TIDMAAF
RNS Number : 0036U
Airtel Africa PLC
28 July 2022
Airtel Africa plc
Results for the quarter ended 30 June 2022
28 July 2022
Double-digit revenue growth, margin and earnings progression and
further strengthening of our balance sheet
Highlights
-- Revenue grew by 13.0% in reported currency to $1,257m. In
constant currency terms revenue grew by 15.3%.
-- Total revenues, for mobile services and mobile money services
combined, grew in Nigeria by 18.3%, in East Africa by 14.1% and in
Francophone Africa by 11.7%.
-- Revenue growth in constant currency was posted across all
four reporting segments. Mobile Services revenue in Nigeria grew by
18.3%, in East Africa by 11.1% and in Francophone Africa by 10.6%
(and across the Group by 14.2%, with voice revenue up by 11.3% and
data revenue up by 19.8%). Mobile Money revenue grew by 26.5%,
driven by growth of 26.9% in East Africa and 25.4% in Francophone
Africa.
-- EBITDA grew by 14.9% to $614m in reported currency.
-- EBITDA margin was 48.8%, an increase of 78 basis points in
reported currency and 52 basis points in constant currency.
-- Operating profit grew by 20.6% to $425m in reported currency.
-- Profit after tax grew by 25.3% to $178m.
-- Basic EPS increased to 4.4 cents (up by 31.0%). EPS before
exceptional items was 3.8 cents, up from 3.2 cents in the prior
period.
-- Operating free cash flow grew by 10.3% to $473m, while net
cash generated from operating activities reduced by 13.2% to $388m,
mainly due to increased cash tax payments from both higher taxes on
declared dividends and increased taxable profits.
-- Leverage ratio has improved to 1.3x from 1.8x in the prior
period. Post period end, in July 2022, the Group prepaid $450m of
outstanding external debt at HoldCo. The remaining debt at HoldCo
is now $550m, falling due in May 2024.
-- Our total customer base increased to 131.6 million, up 8.9%,
with increased penetration across mobile data (customer base up
9.7%) and mobile money services (customer base up 19.7%).
Alternative performance measures (1) GAAP measures
(Quarter ended) (Quarter ended)
------------------------------------------------------------------ -------------------------------------------------
Description Jun-22 Jun-21 Reported Constant Description Jun-22 Jun-21 Reported
currency currency currency
------------------------ -------------------
$m $m change change $m $m change
------------------------ ------- ------- ---------- ---------- ------------------- ------- ------- ----------
Revenue 1,257 1,112 13.0% 15.3% Revenue 1,257 1,112 13.0%
------------------------ ------- ------- ---------- ---------- ------------------- ------- ------- ----------
EBITDA 614 534 14.9% 16.5% Operating profit 425 352 20.6%
------------------------ ------- ------- ---------- ---------- ------------------- ------- ------- ----------
Profit after
EBITDA margin 48.8% 48.0% 78 bps 52 bps tax 178 142 25.3%
------------------------ ------- ------- ---------- ---------- ------------------- ------- ------- ----------
EPS before exceptional Basic EPS ($
items ($ cents) 3.8 3.2 18.3% cents) 4.4 3.3 31.0%
------------------------ ------- ------- ---------- ---------- ------------------- ------- ------- ----------
Net cash generated
Operating free from operating
cash flow 473 428 10.3% activities 388 447 (13.2%)
------------------------ ------- ------- ---------- ---------- ------------------- ------- ------- ----------
( (1) Alternative performance measures (APM) are described on
page 15.
Segun Ogunsanya, chief executive officer, on the trading
update:
'I am pleased to report that the Group has continued to post
double-digit revenue growth, margin improvement and strong earnings
growth. I am also particularly pleased with our ongoing
strengthening of the balance sheet which continued after the period
ended, with early repayment of $450m of debt at Group level.
As we flagged in our full year announcement, this quarter we
have faced headwinds from outbound voice call barring for customers
who had not yet registered their National Identification Numbers in
Nigeria and the loss of site sharing revenue in those OpCos where
we recently sold towers. Inflation is also having an impact on our
cost base, particularly on energy costs, but our continued
efficiency drives have ensured that we have still been able to
increase our margins, albeit at a slightly slower rate.
After receiving the Payment Service Bank licence in Nigeria just
a few months ago, it is a testament to our prior preparation that
we have already managed to launch our mobile money operations in a
few select locations without any operational issues. We are excited
by the commercial developments and opportunities here. We also
continued to invest for growth and have made a couple of major
additional spectrum acquisitions recently in the DRC and Kenya in
anticipation of continued strong data demand growth in these
markets.
We continue to target growth ahead of the market this year and,
despite inflationary pressures, our continued focus on cost
efficiencies should also support margin resilience. Longer term,
the opportunities for sustainable profitable growth stemming from
our underpenetrated markets for each of mobile voice, data and
mobile money services remain hugely attractive, and we are
confident of continuing to deliver on our growth strategy.'
Airtel Africa plc ('Airtel Africa' or 'Group') results for the
quarter ended 30 June 2022 are unaudited and in the opinion of
management, include all adjustments necessary for the fair
presentation of the results of the same period. The financial
information has been prepared based on International Accounting
Standard 34 (IAS 34) issued by the International Accounting
Standards Board (IASB) approved for use in the UK by the UK
Accounting Standards Endorsement Board (UKEB) and apply the same
accounting policies, presentation and methods of calculation as
those followed in the preparation of the Group's annual
consolidated financial statements for the year ended 31 March 2022
except to the extent required/ prescribed by IAS 34. This report
should be read in conjunction with the audited consolidated
financial statements and related notes for the year ended 31 March
2022. The comparative information has been drawn based on Airtel
Africa plc's audited consolidated financial statements for the year
ended 31 March 2022. Comparative quarterly information is drawn
from the unaudited IAS 34 financials of the respective quarters.
All comparatives and references to the 'prior period' or 'previous
period' in this report are for the reported metrics for the quarter
ended 30 June 2021.
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 conference call at
12:00pm UK time (BST), on Thursday 28 July 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:
Conference call registration link
Key consolidated financial information
Description Unit Quarter ended
of measure
------------------------------- ----------------------------------------
Jun-22 Jun-21 Reported Constant
currency currency
change change
------------------------------- ------- ------- ---------- ----------
Profit and loss summary
------------------------------- ------------- ------- ------- ---------- ----------
Revenue (1) $m 1,257 1,112 13.0% 15.3%
------------------------------- ------------- ------- ------- ---------- ----------
Voice revenue $m 610 562 8.6% 11.3%
------------------------------- ------------- ------- ------- ---------- ----------
Data revenue $m 418 356 17.3% 19.8%
------------------------------- ------------- ------- ------- ---------- ----------
Mobile money revenue
(2) $m 159 124 28.6% 26.5%
------------------------------- ------------- ------- ------- ---------- ----------
Other revenue $m 106 98 8.0% 10.4%
------------------------------- ------------- ------- ------- ---------- ----------
Expenses $m (645) (581) 11.0% 13.7%
------------------------------- ------------- ------- ------- ---------- ----------
EBITDA (3) $m 614 534 14.9% 16.5%
------------------------------- ------------- ------- ------- ---------- ----------
EBITDA margin % 48.8% 48.0% 78 bps 52 bps
------------------------------- ------------- ------- ------- ---------- ----------
Depreciation and amortisation $m (189) (182) 3.9% 6.8%
------------------------------- ------------- ------- ------- ---------- ----------
Operating exceptional
items $m - - 0.0% 0.0%
------------------------------- ------------- ------- ------- ---------- ----------
Operating profit $m 425 352 20.6% 21.5%
------------------------------- ------------- ------- ------- ---------- ----------
Net finance costs $m (151) (97) 55.2%
------------------------------- ------------- ------- ------- ---------- ----------
Non-operating exceptional
items(4) $m - 4 (100.0%)
------------------------------- ------------- ------- ------- ---------- ----------
Profit before tax (5) $m 276 259 6.5%
------------------------------- ------------- ------- ------- ---------- ----------
Tax $m (119) (117) 1.5%
------------------------------- ------------- ------- ------- ---------- ----------
Tax - exceptional items
(6) $m 21 - 0.0%
------------------------------- ------------- ------- ------- ---------- ----------
Total tax charge $m (98) (117) (16.3%)
------------------------------- ------------- ------- ------- ---------- ----------
Profit after tax $m 178 142 25.3%
------------------------------- ------------- ------- ------- ---------- ----------
Non-controlling interest $m (15) (17) (16.1%)
------------------------------- ------------- ------- ------- ---------- ----------
Profit attributable to
owners of the company
- before exceptional
items $m 143 121 18.2%
------------------------------- ------------- ------- ------- ---------- ----------
Profit attributable
to owners of the company $m 163 125 30.9%
------------------------------- ------- ------- ---------- ----------
EPS - before exceptional
items cents 3.8 3.2 18.3%
=============================== ============= ======= ======= ========== ==========
Basic EPS cents 4.4 3.3 31.0%
------------------------------- ------------- ------- ------- ---------- ----------
Weighted average no of
shares million 3,754 3,755 (0.0%)
------------------------------- ------------- ------- ------- ---------- ----------
Capex $m 141 106 33.5%
------------------------------- ------------- ------- ------- ---------- ----------
Operating free cash flow $m 473 428 10.3%
------------------------------- ------------- ------- ------- ---------- ----------
Net cash generated from
operating activities $m 388 447 (13.2%)
------------------------------- ------------- ------- ------- ---------- ----------
Net debt $m 3,056 3,536
------------------------------- ------------- ------- ------- ---------- ----------
Leverage (net debt to
EBITDA) times 1.3x 1.8x
------------------------------- ------------- ------- ------- ---------- ----------
Return on capital employed % 24.6% 18.3% 634 bps
------------------------------- ------- ------- ---------- ----------
Operating KPIs
------------------------------- ------------- ------- ------- ---------- ----------
ARPU $ 3.2 3.1 3.4% 5.4%
------------------------------- ------------- ------- ------- ---------- ----------
Total customer base million 131.6 120.8 8.9%
------------------------------- ------------- ------- ------- ---------- ----------
Data customer base million 46.5 42.4 9.7%
------------------------------- ------------- ------- ------- ---------- ----------
Mobile money customer
base million 27.6 23.1 19.7%
------------------------------- ------- ------- ---------- ----------
(1) Revenue includes inter-segment eliminations of $36m for the
quarter ended 30 June 2022 and $28m for the prior period.
(2) Mobile money revenue post inter-segment eliminations with
mobile services was $123m for the quarter ended 30 June 2022, and
$96m for the prior period.
(3) EBITDA includes other income of $2m for the quarter ended 30
June 2022, and $3m for the prior period.
(4) Non-operating exceptional items in the previous period
include a profit of $4m from the sale of towers in Rwanda.
(5) Profit before tax in the quarter ended 30 June 2022 include
$2m share of profit from associates.
(6) Tax exceptional items in the quarter ended 30 June 2022
reflect the initial recognition of a deferred tax credit of $21m in
Kenya.
Financial review for the quarter ended 30 June 2022
Revenue in reported currency grew by 13.0%. This overall growth
is slightly slower than recent trends due to some specific
challenges this quarter largely as a result of the effect of voice
customers barred in Nigeria and the loss of tower sharing revenues
following the recent sales of towers in Tanzania, Madagascar and
Malawi. Revenue in constant currency grew by 15.3% for the Group.
Excluding these specific challenges growth for the quarter would
have been around 19% in constant currency terms.
Owing to significant growth in mobile money business and
corresponding changes in the organization structure, combined with
changes in the information provided to the Group CEO (Chief
Operating Decision Maker) for the allocation of resources and the
assessment of performance; with effect from April 2022, the Group
has identified mobile money as a new operating and reportable
segment. Thus, the Group now reports segmental performance for
mobile services in Nigeria, East Africa and Francophone Africa, and
for mobile money. The consolidated regional performance, comprising
both mobile services and mobile money, for each of Nigeria, East
Africa and Francophone Africa is provided on page 13 to help with
reconciliation to historical segmental reporting.
Double digit revenue growth was posted across all reporting
segments: with mobile services revenue in Nigeria up 18.3%, East
Africa up 11.1% and Francophone Africa up 10.6% (with overall
mobile services growing by 14.2%, with voice revenue growth of
11.3% and data revenue growth of 19.8%; and with growth of other
revenues of 10.4%, marginally impacted by the c.$7m tower sharing
revenues lost through tower sales). Mobile money revenue grew by
26.5% in constant currency, driven by growth of 26.9% in East
Africa and 25.4% in Francophone Africa.
Net finance costs increased by $54m, as a result of $51m higher
foreign exchange and derivative losses and $6m higher interest on
lease obligations, partially offset by lower interest costs due to
debt reduction (including the repayment of $505m bonds in March
2022).
Total tax charges were $19m lower mainly due to the initial
recognition of a deferred tax credit of $21m in Kenya. Basic EPS
improved to 4.4 cents, while EPS before exceptional items improved
to 3.8 cents. The increase in basic EPS was mainly due to higher
operating profits and the initial recognition of a deferred tax
credit of $21m in Kenya, which more than offset foreign exchange
and derivative losses.
Leverage improved to 1.3x from 1.8x in the prior period, largely
driven by increased cash generation, the expansion of 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. Following the post
period end prepayment of $450m bonds in July 2022, the remaining
debt at HoldCo is now $550m.
GAAP measures
Revenue
Reported revenue increased to $1,257m, growing by 13.0% in
reported currency, and by 15.3% in constant currency driven by both
customer base growth of 8.9% and ARPU growth of 5.4%. The constant
currency growth was partially offset by average currency
devaluations between the periods, mainly in the Central African
franc (13.2%), the Nigerian naira (1.8%), the Kenyan shilling
(8.0%) and the Malawian kwacha (11.2%), in turn partially offset by
appreciation in the Zambian kwacha (23.4%).
Mobile services revenue grew by 14.2% in constant currency,
supported by growth of 18.3% in Nigeria, 11.1% in East Africa and
10.6% in Francophone Africa. Mobile money revenue grew by 26.5% in
constant currency, driven by revenue growth in East Africa of 26.9%
and Francophone Africa of 25.4%.
Revenue growth for the quarter was impacted by the effect of
barring outgoing calls in Nigeria for those customers who had not
submitted their National Identity Numbers ('NINs'). A total of 13.6
million customers were originally barred, out of which 5.3 million
customers (39%) have subsequently submitted their NINs and 2.3
million customers (17%) have been fully verified and unbarred. We
estimate that this resulted in the loss of approximately $34m of
revenues in the quarter, providing a drag on revenue growth of
almost 3% at Group level (impact of 7.5% in Nigeria). The growth in
other revenues was also impacted by c.$7m of tower sharing revenues
lost through associated tower sales.
Operating profit
Operating profit increased by 20.6% to $425m as a result of
revenue growth and modest improvements in operating efficiency in
East Africa and Francophone Africa.
Net finance costs
Net finance costs increased by $54m, as a result of $51m higher
foreign exchange and derivative losses and $6m higher interest on
lease obligations, partially offset by lower interest costs due to
a reduction in debt (including $505m bonds repurchased in March
2022).
The Group's effective interest rate increased to 5.6% compared
to 5.0% in the prior period, largely driven by the repayment of
$935m of HoldCo debt, which carried a lower-than-average coupon,
and due to higher local currency debt at the OpCo level.
Taxation
Total tax charges were $98m, a reduction of $19m, due to the
initial recognition of a deferred tax credit of $21m in Kenya.
Excluding exceptional items, tax was higher by $2m due to higher
operating profit and withholding tax on dividends by
subsidiaries.
Profit after tax
Profit after tax increased by 25.3% to $178m, mainly led by
higher operating profits which more than offset the foreign
exchange and derivative losses. Additionally, the current quarter
benefited from the initial recognition of a deferred tax credit of
$21m in Kenya.
Basic EPS
Basic EPS improved to 4.4 cents, an improvement of 1.1 cents
(+31.0%) from 3.3 cents in the prior period. This increase was
mainly due to higher operating profits and the recognition of a
deferred tax credit of $21m in Kenya this quarter, which more than
offset foreign exchange and derivative losses.
Net cash generated from operating activities
Net cash generated from operating activities was $388m, 13.2%
lower than the $447m of the prior period. This was largely due to
higher cash tax payments as a result of higher dividend tax on
declared dividend and increased taxable profits, partially offset
by higher profit before tax.
Alternative performance measures [1]
EBITDA
EBITDA increased to $614m, up by 14.9% in reported currency, and
by 16.5% in constant currency. Growth in EBITDA was led by revenue
growth and supported by continued improvement in operating
efficiencies which more than offset inflationary cost pressures.
The EBITDA margin improved by 78 basis points in reported currency
to 48.8%.
Foreign exchange had an adverse impact of $23m on revenue, and
$8m on EBITDA, as a result of currency devaluations, mainly in the
Central African franc (13.2%), the Nigerian naira (1.8%), the
Kenyan shilling (8.0%) and the Malawian kwacha (11.2%), in turn
partially offset by appreciation in the Zambian kwacha (23.4%).
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 $45m on revenues, $27m on EBITDA
and $19m on finance costs. Our largest exposure is to the Nigerian
naira, for which a 1% devaluation would have a negative impact of
$19m on revenues, $11m on EBITDA and $7m on finance costs.
Tax
The effective tax rate was 39.9%, compared to 39.1% in the prior
period, largely due to profit mix changes amongst the OpCos and the
impact of withholding taxes on dividends. The effective tax rate is
higher than the weighted average statutory corporate tax rate of
approximately 33%, largely due to the profit mix between various
OpCos and withholding taxes on dividends by subsidiaries.
Exceptional items
Non-operating exceptional items in the previous period relate to
a gain of $4m from the profit on the sale of towers in Rwanda. Tax
exceptional items this quarter benefited from the initial
recognition of a deferred tax credit of $21m in Kenya.
EPS before exceptional items
EPS before exceptional items increased to 3.8 cents, up by 18.3%
from 3.2 cents in the prior period. This increase was mainly due to
higher operating profits which more than offset foreign exchange
and derivative losses .
Operating free cash flow
Operating free cash flow was $473m, up by 10.3%, as higher
EBITDA more than offset increased capital expenditure. Capital
expenditure during the period was $35m higher relating mainly to
planned network expansion.
Leverage
Leverage (net debt to EBITDA) improved to 1.3x at 30 June 2022,
from 1.8x at 30 June 2021, largely driven by increased cash
generation, EBITDA expansion and the receipt of $550m from mobile
money minority investments. Our balance sheet has continued to be
de-risked through a reduction of HoldCo debt to $1bn, from $1.9bn
in the prior period; and the increased localisation of our debt
into the OpCos, such that our HoldCo debt is significantly lower
than gross OpCo debt of $3bn (including lease obligations). In July
2022, our HoldCo debt was reduced even further to $550m, following
the early repayment of $450m of senior notes due in May 2024.
Other significant updates
NIN - SIM linkage implementation 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. A total of 13.6
million customers were initially barred out of which 5.3 million
(39%) have subsequently submitted their NIN and 2.3 million (17%)
have subsequently been verified and unbarred.
As at the end of June 2022, we had collated NIN information for
40.7 million active customers. Revenues for those subscribers who
have not yet linked their NIN with their SIM amount to around 7% of
total revenues from Nigeria, and around 3% of total revenues for
the Group. As we reported might happen, SIM registration has
accelerated, and some SIM consolidation is occurring in response to
implementation, potentially reducing the future financial
impact.
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.
Nigeria mobile money operationalisation
On 29 April 2022, we announced that the Central Bank of Nigeria
('CBN') had confirmed that Smartcash Payment Service Bank limited
('Smartcash'), had received final approval for a full Payment
Service Bank ('PSB') licence, affording the Group the opportunity
to deliver a full suite of mobile money services into Nigeria. This
news followed our announcement of 26 April that the CBN had also
awarded our subsidiary, Airtel Mobile Commerce Nigeria Ltd, with a
full super-agent licence, allowing the business to create an agency
network that can service the customers of licenced Nigerian banks,
payment service banks and licenced mobile money operators in
Nigeria.
On 19 May 2022, we announced that Smartcash had commenced
operations in Nigeria. Services were initially made available at
selected retail touchpoints, and operations are now being expanded
gradually across the country.
This marks the beginning of our journey to revolutionise the
financial services landscape in Nigeria, to help further digitise
the Nigerian economy, and to help bank the unbanked by reaching the
millions of Nigerians who do not currently have access to financial
services by delivering current and savings accounts, payment and
remittance services, debit and prepayment cards and more
sophisticated services.
DRC spectrum acquisition
On 6 June 2022, we announced the purchase of 58 MHz of
additional spectrum in the DRC, spread across 900, 1800, 2100 and
2600 MHz bands, for a gross consideration of $42m. The licence for
paired spectrum in the 2100 band comes up for renewal in September
2032. All the other licences continue until July 2036. This
additional spectrum will support our 4G expansion in the DRC for
both mobile data and fixed wireless home broadband capability,
providing significant capacity to accommodate our continued strong
data growth in the country. DRC is the largest country by area in
our portfolio and our second largest market by population. This
investment reflects our continued confidence in the tremendous
opportunity inherent in the DRC, supporting the local communities
and economies through furthering digital inclusion and
connectivity.
Kenya spectrum acquisition
Post period end, on 15 July 2022, we announced that Airtel Kenya
Networks Limited ('Airtel Kenya'), had purchased 60 MHz of
additional spectrum in the 2600 MHz band from the Communications
Authority of Kenya, for a gross consideration of $40m. The licence
is valid from July 2022 for a period of 15 years. This additional
spectrum will support our 4G expansion in the market for both
mobile data and fixed wireless home broadband capability and will
allow for future 5G rollout, providing significant capacity to
accommodate our continued strong data growth in the country. Airtel
Kenya is one of our largest markets by revenue. This investment
reflects our continued confidence in the tremendous opportunity
inherent in the Kenya market, supporting the local communities and
economies through furthering digital inclusion and
connectivity.
$450m early bond redemption
Post the period end, on 8 July 2022 the Group announced the
settlement of a cash tender offer, redeeming $450m of the $1
billion of 5.35% guaranteed senior notes due 2024 ('Notes'). An
aggregate principal amount of $450m of Notes was accepted for
purchase for a total of $462.6m. All Notes accepted for purchase
were cancelled ahead of their maturity in May 2024. This early
redemption was made out of the Group's cash reserves and is in line
with our strategy of reduction of external foreign currency debt at
Group level.
Information on additional KPIs
An investor relations pack with information on the additional
KPIs and balance sheet is available to download on our website at
airtel.africa/investors .
Financial review for the quarter ended 30 June 2022
Nigeria - Mobile services
Description Unit Quarter ended
of
measure
----------------------- ---------- ----------------------------------------
Jun-22 Jun-21 Reported Constant
currency currency
change change
----------------------- ---------- ------- ------- ---------- ----------
Summarised statement
of operations
----------------------- ---------- ------- ------- ---------- ----------
Revenue $m 517 445 16.2% 18.3%
----------------------- ---------- ------- ------- ---------- ----------
Voice revenue $m 259 238 8.8% 10.8%
----------------------- ---------- ------- ------- ---------- ----------
Data revenue $m 210 171 22.6% 24.8%
----------------------- ---------- ------- ------- ---------- ----------
Other revenue (1) $m 48 36 34.5% 37.0%
----------------------- ---------- ------- ------- ---------- ----------
EBITDA $m 264 246 7.3% 9.2%
----------------------- ---------- ------- ------- ---------- ----------
(424) (424)
EBITDA margin % 51.0% 55.3% bps bps
----------------------- ---------- ------- ------- ---------- ----------
Depreciation and
amortisation $m (75) (63) 19.0% 21.2%
----------------------- ---------- ------- ------- ---------- ----------
Operating exceptional
items $m - - 0.0% 0.0%
----------------------- ---------- ------- ------- ---------- ----------
Operating profit $m 189 183 3.3% 5.1%
----------------------- ---------- ------- ------- ---------- ----------
Capex $m 56 49 14.6% 14.6%
----------------------- ---------- ------- ------- ---------- ----------
Operating free cash
flow $m 208 197 5.4% 7.9%
----------------------- ------- ------- ---------- ----------
Operating KPIs
----------------------- ---------- ------- ------- ---------- ----------
ARPU $ 3.8 3.6 4.9% 6.8%
----------------------- ---------- ------- ------- ---------- ----------
Total customer base Mn 46.0 40.9 12.7%
----------------------- ---------- ------- ------- ---------- ----------
Data customer base Mn 20.5 17.8 15.6%
----------------------- ------- ------- ---------- ----------
(1) Other revenue includes inter-segment revenue of $0.5m in the
quarter ended 30 June 2022. Excluding inter-segment revenue, other
revenue was $47.5m in the quarter ended 30 June 2022.
Revenue grew by 16.2% in reported currency to $517m, and by
18.3% in constant currency. The differential in growth rates was
due to devaluation of the Nigerian naira by 1.8%. The constant
currency revenue growth was driven by both customer base growth of
12.7% and ARPU growth of 6.8%, largely driven by higher data and
other revenue.
Voice revenue grew by 10.8% in constant currency, driven by
customer base growth of 12.7% while voice ARPU growth was flat.
Voice revenue growth was impacted by the barring of outgoing calls
for customers who had not submitted their NINs. A total of 13.6
million customers were initially barred out of which 5.3 million
(39%) have subsequently submitted their NIN and 2.3 million (17%)
have subsequently been verified and unbarred. This has resulted in
a loss of approximately. $34m revenue in the quarter and a
corresponding impact of 7.5 percentage points on the growth
rate.
Data revenue grew by 24.8% in constant currency, driven by data
customer base growth of 15.6% and data ARPU growth of 7.1%. Data
usage per customer increased by 19.1% to 4.6 GB per month (from 3.8
GB in the prior period). As we continued our 4G network rollout,
nearly all our sites in Nigeria (99%) now deliver 4G. For the Q1'23
period, 44.3% of our data customer base were 4G users, contributing
to 77.7% of total data usage. 4G data usage per customer reached
7.4 GB per month, an increase of 45.6% (from 5.1 GB per customer
per month in Q1'22). Compared to recent quarters, data revenue
growth was lower as a result of a slowdown in the growth of data
usage per customer, as well as higher churn due to NIN-related call
barring.
Other revenues grew by 37.0% in constant currency, with the main
contribution coming from the growth in value added services
revenue, led by airtime credit services.
EBITDA was $264m, growing by 9.2% in constant currency. The
EBITDA margin declined to 51.0% from 55.3% due largely to the
increase in operating costs.
Operating free cash flow was $208m, up by 7.9%, due to the
expansion of EBITDA, partially offset by higher capex.
East Africa - Mobile services (1)
Description Unit Quarter ended
of
measure
----------------------- ---------- ----------------------------------------
Jun-22 Jun-21 Reported Constant
currency currency
change change
----------------------- ---------- ------- ------- ---------- ----------
Summarised statement
of operations
----------------------- ---------- ------- ------- ---------- ----------
Revenue $m 359 323 11.3% 11.1%
----------------------- ---------- ------- ------- ---------- ----------
Voice revenue $m 203 178 14.2% 14.1%
----------------------- ---------- ------- ------- ---------- ----------
Data revenue $m 123 105 16.6% 15.9%
----------------------- ---------- ------- ------- ---------- ----------
Other revenue (2) $m 33 39 (15.4%) (14.4%)
----------------------- ---------- ------- ------- ---------- ----------
EBITDA $m 159 140 13.4% 12.5%
----------------------- ---------- ------- ------- ---------- ----------
EBITDA margin % 44.2% 43.4% 81 bps 56 bps
----------------------- ---------- ------- ------- ---------- ----------
Depreciation and
amortisation $m (60) (56) 8.3% 8.4%
----------------------- ---------- ------- ------- ---------- ----------
Operating exceptional
items $m - - 0.0% 0.0%
----------------------- ---------- ------- ------- ---------- ----------
Operating profit $m 99 84 17.0% 15.3%
----------------------- ---------- ------- ------- ---------- ----------
Capex $m 44 31 41.4% 41.4%
----------------------- ---------- ------- ------- ---------- ----------
Operating free cash
flow $m 115 109 5.4% 4.5%
----------------------- ------- ------- ---------- ----------
Operating KPIs
----------------------- ---------- ------- ------- ---------- ----------
ARPU $ 2.1 2.0 4.2% 4.0%
----------------------- ---------- ------- ------- ---------- ----------
Total customer base Mn 58.5 55.4 5.6%
----------------------- ---------- ------- ------- ---------- ----------
Data customer base Mn 18.5 17.3 6.8%
----------------------- ------- ------- ---------- ----------
(1) The East Africa business region includes Kenya, Malawi,
Rwanda, Tanzania, Uganda and Zambia.
(2) Other revenue includes inter-segment revenue of $2.4m in the
quarter ended 30 June 2022. Excluding inter-segment revenue, other
revenue was $31m in the quarter ended 30 June 2022.
East Africa revenue grew by 11.3% in reported currency to $359m,
and by 11.1% in constant currency. The constant currency growth was
made up of voice revenue growth of 14.1% and data revenue growth of
15.9% partially offset by decline in other revenues. The reduction
in other revenues was due to the loss of c.$6m of tower sharing
revenues from tower sales in Malawi and Tanzania. The revenue
growth rates in reported currency and constant currency were quite
similar due to currency appreciation in Zambia almost offsetting
currency devaluations in Malawi, Kenya and Uganda.
Voice revenue grew by 14.1% in constant currency, driven by both
customer base growth of 5.6% and voice ARPU growth of 6.9%. The
customer base growth was largely driven by expansion of both
network coverage and the distribution network. Voice usage per
customer increased by 10.8% to 371 minutes per customer per month,
driving voice ARPU up by 6.9%.
Data revenue grew by 15.9% in constant currency, largely driven
by data customer base growth of 6.8% and data ARPU growth of 4.4%.
Our continued investment in network and expansion of 4G network
infrastructure helped us to grow both the data customer base and
usage levels. 87.0% of our East Africa network sites are now on 4G,
compared with 80% in the prior period. In Q1'23, 4G customers
accounted for 41.5% of our total data customer base and contributed
to 65.4% of total data usage. Total data usage per customer
increased to 3.9 GB per customer per month, up by 30%, and 4G data
usage per customer increased to 6.2 GB per customer per month from
5.4 GB per customer per month in the prior period. Compared to
recent quarters, data revenue growth is slower , as a result of a
slowdown in customer additions in Kenya and Malawi and lower ARPU
growth in Tanzania and Malawi.
EBITDA increased to $159m, up by 12.5% in constant currency. The
EBITDA margin improved to 44.2%, an improvement of 56 basis points
in constant currency, as a result of revenue growth and improved
operating efficiencies.
Operating free cash flow was $115m, up by 4.5%, due largely to
the expansion of EBITDA, partially offset by increased capex.
Francophone Africa - Mobile services (1)
Description Unit Quarter ended
of
measure
----------------------- ---------- ----------------------------------------
Jun-22 Jun-21 Reported Constant
currency currency
change change
----------------------- ---------- ------- ------- ---------- ----------
Summarised statement
of operations
----------------------- ---------- ------- ------- ---------- ----------
Revenue $m 262 253 3.5% 10.6%
----------------------- ---------- ------- ------- ---------- ----------
Voice revenue (2) $m 149 146 1.5% 8.8%
----------------------- ---------- ------- ------- ---------- ----------
Data revenue $m 85 80 6.7% 14.2%
----------------------- ---------- ------- ------- ---------- ----------
Other revenue $m 28 26 4.9% 9.5%
----------------------- ---------- ------- ------- ---------- ----------
EBITDA $m 103 95 8.5% 14.8%
----------------------- ---------- ------- ------- ---------- ----------
EBITDA margin % 39.2% 37.4% 180 bps 144 bps
----------------------- ---------- ------- ------- ---------- ----------
Depreciation and
amortisation $m (47) (52) (10.0%) (3.5%)
----------------------- ---------- ------- ------- ---------- ----------
Operating exceptional
items $m - - 0.0% 0.0%
----------------------- ---------- ------- ------- ---------- ----------
Operating profit $m 56 43 30.7% 36.8%
----------------------- ---------- ------- ------- ---------- ----------
Capex $m 27 20 35.9% 35.9%
----------------------- ---------- ------- ------- ---------- ----------
Operating free cash
flow $m 76 75 1.3% 9.2%
----------------------- ------- ------- ---------- ----------
Operating KPIs
----------------------- ---------- ------- ------- ---------- ----------
ARPU $ 3.2 3.5 (8.2%) (1.9%)
----------------------- ---------- ------- ------- ---------- ----------
Total customer base Mn 27.0 24.5 10.1%
----------------------- ---------- ------- ------- ---------- ----------
Data customer base Mn 7.5 7.4 2.0%
----------------------- ------- ------- ---------- ----------
(1) The Francophone Africa business region includes Chad,
Democratic Republic of the Congo, Gabon, Madagascar, Niger,
Republic of the Congo, and Seychelles.
(2) Voice revenue includes inter-segment revenue of $1m in the
quarter ended 30 June 2022. Excluding inter-segment revenue, voice
revenue was $148m in the quarter ended 30 June 2022.
Revenue grew by 3.5% in reported currency and by 10.6% in
constant currency. The difference in growth rates was due to
devaluation of the Central African franc (13.2%). The revenue
growth in constant currency terms was largely driven by DRC, Niger,
Chad and Gabon.
Voice revenue grew by 8.8% in constant currency, driven by
customer base growth of 10.1% partially offset by voice ARPU
decline of 3.5%. The customer base growth was driven by expansion
of both network coverage and distribution infrastructure.
Data revenue grew by 14.2% in constant currency, supported by
average customer base growth of 15.3%. Our continued 4G network
rollout resulted in an increase in total data usage of 45.2% and a
per customer data usage increase of 25.9%. For Q1'23, 4G data users
constituted 49.7% of total data users, compared with 40.0% in the
prior period. 4G users contributed 67.9% of total data usage this
quarter. Data usage per customer increased to 2.9 GB per month (up
from 2.3 GB in the prior period), while 4G data usage per customer
reached 5.0 GB per month, from 4.5 GB in the prior period. Compared
to recent quarters, data revenue growth has slowed as a result of
lower ARPU in Chad and Niger.
EBITDA, at $103m, increased by 14.8% in constant currency. The
EBITDA margin improved to 39.2%, an improvement of 144 basis points
in constant currency. This EBITDA growth was driven by continued
revenue growth and increased operating efficiencies.
Operating free cash flow was $76m, up by 9.2%, due to the
expansion in EBITDA, partially offset by higher capex.
Mobile services
Description Unit Quarter ended
of measure
----------------------------- ------------- ----------------------------------------
Jun-22 Jun-21 Reported Constant
currency currency
change change
----------------------------- ------------- ------- ------- ---------- ----------
Summarised statement
of operations
----------------------------- ------------- ------- ------- ---------- ----------
Revenue (1) $m 1,135 1,018 11.6% 14.2%
----------------------------- ------------- ------- ------- ---------- ----------
Voice Revenue $m 610 562 8.6% 11.3%
----------------------------- ------------- ------- ------- ---------- ----------
Data Revenue $m 418 356 17.3% 19.8%
----------------------------- ------------- ------- ------- ---------- ----------
Other Revenue $m 107 99 8.2% 10.6%
----------------------------- ------------- ------- ------- ---------- ----------
EBITDA $m 526 481 9.4% 11.3%
----------------------------- ------------- ------- ------- ---------- ----------
(119)
EBITDA Margin % 46.3% 47.2% (93) bps bps
----------------------------- ------------- ------- ------- ---------- ----------
Depreciation & Amortization $m (182) (171) 6.7% 9.6%
----------------------------- ------------- ------- ------- ---------- ----------
Operating Exceptional
Items $m - - 0.0% 0.0%
----------------------------- ------------- ------- ------- ---------- ----------
Operating Profit $m 344 310 10.9% 12.3%
----------------------------- ------------- ------- ------- ---------- ----------
Capex $m 127 100 27.0% 27.0%
----------------------------- ------------- ------- ------- ---------- ----------
Operating Free Cash
Flow $m 399 381 4.7% 7.2%
----------------------------- ------- ------- ---------- ----------
Operating KPIs
----------------------------- ------------- ------- ------- ---------- ----------
Mobile voice
----------------------------- ------------- ------- ------- ---------- ----------
Customer base Mn 131.6 120.8 8.9%
----------------------------- ------------- ------- ------- ---------- ----------
Voice ARPU $ 1.6 1.6 (0.7%) 1.8%
----------------------------- ------------- ------- ------- ---------- ----------
Mobile data
----------------------------- ------------- ------- ------- ---------- ----------
Data customer base Mn 46.5 42.4 9.7%
----------------------------- ------------- ------- ------- ---------- ----------
Data ARPU $ 2.9 2.9 2.8% 5.0%
----------------------------- ------- ------- ---------- ----------
(1) Mobile service revenue after inter-segment eliminations was
$1,134m in the quarter ended 30 June 2022 and $1,016m in the prior
period.
Revenue from mobile services grew by 11.6% in reported currency,
and in constant currency grew by 14.2%. The constant currency
growth was evident in all regions and key services. Mobile services
revenue grew in Nigeria by 18.3%, in East Africa by 11.1% and in
Francophone Africa by 10.6%.
Voice revenue grew by 11.3% in constant currency, supported by
both customer base growth of 8.9% and voice ARPU growth of 1.8%.
Customer base growth was driven by the expansion of our network and
distribution infrastructure. The slowdown in voice revenue growth
this quarter was due to the barring of outgoing calls for those
customers in Nigeria who had not submitted their NINs. A total of
13.6 million customers were initially barred out of which 5.3
million (39%) have subsequently submitted their NIN and 2.3 million
(17%) have subsequently been verified and unbarred. The voice ARPU
growth of 1.8% was driven by an increase in voice usage per
customer of 6.0%, reaching 264 minutes per customer per month, with
total minutes on the network increasing by 15.9%.
Data revenue grew by 19.8% in constant currency, driven by both
customer base growth of 9.7% and data ARPU growth of 5.0%. The
customer base growth was recorded across all the regions supported
by the expansion of our 4G network. 88.4% of our total sites are
now on 4G, compared with 79.4% in the prior period. 44.1% of total
data customers are 4G users (up from 37.9%) contributing to 71.9%
of total data usage. Data usage per customer increased to 4.0 GB
per customer per month (from 3.2 GB in the prior period) while 4G
data usage per customer reached 6.6 GB per month (from 5.1 GB in
the prior period). In the quarter, data revenue contributed to
36.8% of total mobile services revenue, up from 35.0% in the prior
period. Compared to recent quarters, data revenue growth was slower
largely the result of a slowdown in the growth of data usage per
customer as well as higher churn due to NIN-related call barring in
Nigeria and lower ARPU growth in certain markets.
EBITDA was $526m, growing by 11.3% in constant currency. The
EBITDA margin declined by 93 basis points to 46.3% (declined by 119
basis points in constant currency). The reduction in EBITDA margin
was due to an increase in operating cost.
Operating free cash flow was $399m, up by 7.2%, due to the
expansion of EBITDA partially offset by higher capex.
Mobile money
Description Unit Quarter ended
of measure
----------------------------- ------------- ----------------------------------------
Jun-22 Jun-21 Reported Constant
currency currency
change change
----------------------------- ------------- ------- ------- ---------- ----------
Summarised statement
of operations
----------------------------- ------------- ------- ------- ---------- ----------
Revenue (1) $m 159 124 28.6% 26.5%
----------------------------- ------------- ------- ------- ---------- ----------
Nigeria (2) $m 0 0 - -
----------------------------- ------------- ------- ------- ---------- ----------
East Africa $m 121 91 32.8% 26.9%
----------------------------- ------------- ------- ------- ---------- ----------
Francophone Africa $m 38 33 16.9% 25.4%
----------------------------- ------------- ------- ------- ---------- ----------
EBITDA $m 79 60 30.5% 28.3%
----------------------------- ------------- ------- ------- ---------- ----------
EBITDA Margin % 49.5% 48.8% 70 bps 67 bps
----------------------------- ------------- ------- ------- ---------- ----------
Depreciation & Amortization $m (4) (3) 27.7% 28.5%
----------------------------- ------------- ------- ------- ---------- ----------
Operating Profit $m 75 57 30.9% 28.3%
----------------------------- ------------- ------- ------- ---------- ----------
Capex $m 9 3 173.3% 173.3%
----------------------------- ------------- ------- ------- ---------- ----------
Operating Free Cash
Flow $m 70 57 22.0% 20.1%
----------------------------- ------- ------- ---------- ----------
Operating KPIs
----------------------------- ------------- ------- ------- ---------- ----------
Transaction value $m 18,886 14,651 28.9% 26.1%
----------------------------- ------------- ------- ------- ---------- ----------
Active customers Mn 27.6 23.1 19.7%
----------------------------- ------------- ------- ------- ---------- ----------
Mobile money ARPU $ 2.0 1.8 7.7% 5.9%
----------------------------- ------- ------- ---------- ----------
(1) Mobile money service revenue post inter-segment eliminations
with mobile services was $123m in the quarter ended 30 June 2022
and $96m in the prior period.
(2) On 19 May 2022, we announced that Smartcash had commenced
operations in Nigeria. Services were initially made available at
selected retail touchpoints, and operations are now being expanded
gradually across the country.
Mobile money revenue grew by 28.6% in reported currency, with
constant currency growth of 26.5%. The reported currency growth was
higher than constant currency due to appreciation in the Zambian
kwacha. The slowdown in mobile money revenue growth since July 2021
has been largely due to the implementation of levies by the
Government of Tanzania on mobile money withdrawal and P2P
transactions (subsequently revised on several occasions). Excluding
Tanzania, mobile money revenue grew by 34.2%. The constant currency
mobile money revenue growth was driven by revenue growth in both
East Africa and Francophone Africa, of 26.9% and 25.4%
respectively. In Nigeria, mobile money services (Smartcash)
launched in June 2022.
The constant currency revenue growth of 26.5% was driven by both
customer base growth of 19.7% and mobile money ARPU growth of 5.9%,
with the growth largely coming from Zambia, Uganda, Malawi and DRC.
The expansion of our distribution network, particularly our
exclusive channels of Airtel Money branches and kiosks, supported
customer base growth of 19.7% in both East Africa and Francophone
Africa. The mobile money ARPU growth of 5.9% was driven by an
increase in the transaction value per customer of 5.6% to $234 per
customer per month.
Q1'23 annualised transaction value reached $75.7bn in constant
currency, with mobile money revenue contributing 12.7% of total
Group revenue in the quarter.
The mobile money customer base increased to 27.6 million, up by
19.7%. Mobile money customer base penetration reached 21.0%, an
increase of 1.9 percentage points. Mobile money ARPU growth of 5.9%
was largely driven by an increase in transaction values and higher
contributions from cash transactions, merchant payments and mobile
service recharges through Airtel Money.
EBITDA was $79m, up by 28.3% in constant currency. The EBITDA
margin reached 49.5%, an improvement of 67 basis points in constant
currency.
Regional Performance
Nigeria
Description Unit Quarter ended
of measure
----------------------- ------------- ----------------------------------------
Jun-22 Jun-21 Reported Constant
currency currency
change change
----------------------- ------------- ------- ------- ---------- ----------
Revenue $m 517 445 16.2% 18.3%
----------------------- ------------- ------- ------- ---------- ----------
Voice Revenue $m 259 238 8.8% 10.8%
----------------------- ------------- ------- ------- ---------- ----------
Data Revenue $m 210 171 22.6% 24.8%
----------------------- ------------- ------- ------- ---------- ----------
Mobile Money Revenue $m 0 0 - -
----------------------- ------------- ------- ------- ---------- ----------
Other Revenue $m 48 36 34.5% 37.0%
----------------------- ------------- ------- ------- ---------- ----------
EBITDA $m 263 246 6.9% 8.9%
----------------------- ------------- ------- ------- ---------- ----------
(441)
EBITDA Margin % 50.8% 55.2% (441) bps bps
----------------------- ------------- ------- ------- ---------- ----------
Operating KPIs
----------------------- ------------- ------- ------- ---------- ----------
ARPU $ 3.8 3.6 4.9% 6.8%
----------------------- ------- ------- ---------- ----------
East Africa
Description Unit Quarter ended
of measure
----------------------- ------------- ----------------------------------------
Jun-22 Jun-21 Reported Constant
currency currency
change change
----------------------- ------------- ------- ------- ---------- ----------
Revenue $m 455 394 15.3% 14.1%
----------------------- ------------- ------- ------- ---------- ----------
Voice Revenue $m 203 178 14.2% 14.1%
----------------------- ------------- ------- ------- ---------- ----------
Data Revenue $m 123 105 16.6% 15.9%
----------------------- ------------- ------- ------- ---------- ----------
Mobile Money Revenue $m 121 91 32.8% 26.9%
----------------------- ------------- ------- ------- ---------- ----------
Other Revenue $m 32 38 (16.2%) (15.2%)
----------------------- ------------- ------- ------- ---------- ----------
EBITDA $m 221 184 19.9% 17.9%
----------------------- ------------- ------- ------- ---------- ----------
157
EBITDA Margin % 48.5% 46.6% 187 bps bps
----------------------- ------------- ------- ------- ---------- ----------
Operating KPIs
----------------------- ------------- ------- ------- ---------- ----------
ARPU $ 2.6 2.4 8.0% 6.8%
----------------------- ------- ------- ---------- ----------
Francophone Africa
Description Unit Quarter ended
of measure
----------------------- ------------- ----------------------------------------
Jun-22 Jun-21 Reported Constant
currency currency
change change
----------------------- ------------- ------- ------- ---------- ----------
Revenue $m 288 276 4.6% 11.7%
----------------------- ------------- ------- ------- ---------- ----------
Voice Revenue $m 148 146 1.4% 8.8%
----------------------- ------------- ------- ------- ---------- ----------
Data Revenue $m 85 80 6.8% 14.3%
----------------------- ------------- ------- ------- ---------- ----------
Mobile Money Revenue $m 38 33 16.9% 25.4%
----------------------- ------------- ------- ------- ---------- ----------
Other Revenue $m 28 26 4.6% 9.2%
----------------------- ------------- ------- ------- ---------- ----------
EBITDA $m 122 111 10.0% 16.5%
----------------------- ------------- ------- ------- ---------- ----------
172
EBITDA Margin % 42.4% 40.3% 210 bps bps
----------------------- ------------- ------- ------- ---------- ----------
Operating KPIs
----------------------- ------------- ------- ------- ---------- ----------
ARPU $ 3.6 3.9 (7.3%) (0.9%)
----------------------- ------- ------- ---------- ----------
Consolidated performance
Description UoM Quarter ended- June 2022 Quarter ended- June 2021
-------------- ----- ------------------------------------------------------- -------------------------------------------------------
Mobile Mobile Unallocated Eliminations Total Mobile Mobile Unallocated Eliminations Total
services money services money
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Revenue $m 1,135 159 (0) (37) 1,257 1,018 124 (0) (30) 1,112
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Voice
revenue $m 610 (0) (0) 610 562 (0) (0) 562
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Data revenue $m 418 - - 418 356 - (0) 356
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Other
revenue $m 107 - (1) 106 99 - (1) 98
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
EBITDA $m 526 79 9 0 614 481 60 (7) (0) 534
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
EBITDA
margin % 46.3% 49.5% 48.8% 47.2% 48.8% 48.0%
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Depreciation
and
amortization $m (182) (4) (3) - (189) (171) (3) (8) - (182)
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Operating $m - - - - - - - -
exceptional
items
-------------- ----- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Operating
profit $m 344 75 6 0 425 310 57 (15) (0) 352
-------------- --------- ------- ------------ ------------- ------ --------- ------- ------------ ------------- ------
Forward looking statements
This document contains certain forward-looking statements
regarding our intentions, beliefs or current expectations
concerning, amongst other things, our results of operations,
financial condition, liquidity, prospects, growth, strategies and
the economic and business circumstances occurring from time to time
in the countries and markets in which the Group operates.
These statements are often, but not always, made through the use
of words or phrases such as "believe," "anticipate," "could,"
"may," "would," "should," "intend," "plan," "potential," "predict,"
"will," "expect," "estimate," "project," "positioned," "strategy,"
"outlook", "target" and similar expressions.
It is believed that the expectations reflected in this document
are reasonable, but they may be affected by a wide range of
variables that could cause actual results to differ materially from
those currently anticipated.
All such forward-looking statements involve estimates and
assumptions that are subject to risks, uncertainties and other
factors that could cause actual future financial condition,
performance and results to differ materially from the plans, goals,
expectations and results expressed in the forward-looking
statements and other financial and/or statistical data within this
communication.
Among the key factors that could cause actual results to differ
materially from those projected in the forward-looking statements
are uncertainties related to the following: the impact of
competition from illicit trade; the impact of adverse domestic or
international legislation and regulation; changes in domestic or
international tax laws and rates; adverse litigation and dispute
outcomes and the effect of such outcomes on Airtel Africa's
financial condition; changes or differences in domestic or
international economic or political conditions; the ability to
obtain price increases and the impact of price increases on
consumer affordability thresholds; adverse decisions by domestic or
international regulatory bodies; the impact of market size
reduction and consumer down-trading; translational and
transactional foreign exchange rate exposure; the impact of serious
injury, illness or death in the workplace; the ability to maintain
credit ratings; the ability to develop, produce or market new
alternative products and to do so profitably; the ability to
effectively implement strategic initiatives and actions taken to
increase sales growth; the ability to enhance cash generation and
pay dividends and changes in the market position, businesses,
financial condition, results of operations or prospects of Airtel
Africa.
Past performance is no guide to future performance and persons
needing advice should consult an independent financial adviser. The
forward-looking statements contained in this document reflect the
knowledge and information available to Airtel Africa at the date of
preparation of this document and Airtel Africa undertakes no
obligation to update or revise these forward-looking statements,
whether as a result of new information, future events or otherwise.
Readers are cautioned not to place undue reliance on such
forward-looking statements.
No statement in this communication is intended to be, nor should
be construed as, a profit forecast or a profit estimate and no
statement in this communication should be interpreted to mean that
earnings per share of Airtel Africa plc for the current or any
future financial periods would necessarily match, exceed or be
lower than the historical published earnings per share of Airtel
Africa plc.
Financial data included in this document are presented in US
dollars rounded to the nearest million. Therefore, discrepancies in
the tables between totals and the sums of the amounts listed may
occur due to such rounding. The percentages included in the tables
throughout the document are based on numbers calculated to the
nearest $1,000 and therefore minor rounding differences may result
in the tables. Growth metrics are provided on a constant currency
basis unless otherwise stated. The Group has presented certain
financial information on a constant currency basis. This is
calculated by translating the results for the current financial
year and prior financial year at a fixed 'constant currency'
exchange rate, which is done to measure the organic performance of
the Group. Growth rates for our reporting regions and service
segments are provided in constant currency as this better
represents the performance of the business.
Alternative performance measures (APMs)
Introduction
In the reporting of financial information, the directors have
adopted various APMs. These measures are not defined by
International Financial Reporting Standards (IFRS) and therefore
may not be directly comparable with other companies APMs, including
those in the Group's industry.
APMs should be considered in addition to, and are not intended
to be a substitute for, or superior to, IFRS measurements.
Purpose
The directors believe that these APMs assist in providing
additional useful information on the 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
IFRS measure
--------------------------
EBITDA and Operating The Group defines EBITDA
margin profit * Depreciation and amortisation as operating
profit/(loss) for the
period before
* Exceptional items depreciation and
amortisation and adjusted
for exceptional items.
The Group defines EBITDA
margin as EBITDA divided
by revenue.
EBITDA and margin are
measures used by the
directors to assess the
trading performance of
the business and are
therefore the measure of
segment profit that the
Group presents under
IFRS. EBITDA and margin
are also presented on a
consolidated basis
because the directors
believe
it is important to
consider profitability on
a basis consistent with
that of the Group's
operating
segments. When presented
on a consolidated basis,
EBITDA and margin are
APMs.
Depreciation and
amortisation is a
non-cash item which
fluctuates depending on
the timing
of capital investment and
useful economic life.
Directors believe that a
measure which removes
this volatility improves
comparability of the
Group's results period on
period and hence is
adjusted to arrive at
EBITDA and margin.
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
EBITDA and margin.
-------------- -------------- ------------------------------------------------------------ --------------------------
Underlying Profit / The Group defines
profit / (loss) before * Exceptional items underlying profit/(loss)
(loss) before tax before tax as
tax profit/(loss) before tax
adjusted
for exceptional items.
The directors view
underlying profit/(loss)
before tax to be a
meaningful measure to
analyse
the Group's
profitability.
Exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison of the Group's
performance on a
period-to-period
basis and could distort
the understanding of our
performance for the
period and the
comparability
between periods and hence
are adjusted to arrive at
underlying profit/(loss)
before tax.
-------------- -------------- ------------------------------------------------------------ --------------------------
Effective tax Reported tax The Group defines
rate rate * Exceptional items effective tax rate as
reported tax rate
(reported tax charge
* Foreign exchange rate movements divided by
reported profit before
tax) adjusted for
* One-off tax impact of prior period, tax litigation exceptional items,
settlement and impact of tax on permanent differences foreign exchange rate
movements
and one-off tax items of
prior period adjustment,
tax settlements and
impact of permanent
differences on tax.
This provides an
indication of the current
on-going tax rate across
the Group.
Exceptional tax items or
any tax arising on
exceptional items are
additional specific items
that because of their
size, nature or incidence
in the results, are
considered to hinder
comparison
of the Group's
performance on a
period-to-period basis
and could distort the
understanding
of our performance for
the period and the
comparability between
periods and hence are
adjusted
to arrive at effective
tax rate.
Foreign exchange rate
movements are specific
items that are non-tax
deductible in a few of
the entities which are
loss making and 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
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
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 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 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 EBITDA
for the preceding 12
months.
The directors view net
debt and the leverage
ratio to be meaningful
measures to monitor the
Group's ability to cover
its debt through its
earnings.
-------------- -------------- ------------------------------------------------------------ --------------------------
Return on No direct The Group defines return
capital equivalent * Exceptional items to arrive at EBIT on capital employed
employed ('ROCE') as EBIT divided
by average capital
employed.
The directors view ROCE
as a financial ratio that
measures the Group's
profitability and the
efficiency with which its
capital is being
utilised.
The Group defines EBIT as
operating profit/(loss)
for the period 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
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
EBIT for the preceding 12
months
by the average capital
employed (being the
average of the capital
employed averages for the
preceding four quarters).
-------------- -------------- ------------------------------------------------------------ --------------------------
Some of the Group's IFRS measures and APMs are translated at
constant currency exchange rates to measure the organic performance
of the Group. In determining the percentage change in constant
currency terms, both current and previous financial reporting
period's results have been converted using exchange rates
prevailing as on 31 March 2022. 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
-- Underlying revenue: The underlying revenue has not been
defined as an APM due to the absence of any exceptional items
during the period.
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 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 EBITDA for the preceding 12
months.
---------------------------------------------------------- ----------------------------------------------------------
Minutes of usage Minutes of usage refer to the duration in minutes for
which customers use the Group's network
for making and receiving voice calls. It includes all
incoming and outgoing call minutes,
including roaming calls.
---------------------------------------------------------- ----------------------------------------------------------
Mobile services Mobile services are our core telecom services, mainly
voice and data services, but also including
revenue from tower operation services provided by the
Group and excluding mobile money services.
---------------------------------------------------------- ----------------------------------------------------------
Net debt An alternative performance measure (non-GAAP). The Group
defines net debt as borrowings including
lease liabilities less cash and cash equivalents, term
deposits with banks, processing costs
related to borrowings and fair value hedge adjustments.
---------------------------------------------------------- ----------------------------------------------------------
Net debt to EBITDA (LTM) An alternative performance measure (non-GAAP) Calculated
by dividing net debt as at the end
of the relevant period by EBITDA for the preceding 12
months (from the end of the relevant
period). This is also referred to as the leverage ratio.
---------------------------------------------------------- ----------------------------------------------------------
Network towers or 'sites' Physical network infrastructure comprising a base
transmission system (BTS) which holds the
radio transceivers (TRXs) that define a cell and
coordinates the radio link protocols with
the mobile device. It includes all ground-based, roof top
and in-building solutions.
---------------------------------------------------------- ----------------------------------------------------------
Operating company (OpCo) Operating company (or OpCo) is a defined corporate
business unit, providing telecoms services
and mobile money services in the Group's footprint.
---------------------------------------------------------- ----------------------------------------------------------
Operating free cash flow An alternative performance measure (non-GAAP). Calculated
by subtracting capital expenditure
from EBITDA.
---------------------------------------------------------- ----------------------------------------------------------
Operating leverage An alternative performance measure (non-GAAP). Operating
leverage is a measure of the operating
efficiency of the business. It is calculated by dividing
operating expenditure (excluding
regulatory charges) by total revenue.
---------------------------------------------------------- ----------------------------------------------------------
Operating profit Operating profit is a GAAP measure of profitability.
Calculated as revenue less operating
expenditure (including depreciation and amortisation and
operating exceptional items).
---------------------------------------------------------- ----------------------------------------------------------
Other revenue Other revenue includes revenues from messaging, value
added services (VAS), enterprise, site
sharing and handset sale revenue.
---------------------------------------------------------- ----------------------------------------------------------
Reported currency Our reported currency is US dollars. Accordingly, actual
periodic exchange rates are used
to translate the local currency financial statements of
OpCos into US dollars. Under reported
currency the assets and liabilities are translated into
US dollars at the exchange rates prevailing
at the reporting date whereas the statements of profit
and loss are translated into US dollars
at monthly average exchange rates.
---------------------------------------------------------- ----------------------------------------------------------
Smartphone A smartphone is defined as a mobile phone with an
interactive touch screen that allows the
user to access the internet and additional data
applications, providing additional functionality
to that of a basic feature phone which is used only for
making voice calls and sending and
receiving text messages.
---------------------------------------------------------- ----------------------------------------------------------
Smartphone penetration Calculated by dividing the number of smartphone devices
in use by the total number of customers.
---------------------------------------------------------- ----------------------------------------------------------
Total MBs on network Total MBs consumed (uploaded & downloaded) by customers
on the Group's GPRS, 3G and 4G network
during the relevant period.
---------------------------------------------------------- ----------------------------------------------------------
EBIT Defined as operating profit/(loss) for the period
adjusted for exceptional items.
---------------------------------------------------------- ----------------------------------------------------------
EBITDA An alternative performance measure (non-GAAP). Defined as
operating profit before depreciation,
amortisation and exceptional items.
---------------------------------------------------------- ----------------------------------------------------------
EBITDA margin An alternative performance measure (non-GAAP). Calculated
by dividing EBITDA for the relevant
period by revenue for the relevant period.
---------------------------------------------------------- ----------------------------------------------------------
Revenue An alternative performance measure (non-GAAP). Defined as
revenue before exceptional items.
---------------------------------------------------------- ----------------------------------------------------------
Unstructured Supplementary Service Data Unstructured Supplementary Service Data (USSD), also
known as "quick codes" or "feature codes",
is a communications protocol for GSM mobile operators,
similar to SMS messaging. It has a
variety of uses such as WAP browsing, prepaid callback
services, mobile-money services, location-based
content services, menu-based information services, and
for configuring phones on the network.
---------------------------------------------------------- ----------------------------------------------------------
Voice minutes of usage per customer per month Calculated by dividing the total number of voice minutes
of usage on the Group's network during
the relevant period by the average number of customers
and dividing the result by the number
of months in the relevant period.
---------------------------------------------------------- ----------------------------------------------------------
Weighted average number of shares The weighted average number of shares is calculated by
multiplying the number of outstanding
shares by the portion of the reporting period those
shares covered, doing this for each portion
and then summing the total.
---------------------------------------------------------- ----------------------------------------------------------
Abbreviations
2G Second-generation mobile technology
--------------- ------------------------------------------------
3G Third-generation mobile technology
--------------- ------------------------------------------------
4G Fourth-generation mobile technology
--------------- ------------------------------------------------
ARPU Average revenue per user
--------------- ------------------------------------------------
bn Billion
--------------- ------------------------------------------------
bps Basis points
--------------- ------------------------------------------------
CAGR Compound annual growth rate
--------------- ------------------------------------------------
Capex Capital expenditure
--------------- ------------------------------------------------
CSR Corporate social responsibility
--------------- ------------------------------------------------
DTA Deferred Tax Asset
--------------- ------------------------------------------------
EBIT Earnings before interest and tax
--------------- ------------------------------------------------
EBITDA Earnings before interest, tax, depreciation and
amortisation
--------------- ------------------------------------------------
EPS Earnings per share
--------------- ------------------------------------------------
FPPP Financial position and prospects procedures
--------------- ------------------------------------------------
GAAP Generally accepted accounting principles
--------------- ------------------------------------------------
GB Gigabyte
--------------- ------------------------------------------------
HoldCo Holding company
--------------- ------------------------------------------------
IAS International accounting standards
--------------- ------------------------------------------------
ICT Information and communication technologies
--------------- ------------------------------------------------
ICT (Hub) Information communication technology (Hub) IFRS
--------------- ------------------------------------------------
IFRS International financial reporting standards
--------------- ------------------------------------------------
IMF International monetary fund
--------------- ------------------------------------------------
IPO Initial public offering
--------------- ------------------------------------------------
KPIs Key performance indicators
--------------- ------------------------------------------------
KYC Know your customer
--------------- ------------------------------------------------
LTE Long-term evolution (4G technology)
--------------- ------------------------------------------------
LTM Last 12 months
--------------- ------------------------------------------------
m Million
--------------- ------------------------------------------------
MB Megabyte
--------------- ------------------------------------------------
MI Minority interest (non-controlling interest)
--------------- ------------------------------------------------
NGO Non-governmental organisation
--------------- ------------------------------------------------
OpCo Operating company
--------------- ------------------------------------------------
P2P Person to person
--------------- ------------------------------------------------
PAYG Pay-as-you-go
--------------- ------------------------------------------------
QoS Quality of service
--------------- ------------------------------------------------
RAN Radio access network
--------------- ------------------------------------------------
SIM Subscriber identification module
--------------- ------------------------------------------------
Single RAN Single radio access network
--------------- ------------------------------------------------
SMS Short messaging service
--------------- ------------------------------------------------
TB Terabyte
--------------- ------------------------------------------------
Telecoms Telecommunications
--------------- ------------------------------------------------
Unit of measure Unit of measure
--------------- ------------------------------------------------
USSD Unstructured supplementary service data
--------------- ------------------------------------------------
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 and
macro-economic conditions such as supply chain disruptions and
inflationary pressures 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.
[1] Alternative performance measures (APM) are described on page
15.
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END
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