WorldStage Newsonline– Airtel Africa, 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 has released its results for half year ended 30 September 2023 with a strong operating performance despite foreign exchange headwinds in many of its markets, specifically in Nigeria.
Highlights of the result include;
- Total customer base grew by 9.7% to 147.7 million, as the penetration of mobile data and mobile money servicescontinued to rise, driving a 23.0% increase in data customers to 59.8 million and a 23.1% increase in mobile moneycustomers to 36.5 million.
- Constant currency ARPU growth of 9.8% was driven by increased usage acrossvoice, data and mobile money.
- Mobile money transaction value increased by 45.3% in constant currency, with Q2’24 annualised transaction value of$116bn in reported currency.
- Revenue in constant currency grew by 19.7%, with reported currency revenues up by 2.3% to $2,623m. In Q2’24,reported currency revenues declined by 4.7%reflecting a full quarter’s impact of the Nigerian naira devaluation in June 2023. Q2’24 constant currency revenues increased by 19.0%.
- Whilst reported currency revenue growth was impacted by currency devaluation, all segments delivered double-digitconstant currency revenue growth. Across the Group mobile services revenue grew by 18.3% in constant currency,driven by voice revenue growth of 11.5% and data revenue growth of 28.1%. Mobile money revenue grew by 30.9% in constant currency.
- EBITDA increased by 21.2% in constant currency, and 3.7% in reported currency to $1,302m, with an EBITDA marginof 49.6%, reflecting a 70bps margin improvement over the prior period despite inflationary cost pressures and foreignexchange headwinds. Reported currency EBITDA declined by 3.3% in Q2’24 as the full impact of the Nigerian naira devaluation in June 2023 was incorporated.
- Loss after tax was $13m driven largely by a foreign exchange loss of $471mrecorded in finance cost before tax and $317m after tax because of the devaluation of the Nigerian naira in June 2023. This impact has been classified as an exceptional item.
- EPS before exceptional items was 7.0 cents, an improvement of 3.2%. EPS before exceptional items and excludingforeign exchange and derivative losses was 10.7 cents. Basic EPS at negative (1.5 cents) compared to 7.9 cents in theprior period, was impacted by $317m net exceptional loss on account of naira devaluation in June 2023.
- Capex of $312m was marginally higher compared to the prior period. Capex guidance for the full year remainsbetween $800m and $825m as we continue to invest for future growth.
- The remaining debt at HoldCo is $550m, falling due in May 2024. Cash at the HoldCo was $495m at the end of theperiod and the Group is well positioned to fully repay the HoldCo debt when due. Leverage of 1.3x in September 2023,was broadly stable despite the foreign exchange impact on EBITDA as a result of the Nigerian naira devaluation in June 2023.
- The Board has declared an interim dividend of 2.38 cents per share, an increase of 9%, in-line with our progressivedividend policy.
- Our landmark five-year $57m partnership with UNICEF was launched across nine of the 13 of our markets providingaccess to educational resources, free of charge, on our way to reaching one million children through our programmesby 2027.
- Net zero journey continues with implementation of Scope 1 and 2 emissions reductions and development of a robustScope 3 strategy, including stakeholder engagement.
Olusegun Ogunsanya, Group chief executive officer while commenting on the result said, “I am pleased to report a strong operating performance for the Group despite foreign exchange headwinds in many of our markets and specifically in Nigeria. The resilient growth in voice, data and mobile money usage levels reflects the inherent
demand for these essential services across our footprint, and our six-pillar ‘win-with’ strategy continues to ensure we capture this growth opportunity by expanding our customer base and providing the platform to enable increased usage across the network. This strong momentum is supported by continued cost efficiencies which enabled further EBITDA margin expansion.
“As reported in July 2023, our results for the first quarter were significantly impacted by the changes to the FX market in Nigeria, introduced by the Central Bank. Whilst the changes are required for the long-term benefit of the Nigerian economy, the immediate impact of the naira devaluation continues to weigh on our reported financial performance in the period.
“Our focus remains to enhance long term value by continuing to drive sustained and efficient growth. Over the last five years we have delivered constant currency revenue and EBITDA CAGR of 17.1% and 20.7% respectively, allowing us to further derisk the balance sheet and improve profitability across the Group.
“Looking forward, the delivery of affordable and reliable telecom and mobile money services across our markets remains our key focus. Our strong operating performance continues to make us a stronger and bigger company, which is well positioned to deliver against the growth opportunities these markets offer. Despite the challenges of rising diesel prices in Nigeria, we aim to limit the impact with continued operational leverage and further cost efficiencies to deliver an improved EBITDA margin in FY’24 versus FY’23.”
