating profit $m 1,535 1,119 37.2% 39.4% 390 319 22.3% 22.0%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Net finance
costs
(5) $m (403) (423) (4.6%) (112) (104) 7.7%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Non-operating
exceptional
items(6) $m 92 - - 82 - -
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Profit before
tax $m 1,224 697 75.6% 360 215 67.4%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Tax $m (471) (318) 48.2% (122) (82) 47.5%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Tax -
exceptional
items $m 2 36 - 2 21 -
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Total tax charge $m (469) (282) 66.3% (120) (61) 95.2%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Profit after
tax $m 755 415 82.0% 240 154 56.0%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Non-controlling
interest $m (124) (76) 62.9% (50) (22) 130.7%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Profit
attributable
to owners of
the
company -
before
exceptional
items $m 602 308 95.9% 171 121 41.5%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Profit
attributable
to owners of
the
company $m 631 339 86.3% 190 132 43.7%
----------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
EPS - before
exceptional
items cents 16.0 8.2 96.0% 4.6 3.2 41.6%
================= ============= ======== ======== ========== ========== ======= ======= ========== ==========
Basic EPS cents 16.8 9.0 86.5% 5.1 3.5 43.8%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Weighted average
no of shares million 3,754 3,758 (0.1%) 3,753 3,756 (0.1%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Capex $m 656 614 6.9% 224 211 6.4%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Operating free
cash flow $m 1,655 1,178 40.5% 384 284 35.1%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Net cash
generated
from operating
activities $m 2,011 1,666 20.7% 512 449 14.1%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Net debt $m 2,941 3,530 2,941 3,530
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Leverage (net
debt to
underlying
EBITDA) times 1.3x 2.0x 1.3x 2.0x
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Return on
capital 678 680
employed % 23.3% 16.5% bps 23.2% 16.4% bps
----------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Operating KPIs
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
ARPU $ 3.2 2.8 13.5% 15.4% 3.2 2.9 9.5% 10.7%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Total customer
base million 128.4 118.2 8.7% 128.4 118.2 8.7%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Data customer
base million 46.7 40.6 15.2% 46.7 40.6 15.2%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
customer
base million 26.2 21.7 20.7% 26.2 21.7 20.7%
----------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
(1) Revenue includes intra-segment eliminations of $129m for the
year ended 31 March 2022 and $100m for the prior year. And it also
excludes one-time exceptional revenue of $20m relating to a
settlement in Niger in the year ended 31 March 2021.
(2) Mobile money revenue post intra-segment eliminations with
mobile services was $424m for the year ended 31 March 2022, and
$301m for the prior year.
(3) Underlying EBITDA includes other income of $10m for the year
ended 31 March 2022, and $11m for the prior year.
(4) Operating exceptional items of $32m in the year ended 31
March 2022 consists of a $12m provision for expected settlement of
a contractual dispute in which one of the Group's subsidiaries is a
party and $20m costs of agreeing historical spectrum fees in one of
the Group's subsidiaries. The prior year operating exceptional
items includes exceptional revenue relating to a one-time
settlement in Niger for $20m, partially offset by one-off costs of
$6m in Francophone Africa.
(5) Net finance costs in the year ended 31 March 2022 excludes a
one-off cost of $19m on prepayment of $505m bonds in March
2022.
(6) Non-operating exceptional items in the year ended 31 March
2022 include a gain of $111m on the sale of telecommunication tower
assets in the Group's subsidiaries in Tanzania, Malawi, Madagascar,
and Rwanda, partially offset by costs of $19m on prepayment of
$505m of bonds.
Financial review for the year ended 31 March 2022
We have recorded another strong set of results that demonstrate
the effective execution of our strategy, with strong performance
across our regional segments and key services. Reported revenue
grew by 20.6%.
Underlying revenue in constant currency grew by 23.3%. Revenue
in Nigeria grew by 27.7%, in East Africa by 22.7% and in
Francophone Africa by 17.2% in constant currency. We have delivered
strong double-digit growth across all our key services: voice
revenue grew by 15.4%, data revenue grew by 34.6%, mobile money
revenue grew by 34.9%, and other revenue by 19.9%. Growth in other
revenues was marginally impacted in Q4'22 from the loss of c.$6m
revenues from tower sharing related to tower sales completed in the
year. Mobile services revenue grew by 22.0% in constant currency
(19.6% in reported currency) and mobile money services revenue grew
by 34.9% (37.9% in reported currency). Revenue growth for the year
benefited from a weakened performance in the first quarter of the
prior year during the peak period of Covid-19 restrictions across
the region.
Net finance costs were broadly flat. The increase in tax charges
of $187m was due to higher operating profits and withholding tax on
dividends by subsidiaries, with the prior year also benefitting
from $36m deferred tax credit recognition.
Basic EPS improved to 16.8 cents while EPS before exceptional
items improved to 16.0 cents, with higher profits more than
offsetting the associated increased tax charges, and higher
non-controlling interests due to higher profit contributions in
OpCos with minority shareholdings and new minority shareholdings in
Airtel Money, partially offset by lower minority interests in
Airtel Nigeria as a result of the successful share buy-back.
Leverage improved to 1.3x from 2.0x in the prior year, largely
driven by increased cash generation, expansion of underlying EBITDA
and proceeds from Airtel Money investments. Our balance sheet has
also been further de-risked by continued localisation of our debt
into the OpCos and material debt reduction in HoldCo.
GAAP measures
Revenue
Reported revenue grew by 20.6% to $4,714m. The prior year
benefited from one-time exceptional revenue of $20m relating to a
settlement in Niger. Excluding this, revenue grew by 21.3% in
reported currency and by 23.3% in constant currency. Constant
currency growth of 23.3% was partially offset by currency
devaluations, mainly in the Nigerian naira (5.6%) and the Malawian
kwacha (7.2%), in turn partially offset by appreciation in the
Ugandan shilling (4.1%) and Zambian kwacha (4.4%). Revenue growth
for the year benefited from a weakened performance in the first
quarter of the prior year during the peak period of Covid-19
restrictions across the region.
Operating profit
Operating profit grew by 37.2% to $1,535m in reported currency
as a result of strong revenue growth and improvements in operating
efficiency across all our regions. Operating profit included a
one-time cost of $32m consisting of a $12m provision for expected
settlement of a contractual dispute in which one of the Group's
subsidiaries is a party, and $20m costs relating to an agreement on
historical spectrum fees in one of the Group's subsidiaries. This
compared to the prior year which included a gain of $20m for a
one-time settlement in Niger, which was partially offset by one-off
costs of $6m in Francophone Africa. Excluding exceptional items,
operating profit grew by 41.9%.
Net finance costs
Net finance costs were broadly flat, as lower foreign exchange
and derivative losses, higher interest income and a one-time $12m
gain in other finance charges as a result of the reversal of an
interest provision in one of our operating entities were offset by
a one-off cost of $19m for the applicable premium paid on the early
repayment of the $505m bonds in March 2022. Additionally, interest
costs were also broadly flat as lower interest costs on our reduced
market debt were offset by an increase in interest costs on lease
liabilities.
The Group effective interest rate increased to 5.6% compared to
4.9%, largely driven by repayment of the EUR750m bond in May 2021,
which carried a lower-than-average coupon, and due to higher local
currency debt at the OpCo level. In line with our strategy to
continue to reduce foreign currency debt at HoldCo, we also repaid
$505m bonds in March 2022, one year earlier than their March 2023
redemption date. One-off costs of $19m, including applicable
premium, have been recorded under non-operating exceptional items,
while the Group will save an aggregate of c.$26m on interest
payments from the early redemption.
Taxation
Total tax charges were $469m, an increase of $187m, driven by
higher operating profit and withholding tax on dividends by
subsidiaries. The prior year also benefited from the recognition of
a deferred tax credit of $36m in Tanzania.
Profit after tax
Profit after tax increased by 82.0% to $755m. This increase was
mainly led by higher operating profits and stable net finance costs
which more than offset the associated increase in tax charges.
Exceptional gains were also $12m higher than the prior year.
Basic EPS
Basic EPS climbed to 16.8 cents, an improvement of 7.8 cents
(+86.5%) from 9.0 cents in the prior year. This increase was mainly
due to higher operating profits which more than offset increased
tax charges and higher non-controlling interests (due to higher
profit contributions in OpCos with minority shareholdings, new
minority shareholdings in Airtel Money partially offset by lower
minority interests in Airtel Nigeria as a result of the successful
share buy-back).
Net cash generated from operating activities
Net cash generated from operating activities was $2,011m, an
increase of 20.7% from $1,666m in the prior period. The increase
was largely driven by higher profit before tax of $527m, which was
partially offset by higher tax payments on the increased profits
and withholding tax on dividends by subsidiaries. Over the last
twelve months the business has repaid nearly $1.4bn of debt at
HoldCo as a result of strong cash upstreaming across its OpCos and
proceeds from minority investments in mobile money and tower
sales.
Alternative performance measures [1]
Underlying revenue
Underlying revenue in constant currency grew by 23.3%, driven by
both customer base growth of 8.7% and ARPU growth of 15.4%. The
slowdown in customer base growth was due to the introduction of new
SIM registration regulations in Nigeria. Excluding Nigeria, the
customer base grew by 10.2%. In Nigeria, our customer base returned
to growth in the second half of the year, adding a net 2.4 million
customers for the full year. At the end of the year our total
customer base was 128.4 million, an increase of 10.2 million. ARPU
growth of 15.4% was driven by all our key services: with data
contributing 7.7%, voice contributing 4.3%, mobile money
contributing 2.7%, and the balance coming from other revenue, which
was marginally impacted in Q4 from the loss of tower sharing
revenues relating to towers sold during the year.
Revenue growth was recorded across all our regions and key
services. Underlying revenue in Nigeria grew by 27.7%, in East
Africa by 22.7%, and in Francophone Africa by 17.2%. Voice revenue
grew by 15.4%, data revenue grew by 34.6% and mobile money revenue
grew by 34.9% in constant currency.
Underlying EBITDA
Underlying EBITDA was $2,311m, an increase of 29.0% in reported
currency and of 31.2% in constant currency. Growth in underlying
EBITDA was led by revenue growth and supported by improved
operating efficiencies. The underlying EBITDA margin improved by
294 basis points in reported currency to 49.0%.
Foreign exchange had an adverse impact of $58m on revenue, and
$26m on underlying EBITDA, as a result of devaluations of the
Nigerian naira and the Malawian kwacha, in turn partially offset by
appreciations of both the Ugandan shilling and the Zambian
kwacha.
With respect to currency devaluation sensitivity, on a 12-month
basis, a 1% currency devaluation across all currencies in our OpCos
would have a negative impact of $43m on revenues, $26m on
underlying EBITDA and $21m on finance costs. Our largest exposure
is to the Nigerian naira, for which a 1% devaluation would have a
negative impact of $18m on revenues, $11m on underlying EBITDA and
$7m on finance costs.
Tax
The effective tax rate was 39.0% compared to 43.2% in the prior
period, largely due to profit mix changes amongst the OpCos. The
effective tax rate is higher than the weighted average statutory
corporate tax rate of approximately 33%, largely due to the profit
mix between various OpCos and withholding taxes on dividends by
subsidiaries.
Exceptional items
Operating exceptional items of $32m in the year ended 31 March
2022 consists of a $12m provision for expected settlement of a
contractual dispute in which one of the Group's subsidiaries is a
party and $20m costs of agreeing historical spectrum fees in one of
the Group's subsidiaries. The prior period operating exceptional
items includes exceptional revenue on account of a one-time
settlement in Niger amounting to $20m, partially offset by a
one-off cost of $6m in Francophone Africa.
Non-operating exceptional items in the year ended 31 March 2022
include a gain of $111m on the sale of telecommunications tower
assets in the Group's subsidiaries in Tanzania, Malawi, Madagascar,
and Rwanda, partially offset by one-off costs of $19m including
applicable premium paid on the early repayment of $505m bonds in
March 2022.
Exceptional tax benefit of $2m recognised in the year mainly
relate to the provision for the contractual dispute in which one of
the Group's subsidiaries is a party, and the $36m in the prior year
relates to deferred tax credit recognition in Tanzania.
EPS before exceptional items
EPS before exceptional items almost doubled to 16.0 cents, up by
96.0% (+7.8 cents) from 8.2 cents in the prior year. This increase
was mainly due to higher operating profits which more than offset
the increased tax charges and higher non-controlling interests (due
to higher profit contributions in OpCos with minority
shareholdings, new minority shareholdings in Airtel Money partially
offset by lower minority interests in Airtel Nigeria as a result of
the successful share buy-back).
Operating free cash flow
Operating free cash flow increased by 40.5% to $1,655m, as
higher underlying EBITDA more than offset increased capital
expenditure. Capital expenditure in the prior year was slightly
lower due to logistical challenges as a result of the pandemic.
Leverage
Leverage (net debt to underlying EBITDA) improved to 1.3x at 31
March 2022, from 2.0x at 31 March 2021, largely driven by increased
cash generation, expansion in underlying EBITDA and receipts of
$550m from mobile money minority investments. Our balance sheet
continued to be de-risked through a reduction of HoldCo debt (now
$1bn, down from $2.4bn in the prior year) and increased
localisation of our debt into the OpCos, such that our gross OpCo
debt of $2,921m (including lease obligations) is now significantly
higher than our HoldCo debt of $1,000m.
Other significant updates
Full payment service bank licence in Nigeria
In April 2022, Airtel Africa's subsidiary SMARTCASH Payment
Service Bank Limited ('Smartcash') was granted final approval to
operate a payment service bank ('PSB') business in Nigeria.
The PSB licence is required for Airtel to provide mobile
financial services in Nigeria, such as accepting cash deposits and
carrying out payments and remittances, issuing debit and prepaid
cards, operating electronic wallets and rendering other financial
services.
Full super-agent licence in Nigeria
On 14 November 2021, Airtel Africa's subsidiary Airtel Mobile
Commerce Nigeria Ltd was granted approval in principle by the
Central Bank of Nigeria to operate as a super-agent in Nigeria.
This was subsequently upgraded to approval for a full super-agent
licence in April 2022.
Under the super-agent licence, we are able to create an agent
network that can service the customers of licensed Nigerian banks,
payment service banks and licenced mobile money operators in
Nigeria.
Early Bond redemption
In March 2022, the Group confirmed that it had completed the
early repayment of its $505m 5.125% Guaranteed Senior Notes,
originally due in March 2023, using cash balances available at
Group level.
Settlement included all outstanding accrued interest up to the
redemption date of 7 March 2022. One-off costs of $19m, including
applicable premium, have been recorded under non-operating
exceptional items, while the Group will save an aggregate of c.$26m
on interest payments from early redemption.
Since the time of the IPO in June 2019, Airtel Africa has
successfully pursued a strategy of strengthening its balance sheet
through both deleveraging and reducing its US dollar debt exposure.
Over this period the Group has reduced its USD HoldCo debt by
c.$1.7bn and improved its leverage ratio to 1.3x net debt to
underlying EBITDA at 31 March 2022. Following this early repayment
of senior notes, the Group now has only $1bn of bonds remaining at
HoldCo level, due in May 2024.
Completion of Airtel Nigeria minority buyout offer
On 2 December 2021, further to the buyout offer announcement on
4 October 2021, Airtel Africa announced the completion of the
minority shareholding buyback of Airtel Networks Limited ('Airtel
Nigeria'), a subsidiary of Airtel Africa plc and a leading provider
of telecommunication services in Nigeria.
The purchase consideration for the 8.22% minority shareholdings
acquired under the buyback was NGN 67.6bn, equivalent to $163m,
including directly attributable transaction costs.
NIN - SIM linkage registration rules in Nigeria
Following a directive issued by the Nigerian Communications
Commission (NCC) on 7 December 2020 to all Nigerian telecom
operators, Airtel Nigeria has been working with the government to
ensure that all our subscribers provide their valid National
Identification Numbers (NINs) to update SIM registration records.
To complete the registration process, we must link the NIN
information received with the SIM of the respective subscribers and
share the same with the National Identity Management Commission
(NIMC).
The original regulatory directive set an initial deadline for
customers to register (link) their NIN with their SIM of 30
December 2020. This was subsequently moved several times, with the
last deadline being 31 March 2022. Airtel Nigeria was subsequently
notified that with effect from 4 April 2022, all SIMs that have not
been linked to a NIN were to be placed on 'receive only' status,
meaning all their outgoing calls have been barred with immediate
effect.
Subscribers of such lines can still link their SIMs to their
NINs in order that these restrictions can be lifted. Customers have
therefore been given a final opportunity to fully comply with the
latest registration requirements.
We have made significant progress on capturing the NINs of our
customers and building the database in collaboration with the NIMC.
As at the end of April 2022, we have collated NIN information for
35.9 million active customers. Outgoing voice revenues for those
active subscribers who have not yet linked their NIN with their SIM
amounts to around 7% of total revenues from Nigeria, and around 3%
of total revenues for the Group. However, our experience of
adopting similar procedures in other countries suggests that SIM
registration is accelerated, and some SIM consolidation is likely
to occur in response to implementation, potentially reducing any
financial impact. As at the end of the year, Airtel Nigeria had an
active customer base of 44.4 million and posted revenue of
$1,878m.
We continue to work closely with the regulator and impacted
customers to help them to comply with the registration
requirements, making every effort to minimise disruption and ensure
affected customers can continue to benefit from full-service
connectivity as soon as possible; in line with our aim to drive
increased connectivity and digital inclusion across Nigeria.
Kenya spectrum licences
On 7 March 2022, the Group announced that its Kenya subsidiary,
Airtel Kenya Networks Limited ('Airtel Kenya'), had entered into
agreements with the Communications Authority of Kenya regarding its
operating and spectrum licences, and received approval for the
replacement of its temporary licence with a ten-year frequency
licence for 2x10 MHz of spectrum in the 2100 MHz band, as
follows:
-- In respect of agreements regarding 2015-2025 operating and
spectrum licences, Airtel Kenya will pay a total of c.$20m in four
instalments over the next three years.
-- In respect of the 2x10 MHz licence, 2022-2032, Airtel Kenya
has agreed and paid for a ten-year licence for $10m.
Airtel Kenya is one of the Group's largest markets by revenue,
and from FY'19 to FY'22 grew revenues by 22.2% CAGR. This $30m
investment reflects our continued confidence in the tremendous
opportunity inherent in the Kenya market.
Uganda listing obligation
Under Article 16 of Uganda's National Telecom Operator ('NTO')
licence, Airtel Uganda limited is obliged to comply with the sector
policy, regulations and guidelines requiring the listing of part of
its shares on the Uganda Stock Exchange. The current Uganda
Communications (Fees & Fines) (Amendment) Regulations 2020,
creates a public listing obligation for all NTO licensees, and
specifies that 20% of the shares of the operator must be listed
within two years of the date of the effective date of the licence.
Currently, this imposes a listing requirement by 15 December 2022
on Airtel Uganda. On 5(th) April 2022 we applied to the Uganda
Communications Commission for an extension on the deadline for a
period of one year.
Tower sales
On 25 March 2022 and 3 November 2021, Airtel Africa announced
the first closings of transactions to sell its telecommunications
tower companies in Malawi and Madagascar respectively, to Helios
Towers plc, a leading independent telecommunications infrastructure
company in Africa.
On 5 January 2022, Airtel Africa announced the first closing of
the transaction to sell its telecommunications tower assets in
Tanzania to a joint venture company owned by a wholly-owned
subsidiary of SBA Communications Corporation, a leading global
independent owner and operator of wireless communications
infrastructure, as majority owner, and by Paradigm Infrastructure
Limited, a UK company focused on developing, owning and operating
shared passive wireless infrastructure in selected growth
markets.
The gross considerations for these transactions are $55m in
Malawi, $52m in Madagascar, and $177m in Tanzania. Loss of tower
sharing revenue as a result of the sale of these towers amounted to
$29m per annum. As a result of the tower sales across our OpCos the
Group recorded a gain of $111m.
Under the terms of these tower transactions, Airtel Africa's
subsidiaries in the respective countries will continue to develop,
maintain and operate its equipment on the towers under separate
lease arrangements with the purchaser.
In March 2021, the Group also announced memorandum of
understanding arrangements with Helios Towers for the potential
sale of its tower assets in Chad and Gabon. In February 2022,
Airtel Africa announced that it had agreed an extension to their
memorandum of understanding arrangement with Helios Towers in
Gabon, with completion still subject to Helios Towers obtaining a
passive infrastructure licence. The memorandum of understanding
arrangement relating to tower assets in Chad expired in February
2022, and Airtel Africa and Helios Towers have mutually agreed that
this would not be renewed.
Strategic investments in our mobile money business
Following earlier similar announcements of investments in our
mobile money business of $200m by TPG's The Rise Fund and $100m by
Mastercard (made on 18 March 2021 and 1 April 2021 respectively) in
July 2021, Airtel Africa signed agreements with Qatar Holding LLC,
an affiliate of the Qatar Investment Authority ('QIA'), regarding
their investment of $200m in Airtel Mobile Commerce BV ('AMC BV'),
a subsidiary of Airtel Africa plc. AMC BV is the holding company
for several of Airtel Africa's mobile money operations; and
ultimately is intended to own and operate the mobile money
businesses across all of Airtel Africa's 14 operating
countries.
On 2 August 2021 and 20 August 2021 Airtel Africa announced
first closings relating to the Airtel Money minority investment
transactions with TPG's The Rise Fund and Mastercard, and
subsequently with Qatar Holding LLC respectively. Upon first
closings, The Rise Fund, Mastercard and QIA invested $150m, $75m
and $150m respectively in a secondary purchase of shares in AMC BV
from a subsidiary of Airtel Africa, and both QIA and TPG each
appointed a director to the board of AMC BV.
In November 2021, Airtel Africa announced second closings
relating to these Airtel Money minority investment transactions,
with a further $50m, $25m and $50m invested into AMC BV by The Rise
Fund, Mastercard and QIA respectively.
In December 2021, Airtel Africa announced the introduction of
Chimera Investment LLC as an additional investor in AMC BV through
a $50m secondary purchase of shares from a subsidiary of Airtel
Africa plc. Chimera Investment LLC (through its subsidiary
Chimetech Holding Ltd.) now holds minority stakes in AMC BV
alongside the other minority investors, with Airtel Africa
continuing to hold the majority stake.
These transactions are a continuation of the Group's pursuit of
strategic asset monetisation and investment opportunities, and it
is the aim of Airtel Africa to explore the potential listing of the
mobile money business within four years from first closing.
Airtel Africa has now received a total of $550m cumulative
proceeds from minority stake sales in Airtel Money from the four
investors. As previously reported, the proceeds from these
secondary stake sale transactions were used for repayment of Group
debt and for investment in network and sales infrastructure in the
respective operating countries.
Launch of sustainability strategy
Within our Full Year Results announcement in May 2021, we
highlighted that we would publish the measurable medium to
long-term sustainability goals we set ourselves. In the first six
months of this financial year, we identified the programmes needed,
along with key milestones towards these goals. We also conducted a
consultation progress with our stakeholders to gather feedback and
further inform our sustainability strategy.
In October 2021, Airtel Africa launched an ambitious
sustainability strategy that underpins our well-established
corporate purpose of 'Transforming Lives.' The strategy
demonstrates our commitment to developing the infrastructure and
services that will drive both digital and financial inclusion for
people across Africa and provides a framework to contribute to six
of the United Nations' Sustainable Development Goals ('SDGs') where
we believe we can have the biggest impact. These are SDG 4:
Delivering quality education;
SDG 5: Gender equality; SDG 8: Decent work and economic growth;
SDG 9: Industry innovation and infrastructure; SDG 10: Reduced
inequalities; and SDG 12: Responsible consumption and
production.
The launch of our sustainability strategy builds upon the
Group's sustainability framework, announced with the FY'21 results,
with its four key pillars of 'Our business', 'Our people', 'Our
communities' and 'Our environment', and the strong foundations of
the work we are already doing at a Group level and across all our
local operations. The new sustainability strategy covers every
aspect of our business activities, and has environmental, social
and governance criteria at its core.
The sustainability strategy includes nine goals and commitments,
with corresponding programmes that address the business' material
topics (identified through an extensive consultation at the
beginning of the year) and enable the Group to continue delivering
sustainable growth and uphold the best governance standards:
-- Data security goal: Establish industry-leading data security
for our customers; through investments in technology and expertise,
updated processes and consumer awareness - with focus areas around
confidentiality, integrity and availability.
-- Service quality goal : Provide underserved communities with access to reliable networks and connectivity; through the rollout of new infrastructure and technology, improved fibre connectivity and capacity - with focus areas on service accessibility, delivery and reliability.
-- Supply chain goal: Ensure all our suppliers are aligned with
our sustainability agenda; through programmes to increase supplier
disclosure and audit ESG performance - with focus areas on enhanced
supplier due diligence and ongoing ESG compliance.
-- Commitments to our people: with our ambition to provide
rewarding employment opportunities and to achieve genuine diversity
and inclusion at all levels across the business through four key
commitments:
o Delivering equality in our workforce; through recruitment and
programmes to provide training and advancement for everyone
regardless of gender, nationality or disability;
o Providing best practice training and development; through
upskilling and reskilling initiatives to ensure they can succeed in
their future careers. And through supporting female entrepreneurs
through training and increasing women's participation in the
technology and engineering sectors;
o Providing the highest standards of health and safety for our
employees and contractors; through the introduction of a best
practice social and health and safety management system, improved
policies and full compliance with all legislation and regulation;
and,
o Maintaining the highest levels of employee engagement; through
the introduction of additional channels that provide every one of
our people with a voice.
-- Digital inclusion goal : significantly improve digital
Inclusion across Africa; by driving the penetration of mobile,
smartphones and home broadband in rural areas through the provision
of retail and support services.
-- Financial inclusion goal : significantly increase financial
inclusion in Africa, with particular support for women; through the
development of affordable financial products to meet the needs of
the un- and under-banked, a reliable service and financial
confidence and literacy.
-- Access to education goal: helping transform the lives of over
one million children through improving access to education - with
programmes around connectivity, the provision of zero-rated
education content under a five-year UNICEF partnership, connecting
1,400 schools to the internet by 2027, and the adoption and support
of schools in all our markets.
-- Greenhouse gas emissions reduction goal: Our ambition is to
achieve net zero greenhouse gas ('GHG') emissions ahead of the 2050
deadline set out in the Paris Agreement. To do this we must fully
identify, measure and reduce our GHG emissions which can only be
achieved in partnership with our peers and the wider industry. We
will establish and launch a sector leading and credible
decarbonisation pathway in 2022, ahead of the publication of our
first Sustainability Report. In January 2022, we have engaged with
the Carbon Trust for their advice and assistance with several
aspects of our Greenhouse gas emissions measurement, management and
reporting.
-- Environmental stewardship: Eliminate hazardous waste from our
operations, significantly reduce our non-hazardous waste and
minimise our water consumption ; with programmes to replace
damaging materials, expand recycling schemes and build employees'
awareness around the protection of our natural resources.
Partnership with UNICEF
On 1 November 2021, Airtel Africa and UNICEF announced a
five-year pan-African partnership to help accelerate the roll-out
of digital learning through connecting schools to the internet and
ensuring free access to learning platforms across 13 countries. By
providing equal access to quality digital learning, particularly
for the most vulnerable children, the partnership will help to
ensure that every child reaches their full potential.
Airtel Africa is the first African private sector partner to
make a multimillion-dollar commitment to 'Reimagine Education', a
global initiative launched by UNICEF in 2020 calling for public and
private sector investment in digital learning as an essential
service for every child and young person across the globe. This
initiative aims to give children a chance to catch up on their
learning needs amid the ongoing global pandemic.
Airtel Africa's financial and in-kind contribution for this
partnership is $57m over five years to 2027. The programme will
call on technology and expertise, in addition to direct financial
support to connect schools and communities to the internet and
enable free access to online educational content for students. It
will also provide vital data insights to inform UNICEF's work to
scale-up digital learning and help ensure it is sustainable and
meets students' needs across Africa.
The Airtel Africa and UNICEF pan-African partnership will
benefit students in Chad, Congo, Democratic Republic of the Congo,
Gabon, Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Tanzania,
Uganda and Zambia.
Dividend policy
In October 2021, the Board approved an upgrade to the
progressive dividend policy as a result of continued strong
business performance and significant progress made in reducing the
leverage ratio. The new policy aims to grow the dividend annually
by a mid to high-single digit percentage from a new base of 5 cents
per share for FY'22, with a continued focus to further strengthen
the balance sheet.
The Board recommends a final dividend of 3 cents per share,
making total FY'22 dividends 5 cents per share including the
interim dividend of 2 cents per share, and in line with this
upgraded dividend policy.
Covid update
The Covid-19 pandemic contributed to a rapid acceleration of
already existing macro trends across the countries where we
operate, with people, businesses and governments seeking access to
more and better connectivity and improved financial inclusion.
These challenging times have shown that the telecoms industry is a
key and essential service for these economies, allowing customers
to work remotely, reduce their travel, keep connected and have
access to affordable entertainment and financial services.
Covid-19 presented significant challenges to the business,
particularly during the initial phase of the pandemic in Q1 last
year, when mobile money and mobile services growth both slowed.
However, the actions taken by the Board at that time enabled the
continued execution of our strategy, including meeting increased
customer demand for data, mobile money and mobile services.
Through multiple lockdowns and during times of national crisis
our people have kept our distribution channels available and our
networks fully operational. Our business partners have similarly
continued to deliver their services despite numerous logistical
challenges, and governments and regulators have continued to
support the industry and helped facilitate our continued support to
the economies of the countries and the communities we serve.
Several times through the pandemic, the governments in the
countries where we operate have acted swiftly to implement and
enforce restrictions on the movement of people to prevent
contagion. These swift actions, along with low population density
and relatively youthful population demographics, less frequent
travel, and local experience in dealing with contagious diseases,
have resulted in generally lower infection rates in sub-Saharan
Africa relative to some other regions. Around the world the
vaccination effort is well under way, with a significant easing of
social distancing rules and travel restrictions, although Africa
lags most developed economies in attaining full vaccination
cover.
Despite the resilience demonstrated by our business during the
last two years, we are constantly monitoring how the situation is
evolving to identify key risks and to put in place adequate
mitigation plans to minimise any potential disruptions.
The Group will continue to focus on ensuring the safety of our
employees, our outsourced partners and our customers; ensuring that
our network and distribution channels remain fully operational and
available; ensuring that our customers continue to have access to
financial services and ensuring that at Group level we are in the
right financial position to meet our financial obligations at all
times.
New shareholding requirements in Kenya
On 9 April 2021, the Minister for ICT in Kenya published an
amendment to the National Information Communications and Technology
(ICT) Policy Guidelines, 2020 (ICT Policy). The ICT Policy
amendment will affect Airtel Africa's Kenya business as
follows:
-- Airtel Networks Kenya Limited, which currently holds an
indefinite exemption from the Minister for ICT, dated 20 March
2013, has three years with effect from 9 April 2021 to comply with
the requirement to have a 30% local shareholding.
-- Airtel Money Kenya Limited, which holds a Content Service
Provider Licence from the Communications Authority of Kenya, with
effect from November 2020, has three years from the date of the
licence to comply with the requirement to have a 30% local
shareholding.
Under the amended ICT policy, a licensee may apply to the ICT
Minister for an extension of time to comply with the requirement,
or to obtain an exemption.
Appointment of new CEO, and other Board appointments and
changes
On 29 April 2021, Airtel Africa announced that Olusegun 'Segun'
Ogunsanya, managing director and chief executive officer Airtel
Nigeria was to succeed Raghunath 'Raghu' Mandava, as managing
director and chief executive officer following Raghu Mandava's
informing the Board of his intention to retire. Segun Ogunsanya
joined the Board of Airtel Africa plc with effect from 1 October
2021.
Segun Ogunsanya joined Airtel Africa in 2012 as managing
director and chief executive officer Airtel Nigeria and has been
responsible for the overall management of our operations in
Nigeria, our largest market in Africa. Segun has more than 25
years' business management experience in banking, consumer goods
and telecoms. Before joining Airtel in 2012, Segun held leadership
roles at Coca-Cola in Ghana, Nigeria, and Kenya (as managing
director and chief executive officer). He has also been the
managing director of Nigerian Bottling Company Ltd (Coca-Cola
Hellenic owned) and Group head of retail banking operations at
Ecobank Transnational Inc, covering 28 countries in Africa. He is
an electronics engineer and also a chartered accountant.
Raghu Mandava has retired as managing director and chief
executive officer, as a director of Airtel Africa plc and as a
member of the Market Disclosure Committee as of 30 September 2021.
Following his cessation of employment at Airtel Africa, Mr. Mandava
remains available to advise the Chairman, the Airtel Africa Board
and the newly appointed managing director and chief executive
officer for a nine-month period.
Jaideep Paul, chief financial officer, was appointed as an
executive director and joined the Board of Airtel Africa plc with
effect from 1 June 2021.
On 12 October 2021, Airtel Africa announced the appointment of
Ms Tsega Gebreyes to the Board as an independent non-executive
director, with immediate effect.
New administrative office in Dubai
Airtel Africa plc has opened a new office in Dubai, adding to
its existing administrative office locations in Nairobi, London,
Amsterdam and Delhi.
The executive committee of Airtel Africa plc now operates out of
the new office, which provides for significantly improved
connectivity and enhanced cooperation with our 14 operating markets
across Africa and with our other administrative offices.
Information on additional KPIs
An investor relations pack with information on the additional
KPIs and balance sheet is available to download on
our website at airtel.africa/investors.
Strategic overview
The Group provides telecoms and mobile money services in 14
emerging markets of sub-Saharan Africa. Our markets are
characterised by huge geographies with relatively sparse
populations, high population growth rates, high proportions of
youth in the population, low smartphone penetration, low data
penetration and relatively unbanked populations. Unique mobile user
penetration across the Group's footprint is around 47%, and banking
penetration remains under 50%. These indicators illustrate the
significant opportunity still available to Airtel Africa to enhance
both digital and financial inclusion in the communities we serve,
enriching and transforming their lives through digitalisation at
the same time as growing our revenues profitably, across each of
our key services of voice, data and mobile money.
The Group continued to invest in its network and distribution
infrastructure to enhance both mobile connectivity and financial
inclusion across our countries of operation. In particular, we
continued to invest in expanding our 4G network footprint to
increase data capacity in our networks to support future business
growth, as well as deploying new sites, especially in rural areas,
to enhance coverage and connectivity.
We describe our 'Win with' strategy through six strategic
pillars. Our customers lie at the core of our strategy, through our
fundamental purpose around transforming lives.
Our focus on digitalisation, of both our products and services
and our internal systems and processes, increasingly functions as a
catalyst, or an 'accelerator', for each of our strategic
pillars.
Underpinning our Group strategy is our sustainability platform,
describing our continued commitment to both driving sustainable
development and acting as a responsible business. We launched our
sustainability strategy earlier this year, describing our
commitment to developing the infrastructure and services that will
drive both digital and financial inclusion for people across Africa
and provides a framework to describe our contribution to the United
Nations' Sustainable Development Goals ('SDGs'). We have four key
pillars within our sustainability framework: 'Our business', 'Our
people', 'Our communities' and 'Our environment'; and we have nine
summary goals and commitments, along with corresponding programmes
that address each of the 'material' identified topics of the
business, covering data security, service quality, supply chain,
people commitments, digital inclusion, financial inclusion, access
to education, greenhouse gas emissions reduction and environmental
stewardship.
This year, we continued to make strong progress across each of
our core strategic pillars: 'Win with network', 'Win with
distribution' (renamed from the previous 'Win with customers'),
'Win with data', 'Win with mobile money', 'Win with cost' and 'Win
with people'.
Win with network
The Group aims to continually provide a best-in-class network
experience, including internet experience, to customers. We
continued to invest in our network by expanding 4G coverage and
building capacity to cater for the future needs of our customers
and to continue providing them with high-speed data. Our expansion
of 4G network capability across our footprint and connecting rural
areas through deployment of new sites continued to be our two key
focus areas. Our investment in the 4G network through single RAN
technology has resulted in both expansion of our 4G coverage and
enhanced network capacity. At the end of FY'22, 87.6% of our total
sites are now on 4G, compared to 76.5% in the previous year. We are
building a leading, modernised network that can provide the data
capacity to meet rapidly growing demand, and enhanced connectivity
and digitalisation needs of our markets. Our network data capacity
has increased by 40.4% year on year, reaching 16,900+ TB per day,
with additional capacity being added at only very marginal cost. We
continued to modernise our network across all our countries of
operation, with 96% of our sites now on single RAN.
The Group has added almost 10,000 km of additional fibre in the
year, with total fibre now more than 64,500km.
The Group has also added additional spectrum in a few of our
markets. We have added 10 MHz in the 2600 band in Malawi and 10 MHz
in the 2100 band in Kenya. These allocations will help us to
maximise network capacity and coverage.
Capital expenditure related to investment activities during
FY'22 was $656m, excluding spectrum acquisitions and licence
renewals.
Win with distribution (formerly named 'Win with customers')
Sub-Saharan Africa is characterised by low penetrated markets,
with unique subscriber penetration at 47%. The Group's strategy is
to build assured availability of service through deployment of
exclusive retail footprint and ensuring sufficient resourcing to
drive revenue generation at each distribution site.
The Group continued to build a unique mix of multi-brand and
exclusive franchise channels, combined with a simplified and
enhanced self-service app to provide a seamless customer onboarding
experience. These have enabled us to add customers, resulting in
customer base growth of 8.7% year on year (excluding Nigeria the
customer base grew by 10.2%). This has also helped us to grow voice
revenue by 15.4% in constant currency.
The Group continued its investment in strengthening our
distribution network infrastructure, with a focus on rural
distribution networks. During the period, the Group expanded its
exclusive franchise stores, adding more than 15,000+ kiosks and
mini-shops (taking the total to almost 53,000) across our
footprint. The Group also added more than 43,000 activating
entities in the year, up by 21%.
Win with data
The Group continued to invest in the expansion of our 4G
network, adding significant data capacity to the network at only
marginal cost, expanding both home broadband and enterprise
business services to greater leverage the 4G network capacity;
growing data ARPU and data revenue. We continue to focus on
increasing smartphone ownership and increasing data usage at scale,
largely via smartphone offerings through OEM (Original Equipment
Manufacturer) device partnerships, and through expanding our
network of smartphone device selling outlets.
Our improved 4G network supported our drive to increase
smartphone penetration, data customer penetration and the uptake of
larger data volumes, resulting in greater data consumption per
customer. Smartphone penetration was up by 1.2 percentage point to
34.2% and our data customer base grew by 15.2%, now representing
36.4% of our total customer base.
Data usage per customer reached 3.4 GB per month (from 2.6 GB)
led by an increase in smartphone penetration and expansion of our
home broadband and enterprise customers. This helped us to grow
data revenue by 34.6% in constant currency. Growing penetration and
the data usage of customers (particularly 3G and 4G) helped us to
grow data ARPU by 18.6%. 4G data usage constituted 66.7% of total
data usage on the network in FY'22 with 4G data usage per customer
reaching 5.5 GB per month in FY'22, up by 10.7% on FY'21.
Win with mobile money
The Group has continued to drive financial inclusion. The low
penetration of traditional banking services across our footprint
leaves a large number of unbanked customers whose needs can be
largely fulfilled through mobile money services. We aim to drive
the uptake of Airtel Money services in all our markets, harnessing
the ability of our profitable mobile money business model to
enhance financial inclusion in some of the most 'unbanked'
populations in the world.
The Group continued to expand our exclusive distribution network
of kiosks, mini-shops and Airtel Money branches, so that customers
can access their cash with relative ease. We have increased the
number of kiosks and mini-shops by 40.0% and Airtel money branches
by almost 60%. Additionally, we have increased the number of
(non-exclusive) mobile money agents by 41.7%. Throughout the year,
the expansion of our mobile money product portfolio, both through
partnerships with leading financial institutions and through
expansion of our merchant ecosystem, have further strengthened our
mobile money propositions.
Our distribution expansion and enhanced offerings helped drive
20.7% growth in our mobile money customer base, now serving over
26.2 million customers and representing 20.4% of our total customer
base (31.1% excluding Nigeria).
Mobile money continues to be one of our fastest growing
services, delivering revenue growth of 34.9% in FY'22. It is an
increasingly important part of our business, delivering $64.4bn of
annual transaction value and accounting for 11.7% of total revenue
in FY'22.
Mobile money ARPU increased by 12.2% in FY'22, driven by
increased transaction values and higher contributions from merchant
payments, cash transactions, P2P transfers and mobile services
recharges through Airtel Money.
Win with cost
Our operating cost model is focused on enhancing cost efficiency
through changes in the operating design and digitalisation
initiatives. We embrace robust cost discipline and continuously
seek to improve our processes to reduce operating costs, delivering
one of the highest underlying EBITDA margins in the industry. We
also use the latest technology to optimally design our networks and
improve our capital expenditure efficiency; enabling us to build
large incremental capacities at lower marginal cost.
As we continued to expand our business, various cost efficiency
initiatives were undertaken during the period, relating mainly
to:
(i) reduced operating costs at sites due to single RAN; (ii)
optimisation of incremental network/site requirements through
efficient spectrum utilisation (iii) remodelling our managed
services through diversification of supply; and (iv) bandwidth
capacity optimisation and implementation of dynamic and contextual
interactive voice recognition ('IVR') for more efficient customer
interactions.
These have contributed to an expansion of our underlying EBITDA
margin by 294 basis points in reported currency and 296 basis
points in constant currency. Our underlying EBITDA margin was 49.0%
for FY'22, and our operating expenditure as a percentage of revenue
improved by 3.0 percentage points.
Win with people
Our values of being Alive, Inclusive and Respectful, underpin
our vision of being a responsible employer. We work in highly
collaborative teams across the 18 countries in which we have
operations or offices, and with 35 different nationalities
represented.
Our talented and diverse people have continued to demonstrate
incredible dedication and resilience. Their commitment to our
business and customers has been a key driver to our long-term
growth and as we continue to transform lives in the markets we
serve.
Diversity and inclusion remain a key focus area for our
business. We made further progress this year with 28% of our ExCo
(including OpCos) now being women, up by 5.0 percentage points,
with women representing 26% of our total workforce. And we
continued to expand financial and digital inclusion to the
communities we serve.
Investing in opportunities for learning and development of our
people across all our operations has been accelerated through the
launch of several digital platforms. Building and maintaining
strong functional expertise and capability is a key driver of our
performance.
We are committed to employee engagement and upward feedback
through regular market visits, town-halls and open mic sessions,
which enable us to understand issues that really matter to our
colleagues, our workplaces and business operations.
Our reward system is based on simple and consistent metrics that
drive a high-performance culture and our people performance metrics
are aligned to our business priorities.
We continue to make strides to be an employer of choice with a
diverse and inclusive work environment.
Financial review for the year ended 31 March 2022
Nigeria
Description Unit Year ended Quarter ended
of
measure
---------------------- ---------- ---------------------------------------- ----------------------------------------
Mar-22 Mar-21 Reported Constant Mar-22 Mar-21 Reported Constant
currency currency currency currency
change change change change
% % % %
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Summarised statement
of operations
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Revenue $m 1,878 1,552 21.0% 27.7% 507 422 20.0% 24.2%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue
(1) $m 985 897 9.8% 15.9% 268 240 11.7% 15.6%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 734 549 33.7% 41.1% 194 152 28.0% 32.5%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Other revenue
(1) $m 159 106 50.0% 58.2% 44 30 46.0% 51.1%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Underlying EBITDA $m 1,037 839 23.6% 30.4% 279 232 20.6% 24.8%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Underlying EBITDA 115 114
margin % 55.2% 54.1% bps bps 55.1% 54.8% 27 bps 25 bps
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Depreciation
and amortisation $m (268) (236) 13.2% 19.5% (71) (60) 19.8% 23.8%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating exceptional $m - - - - - - - -
items
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating profit $m 769 602 27.8% 34.8% 208 172 21.4% 25.7%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Capex $m 251 275 (8.8%) (8.8%) 69 97 (28.9%) (28.9%)
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating free
cash flow $m 786 564 39.3% 50.7% 210 135 56.2% 64.3%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating KPIs
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
ARPU $ 3.8 3.0 26.1% 33.0% 3.9 3.3 18.7% 22.9%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Total customer
base million 44.4 42.0 5.8% 44.4 42.0 5.8%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data customer
base million 20.3 17.7 14.9% 20.3 17.7 14.9%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
(1) Voice revenue includes inter-segment revenue of $1m and
other revenue includes inter-segment revenue of $2m in the year
ended 31 March 2022. Excluding inter-segment revenue, voice revenue
was $984m and other revenue was $157m in the year ended 31 March
2022.
Reported currency revenue grew by 21.0% to $1,878m with constant
currency growth of 27.7%. The differential in growth rates was due
to devaluation of the Nigerian naira by 5.6%. The constant currency
revenue growth of 27.7% was driven by both customer base growth of
5.8% and ARPU growth of 33.0% largely driven by higher data and
voice usage.
Voice revenue grew by 15.9%, driven by an increase in voice
usage per customer of 20.8% which led to an ARPU increase of 20.7%.
Customer base growth was affected by the NIN-SIM linkage
regulations in Nigeria during the first half of the year but
returned to growth, adding 4 million customers in the second half
of the year, achieving net growth of 2.4 million customers over the
full year. The number of regulatory approved outlets expanded to
over 19,100 as of 31 March 2022.
Data revenue grew by 41.1% in constant currency, driven by data
customer base growth of 14.9% and data ARPU growth of 37.6%, led by
growth in data usage per customer to 4.0 GB per month (from 2.8 GB
in the prior year). Our continued 4G network expansion and
increased smartphone penetration has supported data usage growth.
Almost 99% of our sites in Nigeria are now delivering 4G, and
smartphone penetration of our customers has increased by almost 1
percentage point. Data revenue accounted for 39.1% of total revenue
in Nigeria in the year, up by 3.7% on the prior year. For Q4'22,
43.6% of our data customer base were 4G users, contributing to
76.0% of total data usage. Data usage per customer reached 4.2 GB
per month and 4G data usage per customer reached 6.5 GB per month,
a significant increase on the 4.6 GB usage per customer per month
of Q4'21.
Other revenue grew by 58.2%, with the main contribution coming
from the growth in value added services revenue, led by airtime
credit services.
Underlying EBITDA was $1,037m, growing by 23.6% in reported
currency and representing constant currency growth of 30.4%.
Underlying EBITDA margin improved to 55.2%, an increase of 115
basis points in reported currency and 114 basis points in constant
currency, as a result of improvements in operational
efficiency.
Operating free cash flow was $786m, up by 50.7%, due to the
expansion of underlying EBITDA.
East Africa (1)
Description Unit Year ended Quarter ended
of
measure
---------------------- ---------- ---------------------------------------- ----------------------------------------
Mar-22 Mar-21 Reported Constant Mar-22 Mar-21 Reported Constant
currency currency currency currency
change change change change
% % % %
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Summarised statement
of operations
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Revenue (2) $m 1,717 1,381 24.3% 22.7% 436 358 21.9% 17.9%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue
(3) $m 783 650 20.3% 19.2% 196 164 19.4% 16.3%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 457 354 29.1% 27.4% 118 92 28.1% 24.2%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile money revenue
(4) $m 411 291 41.5% 37.1% 111 79 39.9% 31.5%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Other revenue
(3) $m 152 150 1.1% 1.6% 34 38 (10.0%) (10.7%)
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Underlying EBITDA $m 848 631 34.4% 31.6% 218 168 29.4% 23.8%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Underlying EBITDA 369 331 291 238
margin % 49.4% 45.7% bps bps 49.9% 47.0% bps bps
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Depreciation and
amortisation $m (240) (221) 8.7% 7.9% (60) (57) 6.4% 4.1%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating exceptional
items (5) $m (32) - - - (32) - - -
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating profit $m 576 408 41.0% 36.8% 126 111 12.6% 4.6%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Capex $m 271 249 8.8% 8.8% 111 81 36.5% 36.5%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating free
cash flow $m 577 382 51.1% 46.8% 107 87 22.8% 11.6%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating KPIs
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
ARPU $ 2.5 2.3 12.2% 10.7% 2.6 2.3 12.5% 8.8%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Total customer
base million 57.2 53.1 7.8% 57.2 53.1 7.8%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data customer
base million 18.3 16.2 12.9% 18.3 16.2 12.9%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile money customer
base million 21.7 18.0 20.5% 21.7 18.0 20.5%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
(1) The East Africa business region includes Kenya, Malawi,
Rwanda, Tanzania, Uganda and Zambia.
(2) Revenue includes intra-segment eliminations of $85m for the
year ended 31 March 2022 and $64m for the prior year.
(3) Voice revenue includes inter-segment revenue of $1m and
other revenue includes inter-segment revenue of $6m in the year
ended 31 March 2022. Excluding inter-segment revenue, voice revenue
was $782m and other revenue was $146m in the year ended 31 March
2022.
(4) Mobile money revenue post intra-segment eliminations with
mobile services was $326m for the year ended 31 March 2022 and
$227m for the prior year.
(5 ) Operating exceptional items of $32m in the year ended 31
March 2022 consist of $12m provision for expected settlement of a
contractual dispute in which one of the Group's subsidiaries is a
party and $20m cost of agreeing historical spectrum fees in one of
the Group's subsidiaries.
East Africa revenue in reported currency grew by 24.3% to
$1,717m with constant currency revenue growth of 22.7%. This growth
was delivered across all key services; voice revenue grew by 19.2%,
data revenue by 27.4% and mobile money revenue by 37.1% in constant
currency. Reported currency revenue growth was slightly higher than
constant currency rates due to currency appreciation in the Ugandan
shilling and Zambian kwacha, partially offset by currency
devaluation in the Malawian kwacha.
Voice revenue grew by 19.2%, driven by both customer base growth
of 7.8% and voice ARPU growth of 7.5%. The customer base growth was
largely driven by expansion of both network coverage and the
distribution network. Voice usage per customer increased by 5.8% to
349 minutes per customer per month, thereby driving voice ARPU
growth of 7.5%.
Data revenue grew by 27.4%, largely driven by data customer base
growth of 12.9% and data ARPU growth of 5.6%. We continued to
invest in our network and expanded our 4G network infrastructure
which helped us to grow both data usage and the data customer base.
The data customer base increased 12.9% to 18.3 million, with 4G
customers accounting for 40.5% of our total data customer base and
contributing 60.2% of total data usage. 85.8% of our total sites
are now on 4G, compared with 76.4% at the end of the prior year.
Data usage per customer reached 3.3 GB per customer per month, up
by 22.1%.
Mobile money revenue was up by 37.1%, largely driven by growth
in Zambia, Uganda and Malawi. The mobile money customer base grew
by 20.5% and mobile money ARPU increased by 14.5%, due largely to
expansion of our distribution network. The transaction value per
customer reached $183 per customer per month, up by 16.0% from $153
per customer per month in the prior year. The slowdown in mobile
money revenue growth was due to implementation of additional levies
by the Government of Tanzania on mobile money withdrawal and P2P
transactions from July 2021, which were subsequently revised
downwards in early September 2021.
The underlying EBITDA margin reached 49.4%, an improvement of
331 basis points in constant currency, as a result of strong
revenue growth and improvements in operating efficiency.
Operating free cash flow was $577m, up by 46.8% due largely to
the expansion of underlying EBITDA.
Francophone Africa (1)
Description Unit Year ended Quarter ended
of
measure
---------------------- ---------- ---------------------------------------- ----------------------------------------
Mar-22 Mar-21 Reported Constant Mar-22 Mar-21 Reported Constant
currency currency currency currency
change change change change
% % % %
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Summarised statement
of operations
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Underlying revenue
(2) $m 1,131 964 17.2% 17.2% 282 260 8.4% 12.2%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue
(3) $m 594 541 9.9% 10.0% 148 143 3.3% 7.3%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 334 254 31.5% 31.0% 84 70 18.9% 22.6%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
revenue (4) $m 142 110 29.0% 29.6% 36 31 17.7% 22.6%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Other revenue
(3) $m 104 96 8.9% 8.3% 26 25 3.6% 5.3%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Underlying EBITDA $m 464 364 27.6% 27.7% 118 110 7.4% 10.8%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Underlying EBITDA 332 337 (39) (53)
margin % 41.0% 37.7% bps bps 41.7% 42.1% bps bps
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Depreciation
and amortisation $m (203) (207) (2.0%) (2.1%) (48) (52) (8.6%) (5.8%)
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating exceptional
item (5) $m 0 14 - - 0 1 - -
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating profit
(5) $m 261 170 53.7% 54.6% 70 59 20.1% 24.8%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Capex $m 125 88 42.0% 42.0% 42 32 30.5% 30.5%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating free
cash flow $m 339 276 23.0% 23.1% 76 78 (2.1%) 2.6%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating KPIs
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
ARPU $ 3.7 3.8 (1.9%) (1.9%) 3.6 3.9 (8.2%) (5.0%)
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Total customer
base million 26.8 23.1 15.9% 26.8 23.1 15.9%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data customer
base million 8.2 6.7 21.3% 8.2 6.7 21.3%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
customer base million 4.4 3.6 21.8% 4.4 3.6 21.8%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
(1) The Francophone Africa business region includes Chad,
Democratic Republic of the Congo, Gabon, Madagascar, Niger,
Republic of the Congo, and Seychelles.
(2) Underlying revenue includes intra-segment eliminations of
$44m for the year ended 31 March 2022 and $36m for the prior year.
It also excludes one-time exceptional revenue of $20m relating to a
settlement in Niger in the year ended 31 March 2021.
(3 () Voice revenue includes inter-segment revenue of $2m in the
year ended 31 March 2022. Excluding inter-segment revenue, voice
revenue was $592m in the year ended 31 March 2022.
(4 () Mobile money revenue post intra-segment eliminations with
mobile services was $98m in the year ended 31 March 2022 and $74m
in the prior year.
(5) Operating exceptional items in the prior year include
exceptional revenue relating to a one-time settlement in Niger for
$20m partially offset by one-off cost of $6m in Francophone
Africa.
Underlying revenue grew by 17.2% both in reported currency and
in constant currency. This growth was largely driven by DRC, Chad,
Niger and Gabon. The slight currency devaluation of the Central
African franc was offset by appreciation in the Seychelles
rupee.
Voice underlying revenue grew by 10.0% in constant currency,
driven by customer base growth of 15.9% partially offset by voice
ARPU decline of 7.9%. The ARPU decline was mainly driven by
reductions in international call revenue and local incoming call
revenue (the latter due to changes in local interconnect rates in
Gabon, Niger and Republic of the Congo). The customer base growth
was driven by expansion of both network coverage and distribution
infrastructure.
Data revenue grew by 31.0% in constant currency, supported by
both customer base growth of 21.3% and data ARPU growth of 1.3%. We
continued to expand our 4G network (65.3% of sites now on 4G) and
data network coverage, and we enhanced our distribution
infrastructure supporting further growth of the data customer base.
30.5% of the Francophone Africa customer base now use data
services. 4G data usage contributes 64.1% of total data usage and
44.8% of data users were 4G customers. Data usage per customer was
2.4 GB per month (up 23.1% on the prior year) while 4G data usage
per customer reached 4.5 GB (up 3.4%).
Mobile money revenue grew by 29.6% in constant currency, driven
by both customer base growth of 21.8% and mobile money ARPU growth
of 5.2%. The mobile money ARPU growth was driven by an increase in
the transaction value per customer of 8.3%, now at $422 per
customer per month. Expansions of our exclusive distribution
network and the number of agents helped us to grow the mobile money
customer base by 21.8%.
Underlying EBITDA grew by 27.6% with a margin of 41.0%, an
improvement of 332 basis points in reported currency and 337 basis
points in constant currency. This underlying EBITDA growth was
driven by both revenue growth and increased efficiency in operating
expenses.
Operating free cash flow was $339m, up 23.1%, due to the
expansion in underlying EBITDA.
Mobile services
Description Unit Year ended Quarter ended
of
measure
---------------------- ---------------------------------------- ----------------------------------------
Mar-22 Mar-21 Reported Constant Mar-22 Mar-21 Reported Constant
currency currency currency currency
change change change change
% % % %
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Summarised statement
of operations
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Underlying revenue
(1) $m 4,294 3,592 19.6% 22.0% 1,112 955 16.5% 18.3%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Underlying EBITDA $m 2,077 1,639 26.8% 29.7% 542 456 18.9% 20.4%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Underlying EBITDA 276 286 100
margin % 48.4% 45.6% bps bps 48.7% 47.7% bps 86 bps
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Depreciation
and amortisation $m (697) (654) 6.5% 8.4% (176) (165) 6.5% 8.3%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating exceptional
items (2) $m (32) 14 - - (32) 1 - -
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating profit $m 1,348 995 35.5% 39.0% 335 292 14.8% 16.1%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Capex $m 621 580 7.1% 7.1% 217 185 17.1% 17.1%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating free
cash flow $m 1,456 1,059 37.6% 42.6% 325 271 20.0% 22.9%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating KPIs
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile voice
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue $m 2,358 2,083 13.2% 15.4% 611 547 11.8% 13.6%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Customer base million 128.4 118.2 8.7% 128.4 118.2 8.7%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Voice ARPU $ 1.6 1.5 5.9% 8.0% 1.6 1.5 3.9% 5.6%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile data
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 1,525 1,157 31.8% 34.6% 397 315 26.0% 27.9%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data customer
base million 46.7 40.6 15.2% 46.7 40.6 15.2%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Data ARPU $ 2.9 2.5 16.1% 18.6% 2.9 2.6 10.5% 12.1%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
(1) Mobile service revenue after inter-segment eliminations was
$4,290m in the year ended 31 March 2022 and $3,587m in the prior
year. Underlying revenue for Mobile service excludes one-time
exceptional revenue of $20m relating to a settlement in Niger in
the year ended 31 March 2021.
(2) Operating exceptional items of $32m in the year ended 31
March 2022 consist of a $12m provision for expected settlement of a
contractual dispute in which one of the Group's subsidiaries is a
party and $20m costs of agreeing historical spectrum fees in one of
the Group's subsidiaries. The prior year operating exceptional
items include exceptional revenue on account of a one-time
settlement in Niger amounting to $20m, partially offset by one-off
costs of $6m in Francophone Africa.
Mobile services underlying revenue in reported currency grew by
19.6%, with constant currency growth of 22.0%, supported by growth
in both voice and data services.
Voice underlying revenue grew by 15.4% in constant currency,
supported by customer base growth of 8.7% and voice ARPU growth of
8.0%. The customer base growth was driven by expansion of our
network and distribution infrastructure. The slowdown in customer
base growth was due to the introduction of new SIM registration
regulations in Nigeria. Excluding Nigeria, the customer base grew
by 10.2%. In Nigeria, our customer base returned to growth in the
second half of the year, adding a net 2.4 million customers for the
full year. Voice minutes per customer reached 257 minutes per
month, up by 9.8%, resulting in voice ARPU growth of 8.0%. Total
network minutes increased by 17.3%.
Data revenue continued to be a key driver of growth, up by 34.6%
in constant currency. This was driven by data customer base growth
of 15.2% and data ARPU growth of 18.6%. Our continued investment in
our network and expansion of our 4G network infrastructure helped
us to expand our data customer base. 87.6% of our Group sites are
now operating on 4G, compared with 76.5% in the prior year. 36.4%
of our total customer base were data users, up from 34.3% in the
prior year. 4G data usage per customer increased to 5.5 GB per
month compared with 5.0 GB in the prior year. 4G data usage reached
5.9 GB per customer per month for Q4'22. Total data usage per
customer reached 3.4 GB per month, up 31.0% from the 2.6 GB of the
prior year. At the end of the year, 42.6% of the total data
customer base were 4G data customers, up from 36.4% in the prior
year. The increase in 4G data customer penetration has helped to
drive data ARPU growth.
Data revenue contribution reached 32.3% of total Group revenue
in the year, up from 29.8% in the prior year.
Mobile money
Description Unit Year ended Quarter ended
of
measure
---------------------- ---------------------------------------- ----------------------------------------
Mar-22 Mar-21 Reported Constant Mar-22 Mar-21 Reported Constant
currency currency currency currency
change change change change
% % % %
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Summarised statement
of operations
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Revenue (1) $m 553 401 37.9% 34.9% 147 110 33.6% 29.0%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Underlying EBITDA $m 270 195 38.1% 34.2% 72 54 33.6% 27.9%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Underlying EBITDA (27) (39)
margin % 48.7% 48.7% 5 bps bps 48.7% 48.7% 0 bps bps
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Depreciation
and amortisation $m (14) (10) 34.8% 30.9% (4) (4) (4.6%) (7.4%)
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating profit $m 256 185 38.3% 34.4% 68 50 36.5% 30.5%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Capex $m 25 32 (19.9%) (19.9%) 5 25 (79.8%) (79.8%)
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating free
cash flow $m 245 163 49.6% 44.8% 67 29 129.7% 122.3%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Operating KPIs
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
key KPIs
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Transaction value $m 64,436 46,009 40.1% 37.0% 16,792 12,538 33.9% 29.2%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Active customers million 26.2 21.7 20.7% 26.2 21.7 20.7%
---------------------- ---------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
ARPU $ 1.9 1.7 14.7% 12.2% 1.9 1.7 12.7% 8.7%
---------------------- ------- ------- ---------- ---------- ------- ------- ---------- ----------
(1) Mobile money service revenue post inter-segment eliminations
with mobile services was $424m in the year ended 31 March 2022 and
$301m in the prior year.
Reported currency mobile money revenue grew by 37.9% with a
constant currency growth of 34.9%. The slowdown in mobile money
revenue growth since July 2021 has been due to the implementation
of levies by the Government of Tanzania on mobile money withdrawal
and P2P transactions (subsequently revised downwards in early
September 2021). Excluding Tanzania, revenue grew by 41.6% in
constant currency. The constant currency revenue growth of 34.9%
was driven by both customer base growth of 20.7% and ARPU growth of
12.2%. The mobile money customer base growth was due to the
expansion of our distribution network, particularly our exclusive
channels of Airtel money branches and kiosks. We continued to
expand our mobile money portfolio through partnerships with leading
financial institutions, and the expansion of our merchant ecosystem
further strengthened our mobile money propositions. The increase in
transaction value per customer to $223 per month, up by 13.9%, led
to mobile money ARPU growth of 12.2%.
Q4'22 annualised transaction value reached $67.2bn in reported
currency, with mobile money revenue contributing 12.0% of total
revenue in the quarter.
The mobile money customer base grew by 20.7% to 26.2 million in
the year. Mobile money customer base penetration reached 20.4%, an
increase of 2 percentage points. The ARPU growth of 12.2% was
largely driven by an increase in transaction values and higher
contributions from cash transactions, merchant payments, P2P
transfers and mobile service recharges through Airtel Money.
Underlying EBITDA was $270m, up by 38.1% in reported currency,
with a constant currency growth of 34.2%. The reported currency
growth rate was higher than the constant currency growth rate due
to appreciation in the Zambian kwacha. The underlying EBITDA margin
for the year was 48.7%, broadly in line with the prior year.
Forward looking statements
This document contains certain forward-looking statements
regarding our intentions, beliefs or current expectations
concerning, amongst other things, our results of operations,
financial condition, liquidity, prospects, growth, strategies and
the economic and business circumstances occurring from time to time
in the countries and markets in which the Group operates.
These statements are often, but not always, made through the use
of words or phrases such as "believe," "anticipate," "could,"
"may," "would," "should," "intend," "plan," "potential," "predict,"
"will," "expect," "estimate," "project," "positioned," "strategy,"
"outlook", "target" and similar expressions.
It is believed that the expectations reflected in this document
are reasonable, but they may be affected by a wide range of
variables that could cause actual results to differ materially from
those currently anticipated.
All such forward-looking statements involve estimates and
assumptions that are subject to risks, uncertainties and other
factors that could cause actual future financial condition,
performance and results to differ materially from the plans, goals,
expectations and results expressed in the forward-looking
statements and other financial and/or statistical data within this
communication.
Among the key factors that could cause actual results to differ
materially from those projected in the forward-looking statements
are uncertainties related to the following: the impact of
competition from illicit trade; the impact of adverse domestic or
international legislation and regulation; changes in domestic or
international tax laws and rates; adverse litigation and dispute
outcomes and the effect of such outcomes on Airtel Africa's
financial condition; changes or differences in domestic or
international economic or political conditions; the ability to
obtain price increases and the impact of price increases on
consumer affordability thresholds; adverse decisions by domestic or
international regulatory bodies; the impact of market size
reduction and consumer down-trading; translational and
transactional foreign exchange rate exposure; the impact of serious
injury, illness or death in the workplace; the ability to maintain
credit ratings; the ability to develop, produce or market new
alternative products and to do so profitably; the ability to
effectively implement strategic initiatives and actions taken to
increase sales growth; the ability to enhance cash generation and
pay dividends and changes in
the market position, businesses, financial condition, results of
operations or prospects of Airtel Africa.
Past performance is no guide to future performance and persons
needing advice should consult an independent financial adviser. The
forward-looking statements contained in this document reflect the
knowledge and information available to Airtel Africa at the date of
preparation of this document and Airtel Africa undertakes no
obligation to update or revise these forward-looking statements,
whether as a result of new information, future events or otherwise.
Readers are cautioned not to place undue reliance on such
forward-looking statements.
No statement in this communication is intended to be, nor should
be construed as, a profit forecast or a profit estimate and no
statement in this communication should be interpreted to mean that
earnings per share of Airtel Africa plc for the current or any
future financial periods would necessarily match, exceed or be
lower than the historical published earnings per share of Airtel
Africa plc.
Financial data included in this document are presented in US
dollars rounded to the nearest million. Therefore, discrepancies in
the tables between totals and the sums of the amounts listed may
occur due to such rounding. The percentages included in the tables
throughout the document are based on numbers calculated to the
nearest $1,000 and therefore minor rounding differences may result
in the tables. Growth metrics are provided on a constant currency
basis unless otherwise stated. The Group has presented certain
financial information on a constant currency basis. This is
calculated by translating the results for the current financial
year and prior financial year at a fixed 'constant currency'
exchange rate, which is done to measure the organic performance of
the Group. Growth rates for our reporting regions and service
segments are provided in constant currency as this better
represents the underlying performance of the business.
Consolidated Financial Statements
Consolidated Statement of Comprehensive Income
(All amounts are in US Dollar Millions; unless stated
otherwise)
For the year ended
------------------------------
Notes 31 March 2022 31 March 2021
-------------- --------------
Income
Revenue 5 4,714 3,908
Other income 10 11
4,724 3,919
Expenses
Network operating expenses 817 694
Access charges 407 376
License fee and spectrum usage charges 244 198
Employee benefits expense 297 275
Sales and marketing expenses 224 187
Impairment loss on financial assets 5 7
Other operating expenses 451 382
Depreciation and amortisation 744 681
3,189 2,800
Operating profit 1,535 1,119
Finance costs 441 432
Finance income (19) (9)
Other non-operating income (111) -
Share of profit from associate (0) (1)
Profit before tax 1,224 697
Income tax expense 7 469 282
Profit for the year 755 415
Profit before tax (as presented above) 1,224 697
Less: Exceptional items (net) 6 (60) (14)
Underlying profit before tax 1,164 683
--------------------------------------------------------------- ------ -------------- --------------
Profit after tax (as presented above) 755 415
Less: Exceptional items (net) 6 (62) (50)
Underlying profit after tax 693 365
--------------------------------------------------------------- ------ -------------- --------------
For the year ended
------------------------------
Notes 31 March 2022 31 March 2021
-------------- --------------
Profit for the year (continued from previous page) 755 415
Other comprehensive income ('OCI')
Items to be reclassified subsequently to profit or loss:
Loss due to foreign currency translation differences (4) (147)
Tax (expense)/credit on above (3) 9
Share of OCI of associate 1 0
Net loss on net investments hedge (8) (11)
(14) (149)
-------------- --------------
Items not to be reclassified subsequently to profit or loss:
Re-measurement loss on defined benefit plans (0) (0)
Tax credit on above 0 0
(0) (0)
-------------- --------------
Other comprehensive loss for the year (14) (149)
-------------- --------------
Total comprehensive income for the year 741 266
============== ==============
Profit for the year attributable to: 755 415
Owners of the Company 631 339
Non-controlling interests 124 76
Other comprehensive loss for the year attributable to: (14) (149)
Owners of the Company (12) (140)
Non-controlling interests (2) (9)
Total comprehensive income for the year attributable to: 741 266
Owners of the Company 619 199
Non-controlling interests 122 67
Earnings per share
Basic 8 16.8c 9.0c
Diluted 8 16.8c 9.0c
Consolidated Statement of Financial Position
(All amounts are in US Dollar Millions; unless stated otherwise) As of
------------------------------
Notes 31 March 2022 31 March 2021
-------------- --------------
Assets
Non-current assets
Property, plant and equipment 9 2,214 2,066
Capital work-in-progress 9 189 166
Right of use assets 1,109 799
Goodwill 10 & 11 3,827 3,835
Other intangible assets 632 558
Intangible assets under development 2 177
Investment in associate 6 4
Financial assets
- Investments 0 0
- Derivative instruments 3 6
- Others 7 17
Income tax assets (net) 22 33
Deferred tax assets (net) 222 314
Other non-current assets 134 112
-------------- --------------
8,367 8,087
Current assets
Inventories 3 7
Financial assets
- Derivative instruments 3 6
- Trade receivables 123 113
- Cash and cash equivalents 12 638 813
- Other bank balances 12 378 282
- Balance held under mobile money trust 513 440
- Others 124 66
Other current assets 215 147
Assets of disposal group classified as held for sale - 31
1,997 1,905
Total assets 10,364 9,992
============== ==============
Notes As of
-------------------------------------------------
31 March 2022 31 March 2021
-------------- ---------------------------------
Current liabilities
Financial liabilities
- Borrowings 13 786 1,468
- Lease liabilities 323 240
- Derivative instruments 9 7
- Trade payables 404 366
- Mobile money wallet balance 496 432
- Others 428 448
Provisions 69 65
Deferred revenue 162 135
Current tax liabilities (net) 220 173
Other current liabilities 176 151
Liabilities of disposal group classified as
held for sale - 19
3,073 3,504
Net current liabilities (1,076) (1,599)
Non-current liabilities
Financial liabilities
- Borrowings 13 1,486 1,871
- Lease liabilities 1,337 1,037
- Put option liability 4(g) 579 -
- Derivative instruments - 6
- Others 88 91
Provisions 20 25
Deferred tax liabilities (net) 114 81
Other non-current liabilities 18 24
-------------- ---------------------------------
3,642 3,135
Total liabilities 6,715 6,639
============== =================================
Net Assets 3,649 3,353
============== =================================
Equity
Share capital 14 3,420 3,420
Retained earnings 3,436 2,975
Other reserves (3,354) (2,990)
-------------- ---------------------------------
Equity attributable to owners of the company 3,502 3,405
Non-controlling interests ('NCI') 147 (52)
-------------- ---------------------------------
Total equity 3,649 3,353
============== =================================
The consolidated financial statements (company registration number: 11462215) were approved
by the Board of directors and authorised for issue on 10 May 2022 and were signed on its behalf
by:
Olusegun Ogunsanya
Chief Executive Officer
10 May 2022
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 (NCI) equity
---------------------------------------------------------------------------------- ----------------
Share Capital Retained Other reserves Equity
earnings attributable to
owners of the
company
------------------------ --------- -------------------------- ----------------- ----------------
No of Amount Transactions Other
shares(2) with NCI components
reserve of equity
------------- -----------
As of 1 April
2020 6,839,896,081 3,420 2,805 (585) (2,252) 3,388 (107) 3,281
Profit for the
year - - 339 - - 339 76 415
Other
comprehensive
loss - - (0) - (140) (140) (9) (149)
--------------- ----------- ----------------- ----------------
Total
comprehensive
income - - 339 - (140) 199 67 266
Transaction with
owners of equity
Employee
share-based
payment reserve - - (0) - 0 0 - 0
Purchase of own
shares - - - - (4) (4) - (4)
Transactions
with NCI - - - (9) - (9) 1 (8)
Dividend to
owners of the
company - - (169) - - (169) - (169)
Dividend
(including tax)
to NCI (1) - - - - - - (13) (13)
As of 31 March
2021 6,839,896,081 3,420 2,975 (594) (2,396) 3,405 (52) 3,353
=============== ======= ========= ============= =========== ================= ================ =======
Profit for the
year - - 631 - - 631 124 755
Other
comprehensive
loss - - (0) - (12) (12) (2) (14)
--------------- -----------
Total
comprehensive
income - - 631 - (12) 619 122 741
Transaction with
owners of equity
Employee
share-based
payment reserve - - (1) - 3 2 - 2
Purchase of own
shares - - - - (6) (6) - (6)
Transactions
with NCI [Note
4 (g) & (h)] - - - (348) (1) (349) 153 (196)
Dividend to
owners of the
company [Note 4
(a) & (b)] - - (169) - - (169) - (169)
Dividend
(including tax)
to NCI (1) - - - - - - (76) (76)
As of 31 March
2022 6,839,896,081 3,420 3,436 (942) (2,412) 3,502 147 3,649
=============== ======= ========= ============= =========== ================= ================ =======
(1) Dividend to NCI includes tax of USD 4m (March 2021: USD 0m).
(2) Includes ordinary and deferred shares.
Consolidated Statement of Cash Flows (All amounts are in US Dollar Millions; unless stated
otherwise)
For the year ended
------------------------------
31 March 2022 31 March 2021
-------------- --------------
Cash flows from operating activities
Profit before tax 1,224 697
Adjustments for -
Depreciation and amortization 744 681
Finance income (19) (9)
Finance cost(s) 441 432
Share of profit of associate (0) (1)
Other non-operating income adjustment [refer to note 4(c) and (f)] (111) -
Other non-cash adjustments (1) (6) (15)
Operating cash flow before changes in working capital 2,273 1,785
Changes in working capital
Increase in trade receivables (18) (8)
Decrease / (Increase) in inventories 4 (4)
Increase / (Decrease) in trade payables 34 (38)
Increase in mobile money wallet balance 64 139
Increase in provisions 14 1
Increase in deferred revenue 27 17
Decrease in income received in advance - (1)
Increase in other financial and non financial liabilities 50 18
Increase in other financial and non financial assets (144) (48)
Net cash generated from operations before tax 2,304 1,861
Income taxes paid (293) (195)
Net cash generated from operating activities (a) 2,011 1,666
-------------- --------------
Cash flows from investing activities
Purchase of property, plant and equipment and capital work-in-progress (717) (645)
Proceeds from sale of tower assets [refer to note 4(c) and (d)] 171 -
Purchase of intangible assets (22) (270)
Maturity of deposits with bank 301 -
Investment in deposits with bank (2) (388) (257)
Proceeds from sale of tower subsidiary (net of cash acquired) [note 4(e) and
(f)] 79 -
Interest received 19 14
Net cash used in investing activities (b) (557) (1,158)
-------------- --------------
Cash flows from financing activities
Proceeds from sale of shares to non-controlling interests [refer to note 4(g)] 550 -
Acquisition of non-controlling interests [refer to note 4(h)] (164) (7)
Purchase of own shares by ESOP trust (6) (4)
Proceeds from issue of share to non-controlling interests 2 -
Proceeds from borrowings 973 407
Repayment of borrowings (2,115) (265)
Repayment of lease liabilities (251) (208)
Dividend paid to non-controlling interests (48) (9)
Dividend paid to owners of the Company (169) (169)
Interest on borrowings and lease liabilities and other finance charges (370) (317)
Payment on maturity of derivatives (9) (3)
Net cash used in financing activities (c) (1,607) (575)
-------------- --------------
Decrease in cash and cash equivalents during the year (a+b+c) (153) (67)
Currency translation differences relating to cash and cash equivalents (3) (17)
Cash and cash equivalent as at beginning of the year 1,003 1,087
Cash and cash equivalents as at end of the year (Note 12) (3) 847 1,003
============== ==============
1. For the year ended 31 March 2022, this mainly includes
movement in trade receivables impairment and other provisions. For
the year ended 31 March 2021, this mainly includes recognition of
revenue pertaining to earlier years on a cumulative catch-up basis,
arising out of a non-cash settlement agreement entered with a
customer in one of the Group's subsidiaries in Niger.
2. Includes investment in deposits with original maturity of
more than 3 months and deposits placed against certain borrowings.
These are included within other bank balances in the consolidated
statement of financial position.
3. Includes balance held under mobile money trust of USD 513m
(2021: USD 440m) on behalf of mobile money customers which are not
available for use by the Group.
Notes to Consolidated Financial Statements
(All amounts are in US Dollar Millions; unless stated
otherwise)
1. Corporate information
Airtel Africa plc ('the company') is a public company limited by
shares incorporated in the United Kingdom under the Companies Act
2006 and is registered in England and Wales (registration number
11462215). The registered address of the company is First Floor,
53/54 Grosvenor Street, London W1K 3HU, United Kingdom. The company
listed on the London Stock Exchange (LSE) on 3 July 2019 and on the
Nigerian Stock Exchange (NGX) on 9 July 2019. The company is a
subsidiary of Airtel Africa Mauritius Limited ('the parent'), a
company registered in Mauritius. The registered address of the
parent is c/o IQ EQ Corporate Services (Mauritius) Ltd., 33, Edith
Cavell Street, Port Louis, 11324, Mauritius.
The company, together with its subsidiary undertakings
(hereinafter referred to as 'the Group') has operations in Africa.
The principal activities of the Group and its associate consist of
the provision of telecommunications and mobile money services.
2. Basis of preparation
The results for the year ended 31 March 2022 are an abridged
statement of the full annual report which was approved by the Board
of Directors on 10 May 2022 and signed on its behalf on 10 May
2022. The consolidated financial statements within the full annual
report are prepared in accordance with the requirements of the
Companies Act 2006 and International Financial Reporting Standards
as issued by the International Accounting Standards Board (IASB)
and approved for use in the United Kingdom (UK) by the UK
Accounting Standards Endorsement Board (UKEB).
The financial information set out above does not constitute the
company's statutory accounts for the years ended 31 March 2022 and
2021, but is derived from those accounts. Statutory accounts for
March 2021 have been delivered to the Registrar of Companies and
those for 2022 will be delivered following the company's annual
general meeting.
The financial information included in this release announcement
does not itself contain sufficient information to comply with IFRS.
The company will publish full financial statements that comply with
IFRS, in June 2022.
All the amounts included in the financial statements are
reported in United States dollars, with all values rounded to the
nearest millions (USD m) except when otherwise indicated. Further,
amounts which are less than half a million are appearing as
'0'.
The accounting policies as set out in the following paragraphs
of this note have been consistently applied by all the Group
entities to all the periods presented in these financial
statements.
3. Going concern
These consolidated financial statements have been prepared on a
going concern basis. In making this going concern assessment, the
Group has considered cash flow projections to June 2023 under both
base and reasonable worst case scenarios taking into considerations
its principal risks and uncertainties including a reduction in
revenue and EBITDA and a significant devaluation of the various
currencies in the countries in which the Group operates including
the Nigerian Naira. As part of this evaluation, the Group has
considered available ways to mitigate these risks and uncertainties
and has also considered committed undrawn facilities of USD 424m
expiring beyond the going concern assessment period (total
committed undrawn facilities as of the date of authorisation of
these consolidated financial statements are USD 587m), which will
fulfil the Group's cash flow requirement under both the base and
reasonable worst case scenarios.
Having considered all the factors above impacting the Group's
businesses, the impact of downside sensitivities, and the
mitigating actions available including a reduction and deferral of
capital expenditure, the directors are satisfied that the Group has
adequate resources to continue its operational existence for the
foreseeable future. Accordingly, the directors continue to adopt
the going concern basis of accounting in preparing the consolidated
and company only financial statements.
4. Significant transactions/new developments
a) The directors recommended and shareholders approved a final
dividend of 2.5 cents per ordinary share for the year ended 31
March 2021, which was paid on 23 July 2021 to the holders of
ordinary shares on the register of members at the close of business
on 25 June 2021.
b) The interim dividend of 2 cents per share was approved by the
Board on 27 October 2021 and paid on 10 December 2021 to the
holders of ordinary shares on the register of members at the close
of business on 12 November 2021.
c) On 2 June 2021, the Group signed an agreement to sell 1,445
towers in Tanzania to a joint venture company owned by a
wholly-owned subsidiary of SBA Communications Corporation as
majority owner and by Paradigm Infrastructure Limited, for a gross
consideration of USD 177m. The first close of such sale was
completed on 4 January 2022 and a portion of consideration
amounting USD 160m was received. The Group has leased back a
portion of such tower assets and thus a corresponding portion of
the total gain on the sale has been recognized as a deduction in
the cost of the Right of Use assets for the assets leased back. The
resultant remaining gain (amounting to USD 83m) has been recorded
as 'other non-operating income' and presented as an exceptional
item (refer to Note 6(1)). The Group has recognised Right of Use
assets and Lease Liabilities for the portion of towers leased back
by the Group.
Consequent to the completion of this sale, as per the settlement
agreement with Government of Tanzania (GOT), shareholder loans
payable by Airtel Tanzania (a subsidiary of the Group) to Bharti
Airtel Tanzania BV ('BATBV') and Bharti Airtel International
(Netherlands) B.V. ('BAIN') (other subsidiaries of the Group)
amounting to USD 408m were forgiven after repayment of a part of
the shareholder loan amounting USD 107m by Airtel Tanzania to
BATBV. A portion of the impact of this waiver pertaining to the
non-controlling holders has been allocated to non-controlling
interest in the consolidated financial statements.
As per the settlement agreement, Airtel Tanzania also paid a
special dividend of USD 18m to its 49% shareholder, Government of
Tanzania. The reduction in net assets of Airtel Tanzania
(subsidiary) due to this distribution has been allocated to owners
of the Company and non-controlling interests in the consolidated
financial statements in proportion of their respective
shareholdings.
d) In line with the agreement to sell 162 towers in Rwanda,
signed by the Group on 22 February 2021 with IHS Rwanda Ltd, during
the year ended 31 March 2022, the Group completed the first and
second close of the sale of telecommunication tower assets and
received a consideration of USD 11m. Since the Group has leased
back a portion of such tower assets, a corresponding portion of the
total gain on the sale has been recognized as a deduction in the
cost of the Right of Use asset for the assets leased back with the
remaining gain (amounting to USD 4m) recorded as 'other
non-operating income' and presented as an exceptional item (refer
to Note 6(1)). The Group has recognised Right of Use assets and
Lease Liabilities for the portion of towers leased back by the
Group.
e) In line with the agreement to sell, signed by the Group on 23
March 2021 with Helios Towers for gross consideration of USD 52m,
during the year ended 31 March 2022, the Group completed the first
and second close of the sale of the Group's subsidiary which holds
tower assets in Madagascar and received consideration of USD 46m.
Since the Group has leased back a portion of such tower assets, a
corresponding portion of the total gain on the sale has been
recognized as a deduction in the cost of the Right of Use asset for
the assets leased back with the remaining gain (amounting to USD
5m) recorded as 'other non-operating income' and presented as an
exceptional item (refer to Note 6(1)). The Group has recognised
Right of Use assets and Lease Liabilities for the portion of towers
leased back by the Group.
The details of the consideration received, assets and
liabilities over which control was lost and gain recorded during
the year are as follows:
As of
---------------
A. Consideration received 2 November 2021
---------------
Fair value of consideration (first and subsequent
closings) 49
B. Net assets disposed
Non-current assets
Property Plant and Equipment 18
Others 2
Current Assets
Cash and Cash Equivalents 2
Others 1
---------------
Total Assets 23
---------------
Current Liabilities
Trade Payables 4
Non-Current Liabilities
Others 2
---------------
Total Liabilities 6
---------------
Net Assets 17
---------------
C. Gain on Disposal(1) 5
D. Net Cash inflow on disposal
Consideration received in Cash and Cash Equivalents
(at first and second close) 46
(1) Gain on disposal has been computed after adjusting foreign
currency translation losses reclassified to the statement of
comprehensive income amounting to USD 6m and a gain amounting to
USD 21m pertaining to the portion of assets leased back by the
Group which has been recognized as a deduction in the right of use
asset.
f) In line with the agreement to sell, signed by the Group on 23
March 2021 with Helios Towers for gross consideration of USD 55m,
the Group completed the first close of the sale of the Group's
subsidiary which holds tower assets in Malawi on 24 March 2022 and
received a portion of consideration amounting to USD 34m. Since the
Group has leased back a portion of such tower assets, a
corresponding portion of the total gain on the sale has been
recognized as a deduction in the cost of the Right of Use assets
for the assets leased back with the remaining gain (amounting to
USD 19m) recorded as 'other non-operating income' and presented as
an exceptional item (refer to Note 6(1)). The Group has recognised
Right of Use assets and Lease Liabilities for the portion of towers
leased back by the Group.
The details of the consideration received, assets and
liabilities over which control was lost and gain recorded during
the year is as follows:
As of
-------------
A. Consideration received 24 March 2022
-------------
Fair value of consideration received (first and
subsequent close) 51
B. Net assets disposed:
Non-current assets
Property Plant and Equipment 31
Right of use assets 3
Others 2
Current Assets
Cash and Cash Equivalents 2
Others 2
-------------
Total Assets 40
-------------
Current Liabilities
Trade Payables 5
Others 2
Non-Current Liabilities
Deferred tax liability 2
Others 3
-------------
Total Liabilities 12
-------------
Net Assets 28
-------------
C. Gain on Disposal(1) 19
D. Net Cash inflow on disposal
Consideration received in Cash and Cash Equivalents 34
(1) Gain on disposal has been computed after adjusting Foreign
Currency Translation gains reclassified to the statement of
comprehensive income amounting to USD 11m and a gain amounting to
USD 15m pertaining to the portion of assets leased back by the
Group which has been recognized as a deduction in the right of use
asset.
g) In March 2021, the Group had entered into agreements with
TPG's The Rise Fund and Mastercard for the sale of non-controlling
interests in one of the Group's subsidiaries (AMC BV) by way of
secondary sale of AMC BV's shares.
On 02 August 2021, the Group completed the first close of the
transaction, whereby The Rise Fund and Mastercard invested USD 150m
and USD 75m respectively.
On 30 July 2021, the Group further entered into an agreement
with Qatar Holdings LLC for the sale of further non-controlling
interests in AMC BV and completed the first close of the
transaction on 19 August 2021 receiving USD 150m from Qatar
Holdings LLC.
On 16 November 2021, the Group completed the second close of the
above transactions whereby The Rise Fund and Qatar Holdings LLC
each invested a further USD 50m, and Mastercard a further USD
25m.
On 15 December 2021, the Group further entered into an agreement
with Chimetech Holding Limited for the sale of further
non-controlling interests in AMC BV and received USD 50m from
Chimetech Holding Limited.
While the Group continues to control AMC BV, for all the
above-mentioned investments, the Group has recorded a
non-controlling interest including shares held within Escrow. These
shares may transfer to the investors at the end of a restructuring
period as per the terms of the agreements. The Group has concluded
that it does not control the shares placed in Escrow and hence has
recorded these shares as part of the Group's non-controlling
interests.
Under the terms of the transaction, and in very limited
circumstances (including in the event that there is no Initial
Public Offering of shares in AMC BV within four years of first
close), The Rise Fund and Mastercard would have the option, so as
to provide liquidity to them, to sell its shares in AMC BV to
Airtel Africa or its affiliates at fair market value (determined by
a mutually agreed merchant bank using an agreed internationally
accepted valuation methodology). The Group has determined that
successfully executing the IPO is not within complete control of
the Group and has thus recorded a put option liability at the
present value of the expected buy-back amount which is also the
maximum amount, by debiting 'transactions with NCI reserve'.
Subsequent re-measurement of this liability has been recognised as
a finance cost.
h) On 1 December 2021, Airtel Nigeria completed the buy-back of
8.22% non-controlling interest (out of existing 8.26%) from its
non-controlling shareholders at a total cost of NGN 67.6 billion
(approximately USD 163m) including directly attributable
transaction costs. The difference between such cost and the
carrying value of such non-controlling interest, has been recorded
in 'Transaction with NCI reserve' as part of owner's equity.
i) On 7 March 2022, Bharti Airtel International (Netherlands)
B.V., a subsidiary of the Group, completed early repayment of its
USD 505m, 5.125% Guaranteed Senior Notes, with original maturity
due in March 2023 using cash balances available at the Group level.
The settlements included all outstanding accrued interest up to the
redemption date and an applicable premium. The difference of USD
19m between the carrying value of such bonds and the total
consideration paid has been recognized as a finance cost in the
statement of comprehensive income and presented as an exceptional
item.
j) During the year ended 31 March 2022, Airtel Kenya Networks
Limited ('Airtel Kenya'), a subsidiary of the Group, entered into
an agreement with the Communications Authority of Kenya regarding
its 2015-2025 operating and spectrum licence. Under this agreement,
Airtel Kenya agreed to pay a total of USD 20m in four instalments
over the next three years. The first instalment of USD 5m has been
paid and for the balance amount, a deferred payment liability has
been recognized in the consolidated financial statements. This cost
has been charged to the statement of comprehensive income and
presented as an exceptional item.
5. Segmental Information
The group's segment information is provided on the basis of
geographical clusters to the group's chief executive officer i.e.
chief operating decision maker (CODM) for the purposes of resource
allocation and assessment of performance. The group's reporting
segments are as follows:
Nigeria
East Africa - Comprising operations in Kenya, Malawi, Rwanda,
Tanzania, Uganda and Zambia
Francophone Africa - Comprising operations in Chad, Congo B,
DRC, Gabon, Madagascar, Niger 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.
Each segment's performance is evaluated based on segment revenue
and segment result.
The segment result is Underlying EBITDA i.e. earnings before
interest, tax, depreciation and amortisation before exceptional
items. In March 2021, Underlying EBITDA was also adjusted for
charitable donations. This is the measure reported to the CODM for
the purpose of resource allocation and assessment of segment
performance.
Inter-segment pricing and terms are reviewed and changed by
management to reflect changes in market conditions and changes to
such terms are reflected in the period in which the change
occurs.
The 'Eliminations/Adjustments' column comprises inter-segment
revenues eliminated upon consolidation and Group accounting policy
alignments.
Segment assets and segment liabilities comprise those assets and
liabilities directly managed by each segment. Segment assets
primarily include receivables, property, plant and equipment,
capital work in progress, right-to-use assets, intangibles assets,
inventories and cash and cash equivalents. Segment liabilities
primarily include operating liabilities. Segment capital
expenditure comprises investment in property, plant and equipment,
capital work in progress, intangible assets (excluding licenses)
and capital advances.
Investment elimination upon consolidation and resulting goodwill
are reflected in the 'elimination /adjustment' column.
Summary of the segmental information and disaggregation of
revenue for the year ended and as of 31 March 2022 is as
follows:
Nigeria East Africa Francophone Africa Unallocated Eliminations Total
-------- ------------ ------------------- ------------ ------------- -------
Revenue from external customers
Voice revenue 984 782 592 - - 2,358
Data revenue 734 457 334 - - 1,525
Mobile money revenue(1) 0 326 98 - - 424
Other revenue(2) 157 146 104 - - 407
1,875 1,711 1,128 - - 4,714
Inter-segment revenue 3 6 3 - (12) -
Total revenue 1,878 1,717 1,131 - (12) 4,714
Segment results: Underlying
EBITDA 1,037 848 464 (38) (0) 2,311
Less:
Depreciation and amortisation 268 240 203 33 0 744
Finance costs 441
Finance income (19)
Other non-operating Income,
(net) (111)
Share of profit of associate (0)
Exceptional items pertaining to
operating profit - 32 - - 32
Profit before tax 1,224
Other segment items
Capital expenditure 251 271 125 9 - 656
--------------------------------- -------- ------------ ------------------- ------------ ------------- -------
As of 31 March 2022
Segment assets 2,254 2,394 1,720 27,422 (23,426) 10,364
Segment liabilities 1,437 2,869 2,495 14,491 (14,577) 6,715
Investment in associate
(included in segment assets
above) - - 6 - - 6
(1) intra-segment elimination of USD 129m adjusted with Mobile
money revenue. It includes USD 85m pertaining to East Africa and
balance USD 44m pertaining to Francophone Africa.
(2) it includes messaging, value added services, enterprise,
site sharing and handset sale revenue.
Summary of the segmental information and disaggregation of
revenue for the year ended and as of 31 March 2021 is as
follows:
Nigeria East Africa Francophone Africa Unallocated Eliminations Total
-------- ------------ ------------------- ------------ ------------- -------
Revenue from external customers
Voice revenue 896 649 558 0 - 2,103
Data revenue 549 354 254 - - 1,157
Mobile money revenue (1) 0 227 74 - - 301
Other revenue (2) 104 147 96 - - 347
1,549 1,377 982 0 - 3,908
Inter-segment revenue 3 4 3 - (10) -
Total revenue 1,552 1,381 985 0 (10) 3,908
Segment results: Underlying
EBITDA 839 631 364 (42) - 1,792
Less:
Depreciation and amortisation 236 221 207 17 - 681
Finance costs 432
Finance income (9)
Share of profit of associate (1)
Charitable donation 1 2 1 2 - 6
Exceptional items pertaining to
operating profit - - (14) - - (14)
Profit before tax 697
Other segment items
Capital expenditure 275 249 88 2 - 614
--------------------------------- -------- ------------ ------------------- ------------ ------------- -------
As of 31 March 2021
Segment assets 1,889 2,042 1,791 29,207 (24,937) 9,992
Segment liabilities 1,192 2,989 2,715 16,907 (17,164) 6,639
Investment in associate
(included in segment assets
above) - - 4 - - 4
(1) intra-segment elimination of USD 100m adjusted with mobile
money revenue. It includes USD 64m pertaining to East Africa and
balance USD 36m pertaining to Francophone Africa.
(2) it includes messaging, value added services, enterprise,
site sharing and handset sale revenue.
Geographical information disclosure on non-current assets (PPE,
CWIP, ROU, Intangible assets including goodwill and intangible
assets under development):
As of
------------------------------
31 March 2022 31 March 2021
-------------- --------------
United Kingdom 1 1
Nigeria 1,670 1,455
Netherlands (including goodwill) 3,773 3,805
Others 2,529 2,341
Total 7,973 7,602
============== ==============
Additional product related information:
Currently, based on the information provided to the CODM for the
purposes of resource allocation and assessment of performance,
Group's segments are geographical clusters in which the Group
operates. The Group also presents additional product-wise
information to investors on a regular basis, however products do
not currently meet the requirements of being operating segments for
the Group. Given the increasing focus of the Group on mobile money
services, the Directors have decided to provide additional
disclosure on a product basis within this operating segment note,
consistent with the information provided within the strategic
report. The Group will continue re-assess its definition and
presentation of operating segments, particularly in respect of
mobile money as the size and importance to the Group grows.
For the year ended
--------------------------------------------------------------------------------
31 March 2022 31 March 2021
--------------------------------------- ---------------------------------------
Mobile Mobile Eliminations/ Mobile Mobile Eliminations/
Services Money Adjustment Total Services Money Adjustment Total
Revenue 4,294 553 (133) 4,714 3,612 401 (105) 3,908
Underlying EBITDA 2,077 270 (36) 2,311 1,639 195 (42) 1,792
Depreciation and
amortization 697 14 33 744 654 10 17 681
Capital Expenditure 621 25 10 656 580 32 2 614
6. Exceptional items
Underlying profit before tax excludes the following exceptional
items:
For the year ended
------------------------------
31 March 2022 31 March 2021
-------------- --------------
Profit before tax 1,224 697
Add: Exceptional items
- Gain on sale of tower assets (1) (111) -
- Spectrum fee agreement cost (2) 20 -
- Bond prepayment cost (3) 19 -
- Provision for settlement of contractual dispute (4) 12 -
- Service revenues (5) - (20)
- Employee restructuring cost (6) - 6
(60) (14)
-------------- --------------
Underlying profit before tax 1,164 683
-------------- --------------
(1) Represents the gain on the sale of telecommunication tower
assets in the Group's subsidiaries in Tanzania, Rwanda, Madagascar,
and Malawi, ( refer to Note 4(c) to 4(f)), as part of the Group's
strategic asset monetisation programme recognised in other
non-operating income.
(2) Represents cost of agreeing historical spectrum fees in one
of the Group's subsidiaries (refer to Note 4(j)) recognised in
license fees and spectrum usage charges.
(3) Comprises cost of prepaying USD 505m bonds with original
maturity of March 2023 (refer to Note 4(i)) recognised in finance
costs.
(4) Represents provision for expected settlement of a
contractual dispute in which one of the Group's subsidiaries is a
party recognised in other operating expenses.
(5) Represents recognition of revenue pertaining to earlier
years on a cumulative catch-up basis, arising out of a settlement
agreement entered with a customer in one of the Group's
subsidiaries in Niger.
(6) Comprises the cost of employee restructuring completed
during the year ended 31 March 2021 in one of the Group's
subsidiaries, including settlement of severance pay defined benefit
plans recognised in employee benefit expenses.
Underlying profit after tax excludes the following exceptional
items:
For the year ended
------------------------------
31 March 2022 31 March 2021
-------------- --------------
Profit after tax 755 415
-Exceptional items (as above) (60) (14)
- Tax on above exceptional items (2) -
- Deferred tax asset recognition (1) - (36)
(62) (50)
-------------- --------------
Underlying profit after tax 693 365
============== ==============
(1) During the year ended 31 March 2021, the Group recognised
deferred tax assets in Airtel Tanzania. Airtel Tanzania had carried
forward losses and temporary differences on which deferred tax was
not recognised in the past. Considering that Airtel Tanzania has
been in continuous and cumulative profits and on the basis of
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, the
deferred tax asset recognition criteria are met, leading to
recognition of USD 36m during the year ended 31 March 2021.
Profit attributable to non-controlling interests include benefit
of USD 33m and USD 19m during the year ended 31 March 2022 and 2021
respectively, relating to the above exceptional items.
7. Income tax
The tax expense is as follows:
For the year ended
------------------------------
31 March 2022 31 March 2021
-------------- --------------
Current tax 347 242
Deferred tax 122 40
-------------- --------------
Income Tax expense 469 282
-------------- --------------
8. Earnings per share ('EPS')
For the year ended
31 March 2022 31 March 2021
-------------- -------------------------
Profit for the year attributable to owners of the Company 631 339
Weighted average ordinary shares outstanding for basic EPS 3,754,179,962 3,757,550,081
Basic EPS 16.8c 9.0c
-------------- -------------------------
The details used in the computation of diluted EPS:
For the year ended
-----------------------------------------
31 March 2022 31 March 2021
-------------- -------------------------
Profit for the year attributable to owners of the Company 631 339
Weighted average ordinary shares outstanding for diluted EPS(1)(2) 3,760,109,303 3,759,122,452
Diluted EPS 16.8c 9.0c
-------------- -------------------------
(1) The difference between the basic and diluted number of shares at the end of March 2022
being 5,929,341 (March 2021: 1,572,371) relates to awards committed but not yet issued under
the Group's share-based payment schemes.
(2) Deferred shares have not been considered for EPS computation as they do not have right
to participate in profits.
9. Property, plant and equipment ('PPE')
The following table presents the reconciliation of changes in
the carrying value of PPE for the year ended 31 March 2022 and 31
March 2021:
Leasehold Building Land Plant and Furniture Vehicles Office Computer Total Capital work
Improvements Equipment & Fixture Equipment in progress
(2) (3)
-------------- --------- ------ ----------- ----------- ---------- ----------- --------- ------- ----------------
Gross carrying value
Balance as of 1 April 2020 50 47 26 2,408 25 24 37 661 3,278 259
Additions / capitalization 1 1 0 648 14 0 9 26 699 611
Disposals / adjustments (1) (1) (0) (0) (32) (1) (0) (0) (0) (34) (696)
Transferred to assets held for sale - - - (77) - 0 - (0) (77) (0)
Foreign currency translation impact 0 (2) 1 (89) (1) 0 (1) (11) (103) (8)
Balance as of 31 March 2021 50 46 27 2,858 37 24 45 676 3,763 166
Additions / capitalization 1 0 2 543 28 0 14 38 626 653
Disposals / adjustments (1) (0) (0) (2) (285) (2) (2) (4) (1) (296) (627)
Foreign currency translation impact (2) 1 (1) (71) (1) (0) 0 (10) (84) (3)
Balance as of 31 March 2022 49 47 26 3,045 62 22 55 703 4,009 189
Accumulated Depreciation
Balance as of 1 April 2020 42 15 1 722 9 22 19 616 1,446 -
Charge 2 3 0 341 6 1 9 27 389 -
Disposals / adjustments (1) (0) (0) 0 (28) (0) (1) (0) 1 (28) -
Transferred to assets held for sale - - - (58) - (0) - (0) (58)
Foreign currency translation impact 0 (1) (0) (41) (0) 0 (1) (9) (52) -
Balance as of 31 March 2021 44 17 1 936 15 22 27 635 1,697 -
Charge 1 3 0 364 10 0 9 31 418 -
Disposals / adjustments (1) 0 (0) (1) (241) (2) (2) (3) (3) (252) -
Foreign currency translation impact (1) 0 (0) (56) (0) (0) (1) (10) (68) -
Balance as of 31 March 2022 44 20 0 1,003 23 20 32 653 1,795 -
Net carrying value
As of 1 April 2020 8 32 25 1,686 16 2 18 45 1,832 259
As at 31 March 2021 6 29 26 1,922 22 2 18 41 2,066 166
As at 31 March 2022 5 27 26 2,042 39 2 23 50 2,214 189
(1) Related to the reversal of gross carrying value and
accumulated depreciation on retirement of PPE and reclassification
from one category of asset to another.
(2) Includes PPE pledged against the Group's Borrowings
outstanding of USD 50m as at 31 March 2022 and 31 March 2021.
(3) The carrying value of capital work-in-progress as at 31
March 2022 and 2021 mainly pertains to plant and equipment.
10. Goodwill
The following table presents the reconciliation of changes in
the carrying value of Goodwill for the year ended 31 March 2022 and
31 March 2021:
Goodwill
--------
Balance as of 1 April 2020 3,943
Foreign currency translation impact (108)
--------
Balance as of 31 March 2021 3,835
Balance as of 1 April 2021 3,835
Foreign currency translation impact (8)
--------
Balance as of 31 March 2022 3,827
--------
11. Impairment review
The carrying amount of goodwill is attributed to the following
groups of CGUs:
As of
------------------------------
31 March 2022 31 March 2021
-------------- --------------
Nigeria 1,275 1,298
East Africa 1,835 1,821
Francophone Africa 717 716
3,827 3,835
============== ==============
The Group tests goodwill for impairment annually on 31 December.
The carrying amount of goodwill as of 31 December 2021 was USD
1,277m, USD 1,861m and USD 719m for Nigeria, East Africa and
Francophone Africa respectively. The recoverable amounts of the
above group of CGUs are based on value-in-use, which are determined
based on ten-year business plans that have been approved by the
Board.
Whilst the Board performed a long-term viability assessment over
a three-year period, for the purpose of assessing liquidity, the
Group has adopted a ten-year plan for the purpose of impairment
testing due to the following reasons;
-- The Group operates in emerging markets where the
telecommunications market is underpenetrated compared to developed
markets. In these emerging markets, short-term plans (for example,
five years) are not indicative of the long-term future prospects
and performance of the Group.
-- The life of the Group's regulatory licences and network
assets are at an average of ten years, and
-- The potential opportunities of the emerging African telecom
sector, which is mostly a two-three player market with lower
smartphone penetration.
Accordingly, the Board approved that this planning horizon
reflects the assumptions for medium to long-term market
developments, appropriately covers market dynamics of emerging
markets and better reflects the expected performance in the markets
in which the Group operates.
While using the ten-year plan, the Group also considers external
market data to support the assumptions used in such plans, which is
generally available only for the first five years. Considering the
degree of availability of external market data beyond year five,
the Group has performed sensitivity analysis to assess the impact
on impairment of using a five-year plan. The results of this
sensitivity analysis demonstrate that the initial five-year plan
with appropriate changes including long-term growth rates applied
at the end of this period does not result in any impairment and
does not impact the headroom by more than 5% in any of the group of
CGUs as compared to the headroom using the ten-year plan. Further,
the Group is confident that projections for years six to ten are
reliable and can demonstrate its ability, based on past experience,
to forecast cash flows accurately over a longer period.
Accordingly, the Board has approved and the Group continues to
follow a consistent policy of using an initial forecast period of
ten years for the purpose of impairment testing.
In assessing the Group's prospects, the Directors considered 5G
cellular network potential in the markets which the Group operates.
The Group's first endeavour is to secure spectrum for 5G launch and
roll out 5G network in key markets. Given the relatively low 4G
customer penetration in the countries where it operates, the Group
will continue to focus on its strategy to expand its data services
and increase data customer penetration by leveraging and expanding
its leading 4G network.
During the year, the Central Bank of Nigeria gave Airtel
Africa's subsidiary Smartcash Payment Service Bank Limited
(Smartcash) approval in principle to operate a payment service bank
(PSB) business in Nigeria. The PSB licence allows Smartcash to
accept deposits from individuals and small businesses, carry out
payment and remittance services within Nigeria, and issue debit and
prepaid cards among other activities set out by the Central Bank of
Nigeria (CBN). As of the date of impairment testing, the Group had
in-principle approval of such licence in hand. Subsequent to the
year end, in April 2022, the Group has received the final approval
from the Central Bank of Nigeria for a full PSB licence affording
the Group the opportunity to deliver a full suite of mobile money
services in Nigeria.
Management is in early stages of considering the impact of
climate change. Based on the analysis conducted so far, the Group
is satisfied that the impact of climate change does not lead to an
impairment as at 31 December 2021 and is adequately covered as part
of the sensitivities disclosed below.
The cash flows beyond the planning period are extrapolated using
appropriate long-term terminal growth rates. The long-term terminal
growth rates used do not exceed the long-term average growth rates
of the respective industry and country in which the entity operates
and are consistent with internal/external sources of
information.
The inputs used in performing the impairment assessment at 31
December 2021 were as follows:
Assumptions Nigeria East Africa Francophone Africa
--------------------------- --------- ------------ -------------------
Pre tax Discount Rate 24.35% 16.17% 15.43%
Capital expenditure (as %
of Revenue) 8% - 15% 7% - 15% 7% - 12%
Long term growth rate 2.65% 5.31% 5.46%
At 31 December 2021, the impairment testing did not result in
any impairment in the carrying amount of goodwill in any group of
CGUs.
The key assumptions in performing the impairment assessment were
as follows:
Assumptions Basis of assumptions
--------------------- -----------------------------------------------------------------------------------------------
Discount rate Discount rate reflects the market assessment of the risks specific to the group of CGUs and
estimated based on the weighted average cost of capital for each respective group of CGUs.
===================== ===============================================================================================
Capital expenditures The cash flow forecasts of capital expenditure are based on experience after considering the
capital expenditure required to meet coverage and capacity requirements relating to voice,
data and mobile money services.
===================== ===============================================================================================
Growth rates The growth rates used are in line with the long-term average growth rates of the respective
industry and country in which the entity operates and are consistent with the internal /
external
sources of information.
===================== ===============================================================================================
At 31 December 2021, the impairment testing did not result in
any impairment in the carrying amount of goodwill in any group of
CGUs. The results of the impairment tests using these rates show
that the recoverable amount exceeds the carrying amount by USD
5,579m for East Africa (173%) and USD 2,559m for Francophone Africa
(160%). For Nigeria, the recoverable amount exceeds the carrying
amount by USD 2,842m (104%) including the cash flows of PSB licence
which was received subsequent to the impairment testing date.
Excluding such cash-flows did not result in any impairment in
Nigeria. The Group therefore concluded that no impairment was
required to the Goodwill held against each group of CGUs.
-- Sensitivity in discount rate and capital expenditure
Management believes that no reasonably possible change in any of
the key assumptions would cause the difference between the carrying
value and recoverable amount for any cash-generating unit to be
materially different from the recoverable value in the base case.
The table below sets out the breakeven pre-tax discount rate for
each group of CGUs, which will result in the recoverable amount
being equal with the carrying amount for each group of CGU's:
Francophone
Nigeria East Africa Africa
---------------------- ------- ----------- -----------
Pre tax Discount Rate 43.70% 34.34% 32.63%
The table below presents the increase in isolation in capital
expenditure as a percentage of revenue (across all years of the
impairment review) which will result in equating the recoverable
amount with the carrying amount for each group of CGUs:
Assumptions Nigeria East Africa Francophone Africa
--------------------- -------- ------------ -------------------
Capital expenditure 9.64% 13.99% 11.06%
No reasonably possible change in the terminal growth rate would
cause the carrying amount to exceed the recoverable amount.
12. Cash and bank balances
Cash and cash equivalents As of
--------------------
31 March 31 March
2022 2021
--------- ---------
Balances with banks
- On current accounts 267 486
- Bank deposits with original maturity
of three months or less 281 290
Cheques on hand - 0
Balance held in wallets 89 36
Cash on hand 1 1
--------- ---------
638 813
--------- ---------
Other bank balances
As of
------------------------------
31 March 2022 31 March 2021
-------------- --------------
-Term deposits with banks with original maturity of 220 257
More than three months but less than 12 months
-Margin money deposits (1) 158 25
-Unpaid dividend 0 0
378 282
============== ==============
(1) Margin money deposits represent amount given as collateral
for legal cases and/or bank guarantees for disputed matters,
deposit against derivative contracts and deposits given against
borrowings in one of the Group's subsidiaries.
For the purpose of the statement of cash flows, cash and cash
equivalents are as follows:
As of
------------------------------
31 March 2022 31 March 2021
-------------- --------------
Cash and cash equivalents as per balance sheet 638 813
Balance held under mobile money trust 513 440
Bank overdraft (304) (251)
Cash and cash equivalents classified as held for sale - 1
847 1,003
============== ==============
13. Borrowings
Non-current
As of
---------------------------------------------------
31 March 2022 31 March 2021
-------------- -----------------------------------
Secured
Term loans 50 50
Less: Current portion (A) (50) (50)
-------------- -----------------------------------
- -
Unsecured
Term loans 655 544
Non- convertible bonds 1,015 2,403
-------------- -----------------------------------
1,670 2,947
Less: Current portion (B) (184) (1,076)
-------------- -----------------------------------
1,486 1,871
1,486 1,871
-------------- -----------------------------------
C urrent
As of
31 March 2022 31 March 2021
-------------- --------------
Unsecured
Term loans(1) 248 92
Bank overdraft 304 250
-------------- --------------
552 342
Current maturities of long-term borrowings (A+B) 234 1,126
-------------- --------------
786 1,468
-------------- --------------
(1) Term loans as at 31 March 2022, include borrowings against
which certain deposits (included in other bank balances in
statement of financial position) have been placed.
14. Share capital
As of
-------------------------------------------------
31 March 2022 31 March 2021
-------------- ---------------------------------
Authorised shares
3,758,151,504 Ordinary shares of USD 0.5 each
(March 2021: 3,758,151,504) 1,879 1,879
3,081,744,577 Deferred shares of USD 0.5 each
(March 2021:3,081,744,577) 1,541 1,541
3,420 3,420
============== =================================
Issued, Subscribed and fully paid-up shares
3,758,151,504 Ordinary shares of USD 0.5 each (March 2021:
3,758,151,504) 1,879 1,879
3,081,744,577 Deferred shares of USD 0.5 each
(March 2021: 3,081,744,577) 1,541 1,541
3,420 3,420
============== =================================
Terms/rights attached to equity shares
The company has the following two classes of ordinary
shares:
-- Ordinary shares having par value of USD 0.5 per share. Each
holder of equity shares is entitled to cast one vote per share and
carries a right to dividends.
-- Deferred shares of USD 0.5 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 GBP100,000 (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 the deferred shares then being purchased.
15. Contingent liabilities and commitments
Contingent liabilities As of
------------------------------
31 March 2022 31 March 2021
-------------- --------------
(a) Taxes, Duties and Other demands (under adjudication / appeal / dispute)
-Income tax 18 23
- Value added tax 30 30
-Customs duty & Excise duty 9 8
-Other miscellaneous demands 6 9
( b) Claims under legal and regulatory cases including
arbitration matters (1) (2) 82 87
-------------- --------------
145 157
============== ==============
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 the past been challenged
and contested on merits with the relevant 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 year ended 31
March 2022 of USD 12m primarily comprise a reduction on account of
settlement of an Income tax assessment amounting to approximately
USD3m, closure of other miscellaneous demand amounting to
approximately USD3m and rest of the cases are individually
immaterial.
(1) One of the subsidiaries of the group is involved in a
dispute with one of its vendors, with respect to invoices for
services provided to a subsidiary under a service contract. The
original order under the contract was issued by the subsidiary for
a total amount of Central African franc (CFA) 473,800,000
(approximately UDS 0.8m). In 2014, the vendor-initiated arbitration
proceedings claiming a sum of approximately CFA 1.9 billion
(approximately UDS 3.2m). In mid-May 2019, lower courts imposed a
penalty of CFA 35 billion (approximately UDS 60m), based on which
certain banks of the subsidiary were summoned to release the funds.
The subsidiary immediately lodged an appeal in the Supreme Court
for a stay of execution which was granted. Subsequently, the vendor
filed an appeal before the Common Court of Justice and Arbitration
(CCJA). Quite unexpectedly, in April 2020, the CCJA lifted the
Supreme Court stay of execution. In May 2021, the Commercial
Division of the High Court maintained new seizures carried out by
the Vendor. The subsidiary appealed and the Court of Appeal
determination on the seizures is pending as of April 2022. In March
2022 the CCJA interpreted its judgment of March 2019 to indicate
that the daily penalty could not be maintained after its ruling
dated 18 November 2018.
Separately, in December 2020 the subsidiary initiated criminal
proceedings against the vendor for fraud and deceitful conduct. In
February 2021, the investigating judge issued an order to cease the
investigation which was appealed by the Subsidiary. In March 2022
the Court Appeal quashed the investigative judge order and allowed
the investigation into the Vendor to resume. Testimony in the
criminal investigation case happened on 26 April 2022 in front of
the criminal court of appeal where the honourable judge has further
re-examined the facts from the representatives of subsidiary
against this case. The court will provide further update on the
upcoming proceedings in due course.
(2) One of the subsidiaries of the Group is involved in a
dispute with one of its distributors, with respect to alleged
unpaid commissions, bonuses and benefits, totalling approximately
USD 12m, over a period of around 11 years of its business
relationship with the subsidiary. In March 2012, the distributor
filed a claim against the subsidiary in the High Court. On 4
October 2016, the High Court ruled against the subsidiary and
ordered to pay the claimed amount of approximately USD 12m to the
distributor. On 5 October 2016, the subsidiary filed an appeal in
the Court of Appeal against the order of the High Court, which on
24 July 2020 was ruled against the subsidiary. On 7 August 2020,
the subsidiary filed an appeal against the decision of the Court of
Appeal, in the Supreme Court. Record of appeal has been transmitted
to the Supreme Court and briefs of argument are currently being
prepared.
Despite the strength of the subsidiary's line of defence, as
both the High Court and Court of Appeal have ruled against the
subsidiary, it is appropriate to disclose this matter as contingent
liability for USD 12m, pending the decision of the Supreme Court.
No provision has been made against the said claim.
In addition to the individual matters disclosed above, in the
ordinary course of business, the Group is a defendant or
co-defendant in various litigations and claims which are immaterial
individually.
Guarantees:
Guarantees outstanding as of 31 March 2022 and 31 March 2021
amounting to USD 8m and USD 12m 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.
(ii) Commitments
Capital Commitments
The Group has contractual commitments towards capital
expenditure (net of related advances paid) of
USD 295m and USD 232m as of 31 March 2022 and 31 March 2021
respectively.
16. Related Party disclosure
List of related parties
i) Parent company
Airtel Africa Mauritius Limited
ii) Intermediate parent entity
Network i2i Limited
Bharti Airtel Limited
Bharti Telecom Limited
iii) Ultimate controlling entity
Bharti Enterprises (Holding) Private Limited. It is held by
private trusts of Bharti family, with Mr. Sunil Bharti Mittal's
family trust effectively controlling the company.
iv) Associate:
Seychelles Cable Systems Company Limited
v) Other entities with whom transactions have taken place during the reporting period
a. Fellow subsidiaries
Nxtra Data Limited
Bharti Airtel (Services) Limited
Bharti International (Singapore) Pte Ltd
Bharti Airtel (UK) Limited
Bharti Airtel (France) SAS
Bharti Airtel Lanka (Private) Limited
Bharti Hexacom Limited
b. Other related parties
Airtel Ghana Limited (till 12 October 2021)
Singapore Telecommunication Limited
vi) Key Management Personnel ('KMP')
a. Executive director
Olusegun Ogunsanya (since October 2021)
Raghunath Venkateswarlu Mandava (till September 2021)
Jaideep Paul (since June 2021)
b. Non-Executive directors
Sunil Bharti Mittal
Awuneba Ajumogobia
Douglas Baillie
John Danilovich
Andrew Green
Akhil Gupta
Shravin Bharti Mittal
Annika Poutiainen
Ravi Rajagopal
Arthur Lang (till October 2020)
Kelly Bayer Rosmarin (since October 2020)
Tsega Gebreyes (since October 2021)
c. Others
Olusegun Ogunsanya (till September 2021)
Jaideep Paul (till May 2021)
Ian Ferrao
Michael Foley
Razvan Ungureanu
Luc Serviant
Daddy Mukadi
Neelesh Singh
Ramakrishna Lella
Olivier Pognon (till 15 October 2021)
Edgard Maidou (since 16 October 2021)
Rogany Ramiah
Stephen Nthenge
Vimal Kumar Ambat (since February 2021)
Ashish Malhotra (since October 2020)
Vinny Puri (since March 2021)
C Surendran (since August 2021)
Olubayo Adekanmbi (since December 2021)
In the ordinary course of business, there are certain
transactions among the group entities and all these transactions
are on arm's length basis. However, the intra-group transactions
and balances, and the income and expenses arising from such
transactions, are eliminated on consolidation. The transactions
with remaining related parties for the years ended 31 March 2022
and 2021 respectively, are described below:
The summary of transactions with the above-mentioned parties is
as follows:
For the year ended
----------------------------------------------------------------------------------------------------------------------------
31 March 2022 31 March 2021
-------------------------------------------------------------
Relationship Parent Intermediate Fellow Associates Other Parent Intermediate Fellow Associates Other
company parent subsidiaries related company parent subsidiaries related
entity parties entity parties
-------- ------------- ------------- ----------- -------- ------------- ------------- ----------- --------
Sale /
rendering of
services - 13 59 - 0 - 6 66 - 1
Purchase /
receiving of
services - 19 54 0 0 - 17 52 1 0
Rent and
other
charges - 1 - - - - 1 - - -
Guarantee and
collateral
fee paid - 6 - - - - 10 - - -
Purchase of
assets - - 2 - - - 0 0 - -
Dividend Paid 95 - - - - 95 - - - -
The outstanding balance of the above mentioned related parties
are as follows:
Relationship Parent company Intermediate Fellow Joint venture Associate Other related
parent entity subsidiaries parties
---------------- -------------- -------------- -------------- ---------- --------------
As of 31 March 2022
Trade payables - 10 33 - 0 -
Trade receivables - 5 36 - - -
Corporate guarantee fee - 3 - - - -
payable
Guarantees and - 2,000 - - - -
collaterals taken
(including performance
guarantees)
Reimbursement asset - 25 - - - -
As of 31 March 2021
Trade payables - 9 29 - 1 2
Trade receivables - 3 37 - - 3
Corporate guarantee fee - 2 - - - -
payable
Guarantees and - 7,056 - - - -
collaterals taken
(including performance
guarantees)
Key management compensation
KMP are those persons having authority and responsibility for
planning, directing and controlling the activities of the group,
directly or indirectly, including any director, whether executive
or otherwise. For the group, these include executive committee
members. Remuneration to key management personnel were as
follows:
For the year ended
------------------------------
31 March 2022 31 March 2021
-------------- --------------
Short-term employee benefits 10 8
Performance linked incentive 3 3
Share-based payment 2 1
Other long term benefits 2 4
Other benefits 1 1
18 17
============== ==============
17. 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
------------------------------ -----------------------------------------------
31 March 2022 31 March 2021 31 March 2022 31 March 2021
-------------- -------------- -------------- -------------------------------
Financial assets
FVTPL
Derivatives
- Forward and option
contracts Level 2 2 12 2 12
- Currency swaps and
interest rate swaps Level 2 3 0 3 0
- Cross currency swaps Level 3 1 1 1 1
Other bank balances Level 2 16 - 16 -
Investments Level 2 0 0 0 0
Amortised cost
Trade receivables 123 113 123 113
Cash and cash equivalents 638 813 638 813
Other bank balances 362 282 362 282
Balance held under mobile money
trust 513 440 513 440
Other financial assets 131 83 131 83
1,789 1,744 1789 1,744
============== ============== ============== ===============================
Financial liabilities
FVTPL
Derivatives
- Forward and option
contracts Level 2 4 6 4 6
- Currency swaps and
interest rate swaps Level 2 0 2 0 2
- Cross currency swaps Level 3 4 3 4 3
- Embedded derivatives Level 2 1 1 1 1
Amortised cost
Borrowings - fixed rate Level 1 1,015 2,403 1,016 2,479
Borrowings - fixed rate Level 2 267 100 264 98
Put option liability Level 3 579 - 579 -
Borrowings 990 836 990 836
Trade payables 404 366 404 366
Mobile money wallet balance 496 432 496 432
Other financial liabilities 516 539 516 539
4,276 4,688 4,274 4,762
============== ============== ============== ===============================
The following methods/assumptions were used to estimate the fair
values:
-- 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.
-- Fair value of quoted financial instruments is based on quoted
market price at the reporting date.
-- The fair value of non-current financial assets, long-term
borrowings and other financial liabilities is estimated by
discounting future cash flows using current rates applicable to
instruments with similar terms, currency, credit risk and remaining
maturities.
-- The fair values of derivatives are estimated by using pricing
models, wherein the inputs to those models are based on readily
observable market parameters. The valuation models used by the
group reflect the contractual terms of the derivatives (including
the period to maturity), and market-based parameters such as
interest rates, foreign exchange rates, volatility etc. These
models do not contain a high level of subjectivity as the valuation
techniques used do not require significant judgement and inputs
thereto are readily observable.
-- The fair value of the put option liability to buy back the
stake held by non-controlling interest in AMC BV (refer to Note
4(g)) is measured at the present value of the redemption amount
(i.e. expected cash outflows). Since, the liability will be based
on fair value of the equity shares of AMC BV (subject to a cap) at
the end of 48 months, the expected cash flows are estimated by
determining the projected equity valuation of the AMC BV at the end
of 48 months and applying a cap thereon.
During the year ended 31 March 2022 and year ended 31 March 2021
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 31 March 2022 and 31 March 2021:
Financial assets / liabilities Inputs used
-------------------------------------------------- ------------------------------------------------
- Currency swaps, forward and option contracts and Forward foreign currency exchange rates, Interest rate
other bank balances
- 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 borrowing / other Prevailing interest rates in market, Future payouts,
financial Interest rates
liabilities
Reconciliation of fair value measurements categorised within
level 3 of the fair value hierarchy - Financial
Assets/(Liabilities) (net)
-- Cross Currency Swaps (CCS)
For the year ended
----------------------------
31 March 2022 31 March 2021
------------- -------------
Opening Balance (3) -
Issuance(1) - -
Recognised in finance costs in profit and
loss(unrealized)(2) 0 (3)
------------- -------------
Closing Balance (3) (3)
------------- -------------
(1) The Group during the year ended 31 March 2021 had entered
into a Cross Currency Swap (CCS) in one of its subsidiaries, which
was accounted for as FVTPL. The fair value of CCS was estimated
based on the contractual terms of the CCS and parameters such as
interest rates, foreign exchange rates etc. Since, the data from
any observable markets in respect of interest rates was not
available, the interest rates were considered to be significant
unobservable inputs to the valuation of this CCS.
(2) These amounts represent the amounts recognised in the
financial statements during the year excluding the initial
recognition deferment impact.
-- Put option liability (refer to note 4(g))
For the year ended
----------------------------
31 March 2022 31 March 2022
------------- -------------
Opening Balance - -
Liability recognized by debiting transaction
with NCI reserve 575 -
Recognized in finance costs in profit and
loss (unrealized) 4 -
------------- -------------
Closing Balance 579 -
------------- -------------
18. Assets and Liabilities held for sale
Assets and liabilities of disposal groups held for sale at 31
March 2021 related to our telecommunication tower subsidiary in
Madagascar (part of Francophone Africa segment) and 162 towers and
related liabilities in Rwanda (part of East Africa segment).
During the year ended 31 March 2022, the sale of 162 towers in
Rwanda and tower company in Madagascar has been completed and thus
the related assets and liabilities held for sale have been
de-recognised.
The disposal groups were stated at their carrying values and
comprised the following assets and liabilities:
As of
31 March 2022 31 March 2021
------------- -------------
Assets of disposal group classified as held for sale
Property, plant and equipment - 19
Capital work-in-progress - 0
Right of use assets - 5
Income tax assets - 0
Deferred tax assets - 2
Trade receivables - 0
Cash and cash equivalents - 1
Loans and security deposits - 0
Other current assets - 4
------------- -------------
- 31
============= =============
Liabilities of disposal group classified as held for sale
Lease liabilities - 7
Provisions - 1
Deferred tax liabilities - 1
Trade payables - 2
Other current liabilities - 8
------------- -------------
- 19
============= =============
As of 31 March 2022, the cumulative other comprehensive income
relating to the disposal group classified as held for sale is Nil
(as of 31 March 2021: other comprehensive loss of USD 4m).
19. Events after the balance sheet date
No material subsequent events or transactions have occurred
since the date of statement of financial position except as
disclosed below:
-- The Board recommended a final dividend of 3 cents per share on 10 May 2022.
-- In April 2022, one of the Group's subsidiaries, SMARTCASH
Payment Service Bank limited , has received the final approval from
the Central Bank of Nigeria for a full Payment Service Bank (PSB)
licence affording the Group the opportunity to deliver a full suite
of mobile money services in Nigeria
-- In April 2022, one of the Group's subsidiaries, Airtel Mobile
Commerce Nigeria Ltd, has been awarded with full super agent
licence by the Central Bank of Nigeria. The licence allows the
Group to create an agency network that can service the customers of
licenced Nigerian banks, payment service banks and licenced mobile
money operators in Nigeria.
Appendix
Additional information pertaining to three months ended March
31, 2022
Consolidated Statement of Comprehensive Income (unaudited)
(All amounts are in US Dollar Millions; unless stated
otherwise)
For three months ended
--------------------------------------------------
31 March 2022 31 March 2021
-------------- ----------------------------------
Income
Revenue 1,222 1,038
Other income 2 1
1,224 1,039
Expenses
Network operating expenses 213 183
Access charges 104 97
License fee and spectrum usage charges 78 53
Employee benefits expense 77 67
Sales and marketing expenses 60 50
Impairment loss on financial assets (1) (1)
Other expenses 115 97
Depreciation and amortisation 188 174
834 720
Operating profit 390 319
Finance costs 136 106
Finance income (5) (2)
Other non-operating income (101) -
Share of profit for associate 0 (0)
Profit before tax 360 215
Tax expense / (credit) 120 61
Profit for the period 240 154
Profit before tax (as presented above) 360 215
Add: Exceptional items (net) (51) (1)
Underlying profit before tax 309 214
---------------------------------------------------------------- -------------- ----------------------------------
Profit after tax (as presented above) 240 154
Add: Exceptional items (net) (52) (22)
Underlying profit after tax 188 132
---------------------------------------------------------------- -------------- ----------------------------------
Other comprehensive income ('OCI')
Items to be reclassified subsequently to profit or loss:
Net losses due to foreign currency translation
differences (39) (94)
Share of OCI of associate 1 -
Net loss on net investments hedge - 9
(38) (85)
-------------- ----------------------------------
Items not to be reclassified subsequently to profit or loss:
Re-measurement gain on defined benefit plans 0 (0)
Tax expense on above (0) 0
0 (0)
-------------- ----------------------------------
Other comprehensive loss for the period (38) (85)
-------------- ----------------------------------
For three months ended
--------------------------------------------------
31 March 2022 31 March 2021
-------------- ----------------------------------
Total comprehensive income for the period 202 69
-------------- ----------------------------------
Profit for the period attributable to: 240 154
Owners of the Company 190 132
Non-controlling interests 50 22
Other comprehensive loss for the period attributable to: (38) (85)
Owners of the Company (38) (80)
Non-controlling interests (0) (5)
Total comprehensive income for the period attributable to: 202 69
Owners of the Company 152 52
Non-controlling interests 50 17
Alternative performance measures (APMs)
Introduction
In the reporting of financial information, the directors have
adopted various APMs. These measures are not defined by
International Financial Reporting Standards (IFRS) and therefore
may not be directly comparable with other companies APMs, including
those in the Group's industry.
APMs should be considered in addition to, and are not intended
to be a substitute for, or superior to, IFRS measurements.
Purpose
The directors believe that these APMs assist in providing
additional useful information on the underlying trends, performance
and position of the Group.
APMs are also used to enhance the comparability of information
between reporting periods and geographical units (such as
like-for-like sales), by adjusting for non-recurring or
uncontrollable factors which affect IFRS measures, to aid users in
understanding the Group's performance. Consequently, APMs are used
by the directors and management for performance analysis, planning,
reporting and incentive-setting purposes.
The directors believe the following metrics to be the APMs used
by the Group to help evaluate growth trends, establish budgets and
assess operational performance and efficiencies. These measures
provide an enhanced understanding of the Group's results and
related trends, therefore increasing transparency and clarity into
the core results of the business.
The following metrics are useful in evaluating the Group's
operating performance:
APM Closest Adjustments to reconcile to IFRS measure Definition and purpose
equivalent Table
IFRS measure reference(1)
--------------------------
Underlying Revenue The Group defines
revenue * Exceptional items underlying revenue as
revenue for the period
Table A adjusted for exceptional
items.
The directors view
underlying revenue to be
a meaningful measure to
analyse the Group's
revenue,
excluding exception
items.
Exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison of the Group's
performance on a period
to period basis and could
distort the understanding
of our performance for
the period and
the comparability between
periods and hence are
adjusted to arrive at
underlying revenue.
-------------- -------------- ------------------------------------------------------------ ------------- --------------------------
Underlying Operating The Group defines
EBITDA and profit * Depreciation and amortisation underlying EBITDA as
margin operating profit/(loss)
for the period before
* Exceptional items depreciation
and amortisation and
adjusted for exceptional
items.
Table B The Group defines
underlying EBITDA margin
as underlying EBITDA
divided by underlying
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 APMs.
Depreciation and
amortisation is a
non-cash item which
fluctuates depending on
the timing
of capital investment and
useful economic life.
Directors believe that a
measure which removes
this volatility improves
comparability of the
Group's results period on
period and hence is
adjusted to arrive at
underlying EBITDA and
margin.
Exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison of the Group's
performance on a
period-to-period
basis and could distort
the understanding of our
performance for the
period and the
comparability
between periods and hence
are adjusted to arrive at
underlying EBITDA and
margin.
-------------- -------------- ------------------------------------------------------------ ------------- --------------------------
Underlying Profit / The Group defines
profit / (loss) before * Exceptional items underlying profit/(loss)
(loss) before tax before tax as
tax Table C profit/(loss) before tax
adjusted
for exceptional items.
The directors view
underlying profit/(loss)
before tax to be a
meaningful measure to
analyse
the Group's
profitability.
Exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison of the Group's
performance on a
period-to-period
basis and could distort
the understanding of our
performance for the
period and the
comparability
between periods and hence
are adjusted to arrive at
underlying profit/(loss)
before tax.
-------------- -------------- ------------------------------------------------------------ ------------- --------------------------
Effective tax Reported tax The Group defines
rate rate * Exceptional items effective tax rate as
reported tax rate
(reported tax charge
* Foreign exchange rate movements divided by
reported profit before
Table D tax) adjusted for
* One-off tax impact of prior period, tax litigation exceptional items,
settlement and impact of tax on permanent differences foreign exchange rate
movements
and one-off tax items of
prior period adjustment,
tax settlements and
impact of permanent
differences on tax.
This provides an
indication of the current
on-going tax rate across
the Group.
Exceptional tax items or
any tax arising on
exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison
of the Group's
performance on a
period-to-period basis
and could distort the
understanding
of our performance for
the period and the
comparability between
periods and hence are
adjusted
to arrive at effective
tax rate.
Foreign exchange rate
movements are specific
items that are non-tax
deductible in a few of
the entities which are
loss making and where DTA
is not yet triggered and
hence are considered
to hinder comparison of
the Group's effective tax
rate on a
period-to-period basis
and therefore
excluded to arrive at
effective tax rate.
One-off tax impact on
account of prior period
adjustment, any tax
litigation settlement and
tax impact on permanent
differences are
additional specific items
that because of their
size
and frequency in the
results, are considered
to hinder comparison of
the Group's effective
tax rate on a
period-to-period basis.
-------------- -------------- ------------------------------------------------------------ ------------- --------------------------
Underlying Profit/(loss) The Group defines
profit/(loss) for the * Exceptional items underlying profit/(loss)
after tax period after tax as
Table E profit/(loss) for the
period adjusted
for exceptional items.
The directors view
underlying profit/(loss)
after tax to be a
meaningful measure to
analyse
the Group's
profitability.
Exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison of the Group's
performance on a
period-to-period
basis and could distort
the understanding of our
performance for the
period and the
comparability
between periods and hence
are adjusted to arrive at
underlying profit/(loss)
after tax.
-------------- -------------- ------------------------------------------------------------ ------------- --------------------------
Earnings per EPS The Group defines
share before * Exceptional items earnings per share before
exceptional exceptional items as
items profit/(loss) for the
Table F period
before exceptional items
attributable to owners of
the company divided by
the weighted average
number of ordinary shares
in issue during the
financial period.
This measure reflects the
earnings per share before
exceptional items for
each share unit
of the company.
Exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison of the Group's
performance on a
period-to-period
basis and could distort
the understanding of our
performance for the
period and the
comparability
between periods and hence
are adjusted to arrive at
earnings for the purpose
of earnings per
share before exceptional
items.
-------------- -------------- ------------------------------------------------------------ ------------- --------------------------
Operating Cash The Group defines
free cash generated * Income tax paid operating free cash flow
flow from as net cash generated
operating Table G from operating activities
activities * Changes in working capital before income tax paid,
changes in working
capital, other non-cash
* Other non-cash items items, non-operating
income
and exceptional items,
* Non-operating income less capital
expenditures. The Group
views operating free cash
* Exceptional items flow
as a key liquidity
measure, as it indicates
* Capital expenditures the cash available to pay
dividends, repay debt
or make further
investments in the Group.
-------------- -------------- ------------------------------------------------------------ ------------- --------------------------
Net debt and Borrowings The Group defines net
leverage * Lease liabilities debt as borrowings
ratio including lease
liabilities less cash and
* Cash and cash equivalent Table H cash equivalents,
term deposits with banks,
deposits given against
* Term deposits with banks borrowings/non-derivative
financial instruments,
processing costs related
* Deposits given against borrowings/ non-derivative to borrowings and fair
financial instruments value hedge adjustments.
The Group defines
leverage ratio as net
* Fair value hedges debt divided by
underlying EBITDA.
The directors view net
debt and the leverage
ratio to be meaningful
measures to monitor the
Group's ability to cover
its debt through its
earnings.
-------------- -------------- ------------------------------------------------------------ ------------- --------------------------
Return on No direct The Group defines return
capital equivalent * Exceptional items to arrive at underlying EBIT on capital employed
employed ('ROCE') as underlying
EBIT divided by average
capital employed.
The directors view ROCE
Table I as a financial ratio that
measures the Group's
profitability and the
efficiency with which its
capital is being
utilised.
The Group defines
underlying EBIT as
operating profit/(loss)
for the period adjusted
for exceptional
items.
Exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison of the Group's
performance on a
period-to-period
basis and could distort
the understanding of our
performance for the
period and the
comparability
between periods and hence
are adjusted to arrive at
Underlying EBIT.
Capital employed is
defined as sum of equity
attributable to owners of
the company,
non-controlling
interests and net debt.
Average capital employed
is average of capital
employed at the closing
and beginning of the
relevant period.
For quarterly
computations, ROCE is
calculated by dividing
underlying EBIT for the
preceding
12 months by the average
capital employed (being
the average of the
capital employed averages
for the preceding four
quarters).
-------------- -------------- ------------------------------------------------------------ ------------- --------------------------
(1 Refer "Reconciliation between GAAP and Alternative
Performance Measures" for respective table.)
Some of the Group's IFRS measures and APMs are translated at
constant currency exchange rates to measure the organic performance
of the Group. In determining the percentage change in constant
currency terms, both current and previous financial reporting
period's results have been converted using exchange rates
prevailing as on 31 March 2021. Reported currency percentage change
is derived on the basis of the average actual periodic exchange
rates for that financial period. Variances between constant
currency and reported currency percentages are due to exchange rate
movements between the previous financial reporting period and the
current period.
Changes to APMs
Charity and donations are not related to the trading performance
of the Group and hence were adjusted to arrive at underlying EBITDA
and margin till previous periods. However, with launch of our
sustainability strategy in current year, wherein "Access to
educational goal" is one of the key goals, hence, the Group has
revisited the definition to include the CSR expense as part of the
underlying EBITDA, margin and operating free cash flow. Given the
size in prior years, no changes have been made to the prior year
figures.
During the year following APMs have been removed:
-- Free cash flows - since the Group's dividends are no longer linked to such metric.
-- Restated EPS - as this is no longer valid, as there has been
no significant change in the number of shares issued between the
current and previous financial reporting periods.
-- Adjusted effective tax rate - since adjustments related to
any tax arising on exceptional items or any exceptional tax items
are now adjusted in arriving at the effective tax rate, the
separate APM for adjusted effective tax rate has been removed.
Reconciliation between GAAP and Alternative Performance
Measures
Table A: Underlying revenue
Description Unit Year ended
of measure
-------------------- ------------- ------------------------
March 2022 March 2021
-------------------- ------------- ----------- -----------
Revenue $m 4,714 3,908
Less:
Exceptional items $m - (20)
-------------------- ------------- ----------- -----------
Underlying revenue $m 4,714 3,888
-------------------- ------------- ----------- -----------
Table B: Underlying EBITDA and margin
Description Unit Year ended
of measure
-------------------------------- ------------- ------------------------
March 2022 March 2021
-------------------------------- ------------- ----------- -----------
Operating profit $m 1,535 1,119
Add:
Depreciation and amortisation $m 744 681
Charity and donation (1) $m - 6
Exceptional items $m 32 (14)
Underlying EBITDA $m 2,311 1,792
Underlying revenue $m 4,714 3,888
-------------------------------- ------------- ----------- -----------
Underlying EBITDA margin
(%) % 49.0% 46.1%
-------------------------------- ------------- ----------- -----------
(1) Refer changes to APMs in Alternative performance measure
(APMs) section.
Table C: Underlying profit / (loss) before tax
Description Unit Year ended
of measure
---------------------------- ------------- ------------------------
March 2022 March 2021
---------------------------- ------------- ----------- -----------
Profit / (loss) before tax $m 1,224 697
Exceptional items (net) $m (60) (14)
Underlying profit / (loss)
before tax $m 1,164 683
-----------
Table D: Effective tax rate
Description Unit Year ended
of measure
------------------------------- -------------
March 2022 March 2021
------------------------------- ------------- --------------------------------- ---------------------------------
Profit Income Tax Profit Income Tax
before tax expense rate before tax expense rate
taxation % taxation %
------------------------------- ------------- ---------- ------------- ------ ---------- ------------- ------
Reported effective
tax rate $m 1,224 469 38.3% 697 282 40.5%
Adjusted for:
Exceptional items (provided
below) $m (60) 2 (14) 36
Foreign exchange rate
movements for non-DTA
operating companies
& holding companies $m 50 - 42 -
One-off adjustment and
tax on permanent differences $m (12) (2) - (5)
Effective tax rate $m 1,202 469 39.0% 725 313 43.2%
------
Exceptional items
1. Deferred tax asset
recognition $m - - - 36
2. Service Revenues $m - - (20) -
3. Gain on sale of tower
assets $m (111) 0 - -
4. Employee restructuring $m - - 6 -
cost
5. Bonds prepayment $m 19 - - -
cost
6. Provision for settlement
of contractual dispute $m 12 2 - -
7. Spectrum fee agreement $m 20 - - -
cost
Total $m (60) 2 (14) 36
------
Table E: Underlying profit / (loss) after tax
Description Unit Year ended
of measure
---------------------------------- ------------- ------------------------
March 2022 March 2021
---------------------------------- ------------- ----------- -----------
Profit / (loss) after tax $m 755 415
Exceptional items $m (62) (50)
Underlying profit / (loss) after
tax $m 693 365
-----------
Table F: Earnings per share before exceptional items
Description Unit Year ended
of
measure
------------------------------------------ ---------- ------------------------
March 2022 March 2021
------------------------------------------ ---------- ----------- -----------
Profit for the period attributable
to owners of the company $m 631 339
Operating and Non-operating exceptional
items $m (60) (14)
Tax exceptional items $m (2) (36)
Non-controlling interest exceptional
items $m 33 19
------------------------------------------ ---------- ----------- -----------
Profit for the period attributable
to owners of the company-
before exceptional items $m 602 308
Weighted average number of ordinary
shares in issue during the financial
period. Million 3,754 3,758
Earnings per share before exceptional
items Cents 16.0 8.2
-----------
Table G: Operating free cash flow
Description Unit Year ended
of measure
------------------------------------------- ------------- ------------------------
March 2022 March 2021
------------------------------------------- ------------- ----------- -----------
Net cash generated from operating
activities $m 2,011 1,666
Add: Income tax paid $m 293 195
Net cash generation from operation
before tax $m 2,304 1,861
Less: Changes in working capital
Increase in trade receivables $m 18 8
(Decrease)/Increase in inventories $m (4) 4
(Increase)/Decrease in trade
payables $m (34) 38
Increase in mobile money wallet
balance $m (64) (139)
Increase in provisions $m (14) (1)
Increase in deferred revenue $m (27) (17)
Decrease in income received
in advance $m - 1
Increase in other financial
and non-financial liabilities $m (50) (18)
Increase in other financial
and non-financial assets $m 144 48
Operating cash flow before changes
in working capital $m 2,273 1,785
Other non-cash adjustments $m 6 15
Charity and donation (1) $m - 6
Operating exceptional items $m 32 (14)
Underlying EBITDA $m 2,311 1,792
Less: Capital expenditure $m (656) (614)
Operating free cash flow $m 1,655 1,178
-----------
(1) Refer changes to APMs in Alternative performance measure
(APMs) section.
Table H: Net debt and leverage
Description Unit As at As at
of measure
---------------------------------------------- -------------
March 2022 March 2021
---------------------------------------------- ------------- -------------------------- -------------------------
Long term borrowing, net of current
portion $m 1,486 1,871
Short-term borrowings and current
portion of long-term borrowing $m 786 1,468
Add: Processing costs related to
borrowings $m 5 5
Add/(less): Fair value hedge adjustment $m (16) (21)
Less: Cash and cash equivalents $m (638) (813)
Less: Term deposits with banks $m (220) (257)
Less: Deposits given against borrowings/ $m (122) -
non-derivative financial instruments
Add: Lease liabilities $m 1,660 1,277
Net debt $m 2,941 3,530
-------------------------
Underlying EBITDA (LTM) $m 2,311 1,792
Leverage (LTM) times 1.3x 2.0x
---------------------------------------------- ------------- -------------------------- -------------------------
Table I: Return on capital employed
Description Unit Year ended
of
measure
---------------------------------- ---------- ------------------------
March 2022 March 2021
---------------------------------- ---------- ----------- -----------
Operating profit $m 1,535 1,119
Less:
Operating exceptional items $m 32 (14)
---------------------------------- ---------- ----------- -----------
Underlying EBIT $m 1,567 1,105
---------------------------------- ---------- ----------- -----------
Equity attributable to owners of
the Company $m 3,502 3,405
Non-controlling interests (NCI) $m 147 (52)
Net debt (refer Table H) $m 2,941 3,530
---------------------------------- ---------- ----------- -----------
Capital employed $m 6,590 6,883
---------------------------------- ---------- ----------- -----------
Average capital employed (1) $m 6,736 6,705
---------------------------------- ---------- ----------- -----------
Return on capital employed % 23.3% 16.5%
---------------------------------- ---------- ----------- -----------
(1) Average capital employed is calculated as average of capital
employed at closing and opening of relevant period. Capital
employed at the beginning of year ended 31 March 2022 and 2021 is $
6,883m and $ 6,528m respectively.
Glossary
Technical and Industry Terms
4G data customer A customer having a 4G handset and who has used at least
1 MB on any of the Group's GPRS,
3G & 4G network in the last 30 days.
---------------------------------------------------------- ----------------------------------------------------------
Airtel Money (mobile money) Airtel Money is the brand name for Airtel Africa's mobile
money products and services. The
term is used interchangeably with 'mobile money' when
referring to our mobile money business,
finance, operations and activities.
---------------------------------------------------------- ----------------------------------------------------------
Airtel Money ARPU Mobile money average revenue per user per month. This is
derived by dividing total mobile
money revenue during the relevant period by the average
number of active mobile money customers
and dividing the result by the number of months in the
relevant period.
---------------------------------------------------------- ----------------------------------------------------------
Airtel Money customer base Total number of active subscribers who have enacted any
mobile money usage event in last 30
days.
---------------------------------------------------------- ----------------------------------------------------------
Airtel Money customer penetration The proportion of total Airtel Africa active mobile
customers who use mobile money services.
Calculated by dividing the mobile money customer base by
the Group's total customer base.
---------------------------------------------------------- ----------------------------------------------------------
Airtel Money transaction value Any financial transaction performed on Airtel Africa's
mobile money platform.
---------------------------------------------------------- ----------------------------------------------------------
Airtel Money transaction value per customer per month Calculated by dividing the total mobile money transaction
value on the Group's mobile money
platform during the relevant period by the average number
of active mobile money customers
and dividing the result by the number of months in the
relevant period.
---------------------------------------------------------- ----------------------------------------------------------
Airtime credit service A value-added service where the customer can take an
airtime credit and continue to use our
voice and data services, with the credit recovered
through subsequent customer recharge. This
is classified as a Mobile Services product (not a Mobile
Money product).
---------------------------------------------------------- ----------------------------------------------------------
ARPU Average revenue per user per month. This is derived by
dividing total revenue during the relevant
period by the average number of customers during the
period and dividing the result by the
number of months in the relevant period.
---------------------------------------------------------- ----------------------------------------------------------
Average customers The average number of active customers for a period.
Derived from the monthly averages during
the relevant period. Monthly averages are calculated
using the number of active customers
at the beginning and the end of each month.
---------------------------------------------------------- ----------------------------------------------------------
Capital expenditure An alternative performance measure (non-GAAP). Defined as
investment in gross fixed assets
(both tangible and intangible but excluding spectrum and
licences) plus capital work in progress
(CWIP), excluding provisions on CWIP for the period.
---------------------------------------------------------- ----------------------------------------------------------
Constant currency The Group has presented certain financial information
that is calculated by translating the
results for the current financial year and previous
financial years at a fixed 'constant currency'
exchange rate, which is done to measure the organic
performance of the Group. Growth rates
for reporting regions and service segments are in
constant currency as it better represents
the underlying performance of the business. Constant
currency growth rates for prior periods
are calculated using closing exchange rates as at the end
of prior period.
---------------------------------------------------------- ----------------------------------------------------------
Customer Defined as a unique active subscriber with a unique
mobile telephone number who has used any
of Airtel's services in the last 30 days.
---------------------------------------------------------- ----------------------------------------------------------
Customer base The total number of active subscribers that have used any
of our services (voice calls, SMS,
data usage or mobile money transaction) in the last 30
days.
---------------------------------------------------------- ----------------------------------------------------------
Data ARPU Data average revenue per user per month. Data ARPU is
derived by dividing total data revenue
during the relevant period by the average number of data
customers and dividing the result
by the number of months in the relevant period.
---------------------------------------------------------- ----------------------------------------------------------
Data customer base The total number of subscribers who have consumed at
least 1 MB on the Group's GPRS, 3G or
4G network in the last 30 days.
---------------------------------------------------------- ----------------------------------------------------------
Data customer penetration The proportion of customers using data services.
Calculated by dividing the data customer
base by the total customer base.
---------------------------------------------------------- ----------------------------------------------------------
Data usage per customer per month Calculated by dividing the total MBs consumed on the
Group's network during the relevant period
by the average data customer base over the same period
and dividing the result by the number
of months in the relevant period.
---------------------------------------------------------- ----------------------------------------------------------
Digitalisation We use the term digitalisation in its broadest sense to
encompass both digitisation actions
and processes that convert analogue information into a
digital form and thereby bring customers
into the digital environment, and the broader
digitalisation processes of controlling, connecting
and planning processes digitally; the processes that
effect digital transformation of our
business, and of industry, economics and society as a
whole through bringing about new business
models, socio-economic structures and organisational
patterns.
---------------------------------------------------------- ----------------------------------------------------------
Diluted earnings per share Diluted EPS is calculated by adjusting the profit for the
year attributable to the shareholders
and the weighted average number of shares considered for
deriving basic EPS, for the effects
of all the shares that could have been issued upon
conversion of all dilutive potential shares.
The dilutive potential shares are adjusted for the
proceeds receivable had the shares actually
been issued at fair value. Further, the dilutive
potential shares are deemed converted as
at beginning of the period, unless issued at a later date
during the period.
---------------------------------------------------------- ----------------------------------------------------------
Earnings per share (EPS) EPS is calculated by dividing the profit for the period
attributable to the owners of the
company by the weighted average number of ordinary shares
outstanding during the period.
---------------------------------------------------------- ----------------------------------------------------------
Foreign exchange rate movements for non-DTA operating Foreign exchange rate movements are specific items that
companies are non-tax deductible in a few of
and holding companies our operating entities, hence these hinder a
like-for-like comparison of the Group's effective
tax rate on a period-to-period basis and are therefore
excluded when calculating the effective
tax rate.
---------------------------------------------------------- ----------------------------------------------------------
Indefeasible Rights of Use (IRU) A standard long-term leasehold contractual agreement that
confers upon the holder the exclusive
right to use a portion of the capacity of a fibre route
for a stated period.
---------------------------------------------------------- ----------------------------------------------------------
Information and communication technologies (ICT) ICT refers to all communication technologies, including
the internet, wireless networks, cell
phones, computers, software, middleware,
videoconferencing, social networking, and other media
applications and services.
---------------------------------------------------------- ----------------------------------------------------------
Interconnect user charges (IUC) Interconnect user charges are the charges paid to the
telecom operator on whose network a
call is terminated.
---------------------------------------------------------- ----------------------------------------------------------
Lease liability Lease liability represents the present value of future
lease payment obligations.
---------------------------------------------------------- ----------------------------------------------------------
Leverage An alternative performance measure (non-GAAP). Leverage
(or leverage ratio) is calculated
by dividing net debt at the end of the relevant period by
the underlying EBITDA for the preceding
12 months.
---------------------------------------------------------- ----------------------------------------------------------
Minutes of usage Minutes of usage refer to the duration in minutes for
which customers use the Group's network
for making and receiving voice calls. It includes all
incoming and outgoing call minutes,
including roaming calls.
---------------------------------------------------------- ----------------------------------------------------------
Mobile services Mobile services are our core telecom services, mainly
voice and data services, but also including
revenue from tower operation services provided by the
Group and excluding mobile money services.
---------------------------------------------------------- ----------------------------------------------------------
Net debt An alternative performance measure (non-GAAP). The Group
defines net debt as borrowings including
lease liabilities less cash and cash equivalents, term
deposits with banks, processing costs
related to borrowings and fair value hedge adjustments.
---------------------------------------------------------- ----------------------------------------------------------
Net debt to underlying EBITDA (LTM) An alternative performance measure (non-GAAP) Calculated
by dividing net debt as at the end
of the relevant period by underlying EBITDA for the
preceding 12 months (from the end of the
relevant period). This is also referred to as the
leverage ratio.
---------------------------------------------------------- ----------------------------------------------------------
Network towers or 'sites' Physical network infrastructure comprising a base
transmission system (BTS) which holds the
radio transceivers (TRXs) that define a cell and
coordinates the radio link protocols with
the mobile device. It includes all ground-based, roof top
and in-building solutions.
---------------------------------------------------------- ----------------------------------------------------------
Operating company (OpCo) Operating company (or OpCo) is a defined corporate
business unit, providing telecoms services
and mobile money services in the Group's footprint.
---------------------------------------------------------- ----------------------------------------------------------
Operating free cash flow An alternative performance measure (non-GAAP). Calculated
by subtracting capital expenditure
from underlying EBITDA.
---------------------------------------------------------- ----------------------------------------------------------
Operating leverage An alternative performance measure (non-GAAP). Operating
leverage is a measure of the operating
efficiency of the business. It is calculated by dividing
operating expenditure (excluding
regulatory charges) by total revenue.
---------------------------------------------------------- ----------------------------------------------------------
Operating profit Operating profit is a GAAP measure of profitability.
Calculated as revenue less operating
expenditure (including depreciation and amortisation and
operating exceptional items).
---------------------------------------------------------- ----------------------------------------------------------
Other revenue Other revenue includes revenues from messaging, value
added services (VAS), enterprise, site
sharing and handset sale revenue.
---------------------------------------------------------- ----------------------------------------------------------
Reported currency Our reported currency is US dollars. Accordingly, actual
periodic exchange rates are used
to translate the local currency financial statements of
OpCos into US dollars. Under reported
currency the assets and liabilities are translated into
US dollars at the exchange rates prevailing
at the reporting date whereas the statements of profit
and loss are translated into US dollars
at monthly average exchange rates.
---------------------------------------------------------- ----------------------------------------------------------
Smartphone A smartphone is defined as a mobile phone with an
interactive touch screen that allows the
user to access the internet and additional data
applications, providing additional functionality
to that of a basic feature phone which is used only for
making voice calls and sending and
receiving text messages.
---------------------------------------------------------- ----------------------------------------------------------
Smartphone penetration Calculated by dividing the number of smartphone devices
in use by the total number of customers.
---------------------------------------------------------- ----------------------------------------------------------
Total MBs on network Total MBs consumed (uploaded & downloaded) by customers
on the Group's GPRS, 3G and 4G network
during the relevant period.
---------------------------------------------------------- ----------------------------------------------------------
Underlying EBIT Defined as operating profit/(loss) for the period
adjusted for exceptional items.
---------------------------------------------------------- ----------------------------------------------------------
Underlying EBITDA An alternative performance measure (non-GAAP). Defined as
operating profit before depreciation,
amortisation and exceptional items.
---------------------------------------------------------- ----------------------------------------------------------
Underlying EBITDA margin An alternative performance measure (non-GAAP). Calculated
by dividing underlying EBITDA for
the relevant period by revenue for the relevant period.
---------------------------------------------------------- ----------------------------------------------------------
Underlying Revenue An alternative performance measure (non-GAAP). Defined as
revenue before exceptional items.
---------------------------------------------------------- ----------------------------------------------------------
Unstructured Supplementary Service Data Unstructured Supplementary Service Data (USSD), also
known as "quick codes" or "feature codes",
is a communications protocol for GSM mobile operators,
similar to SMS messaging. It has a
variety of uses such as WAP browsing, prepaid callback
services, mobile-money services, location-based
content services, menu-based information services, and
for configuring phones on the network.
---------------------------------------------------------- ----------------------------------------------------------
Voice minutes of usage per customer per month Calculated by dividing the total number of voice minutes
of usage on the Group's network during
the relevant period by the average number of customers
and dividing the result by the number
of months in the relevant period.
---------------------------------------------------------- ----------------------------------------------------------
Weighted average number of shares The weighted average number of shares is calculated by
multiplying the number of outstanding
shares by the portion of the reporting period those
shares covered, doing this for each portion
and then summing the total.
---------------------------------------------------------- ----------------------------------------------------------
Abbreviations
2G Second-generation mobile technology
---------- ------------------------------------------------
3G Third-generation mobile technology
---------- ------------------------------------------------
4G Fourth-generation mobile technology
---------- ------------------------------------------------
ARPU Average revenue per user
---------- ------------------------------------------------
bn Billion
---------- ------------------------------------------------
bps Basis points
---------- ------------------------------------------------
CAGR Compound annual growth rate
---------- ------------------------------------------------
Capex Capital expenditure
---------- ------------------------------------------------
CSR Corporate social responsibility
---------- ------------------------------------------------
DTA Deferred Tax Asset
---------- ------------------------------------------------
EBIT Earnings before interest and tax
---------- ------------------------------------------------
EBITDA Earnings before interest, tax, depreciation and
amortisation
---------- ------------------------------------------------
EPS Earnings per share
---------- ------------------------------------------------
FPPP Financial position and prospects procedures
---------- ------------------------------------------------
GAAP Generally accepted accounting principles
---------- ------------------------------------------------
GB Gigabyte
---------- ------------------------------------------------
HoldCo Holding company
---------- ------------------------------------------------
IAS International accounting standards
---------- ------------------------------------------------
ICT Information and communication technologies
---------- ------------------------------------------------
ICT (Hub) Information communication technology (Hub) IFRS
---------- ------------------------------------------------
IFRS International financial reporting standards
---------- ------------------------------------------------
IMF International monetary fund
---------- ------------------------------------------------
IPO Initial public offering
---------- ------------------------------------------------
KPIs Key performance indicators
---------- ------------------------------------------------
KYC Know your customer
---------- ------------------------------------------------
LTE Long-term evolution (4G technology)
---------- ------------------------------------------------
LTM Last 12 months
---------- ------------------------------------------------
m Million
---------- ------------------------------------------------
MB Megabyte
---------- ------------------------------------------------
MI Minority interest (non-controlling interest)
---------- ------------------------------------------------
NGO Non-governmental organisation
---------- ------------------------------------------------
OpCo Operating company
---------- ------------------------------------------------
P2P Person to person
---------- ------------------------------------------------
PAYG Pay-as-you-go
---------- ------------------------------------------------
QoS Quality of service
---------- ------------------------------------------------
RAN Radio access network
---------- ------------------------------------------------
SIM Subscriber identification module
---------- ------------------------------------------------
Single RAN Single radio access network
---------- ------------------------------------------------
SMS Short messaging service
---------- ------------------------------------------------
TB Terabyte
---------- ------------------------------------------------
Telecoms Telecommunications
---------- ------------------------------------------------
UoM Unit of measure
---------- ------------------------------------------------
USSD Unstructured supplementary service data
---------- ------------------------------------------------
Risk Factors
The Group's business and the industry in which it operates,
together with all other information contained in this document,
including, in particular, the risk factors summarised below.
Additional risks and uncertainties relating to the Group that are
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.
Principal risks summarised
1. We operate in a competitive environment with the potential
for aggressive competition by existing players, or the entry of new
players, which could both put a downward pressure on prices,
adversely affecting our revenue and profitability.
2. Failure to innovate through simplifying the customer
experience, developing adequate digital touchpoints in line with
changing customer needs and competitive landscape could lead to
loss of customers and market share.
3. An inability to invest and upgrade our network and IT
infrastructure could affect our ability to compete effectively in
the market.
4. Cybersecurity threats through internal or external sabotage
or system vulnerabilities could potentially result in customer data
breaches and/or service downtimes.
5. Adverse changes in our external business environment,
macro-economic conditions and/or supply chain processes could lead
to a significant increase in our operating cost structure and
negatively impact profitability.
6. Shortages of skilled telecommunications professionals in some
markets and the inability to identify and develop successors for
key leadership positions could both lead to disruptions in the
execution of our corporate strategy.
7. Our internal control environment is subject to the risk that
controls may become inadequate due to changes in internal or
external conditions, new accounting requirements, delays, or
inaccuracies in reporting.
8. Our telecommunications networks are subject to the risks of
technical failures, aging infrastructure, human error, wilful acts
of destruction or natural disasters.
9. Our multinational footprint means we are exposed to the risks
of currency fluctuations including the availability of funds for
repatriation to the Group company triggered by adverse
macroeconomic conditions in the markets where we operate.
10. We operate in a diverse and dynamic legal, tax and
regulatory environment. A failure to comply with relevant laws and
regulations could lead to penalties, sanctions, and reputational
damage.
11. Continued disruptions and uncertainties caused by the
Covid-19 pandemic may impact the Group's ability to operate its
business effectively and to achieve its objectives.
[1] Alternative performance measures (APM) are described on page
51.
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END
FR FIFIIEIILLIF
(END) Dow Jones Newswires
May 11, 2022 02:02 ET (06:02 GMT)
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