TIDMAAF
RNS Number : 8311G
Airtel Africa PLC
29 July 2021
Airtel Africa plc
Results for quarter ended 30 June 2021
29 July 2021
A strong financial and operational performance, with further
improvement in revenue growth trends
Highlights
-- Q1'22 Reported revenue grew by 30.7% to $1,112m, with
constant currency growth of 33.1%. Revenue growth partially
benefitted from a weakened quarter in the prior year during the
peak of Covid-19 restrictions across the region. Even after
adjusting for these effects, r evenue growth rates for the Group,
service segments and reporting regions were all ahead of Q4'21
trends.
-- Strong revenue growth was recorded across all regions:
Nigeria up 38.2%, East Africa up 32.8% and Francophone Africa up
24.9%; and across key services, with revenues for voice up 26.0%,
data up 37.4% and mobile money up 53.7%.
-- Underlying EBITDA grew by 42.4% to $534m in reported
currency, while constant currency growth was 46.2%.
-- Underlying EBITDA margin was 48.0%, an increase of 396 basis
points (increase of 428 basis points in constant currency) led by
both revenue growth and improved operational efficiencies.
-- Operating profit was $352m, up 67.6% in reported currency and 73.9% in constant currency.
-- Profit after tax more than doubled to $142m, up 148.7%,
largely due to the higher operating profits along with stable net
finance costs which more than offset the increase in tax charges
due to increased profits.
-- Basic EPS was 3.3 cents, an increase of 200%, as a result of
higher profit and stable finance costs and foreign exchange. EPS
before exceptional items was 3.2 cents.
-- Operating free cash flow (underlying EBITDA less capex) was $428m, up 38.7%.
-- Customer base grew by 8.4% to 120.8 million, with increased
penetration across mobile data (customer base up 14.8%) and mobile
money services (customer base up 24.6%). The slowdown in customer
base growth was due to new SIM registration regulations in Nigeria;
excluding Nigeria the customer base grew by 15.9%.
Alternative performance measures (1) GAAP measures
(Quarter ended) (Quarter ended)
-------------------------------------------------------------------- ----------------------------------------------
Description June-21 June-20 Reported Constant Description June-21 June-20 Reported
currency currency currency
------------------------ --------------
$m $m change change $m $m change
% % %
------------------------ -------- -------- ---------- ---------- -------------- -------- -------- ----------
Revenue 1,112 851 30.7% 33.1% Revenue 1,112 851 30.7%
------------------------ -------- -------- ---------- ---------- -------------- -------- -------- ----------
Operating
Underlying EBITDA 534 375 42.4% 46.2% profit 352 210 67.6%
------------------------ -------- -------- ---------- ---------- -------------- -------- -------- ----------
Underlying EBITDA 396 428 Profit before
margin 48.0% 44.1% bps bps tax 259 111 132.4%
------------------------ -------- -------- ---------- ---------- -------------- -------- -------- ----------
EPS before exceptional Profit after
items (cents) 3.2 1.0 216.1% tax 142 57 148.7%
------------------------ -------- -------- ---------- ---------- -------------- -------- -------- ----------
Operating free Basic EPS
cash flow 428 309 38.7% (cents) 3.3 1.1 200.0%
------------------------ -------- -------- ---------- ---------- -------------- -------- -------- ----------
( (1) Alternative performance measures (APM) are described on page 14.
Raghunath Mandava, chief executive officer, on the trading
update:
"Our Q1'22 results have been very strong, with reported growth
of 30.7% in revenue and 42.4% in underlying EBITDA, with constant
currency growth of 33.1% and 46.2% respectively. Q1 of last year
was impacted by the start of Covid, but even after adjusting for
these effects, our Q1'22 revenue growth rates for the Group,
service segments and reporting regions were all ahead of Q4'21
trends.
We have posted strong double-digit growth across voice (26.0%),
data (37.4%) and mobile money (53.7%), and across all our
regions.
Sub-Saharan Africa is now experiencing a third wave of the
pandemic. Governments are implementing balanced measures of
lockdowns and restrictions. But vaccinations levels remain very
low. In these challenging times our business model has so far
proven resilient, but we continue to monitor the situation closely
for the potential impact on local economies and consumers.
Our total customer base has returned to growth with acceleration
in our East Africa and Francophone regions and despite continuing
negative net additions in Nigeria. With the easing of these
restrictions in late April we have since been able to gradually
increase locations for activations in line with regulatory
compliance across Nigeria, and we have begun adding new
customers.
Our continued focus on modernisation and rollout of our network,
along with simplifying our products and improving our distribution,
have all helped us to make handsome gains on our ARPUs across
voice, data and mobile money. Our robust operating model and solid
execution should enable us to continue our profitable growth.
We continue to see huge potential across voice, data and mobile
money due to the low penetration levels in Africa, as we continue
to partner the nations in bridging the digital divide and enhancing
financial inclusion. We remain committed to continue to efficiently
and effectively deliver services that help to improve the lives,
communities and economies we serve."
---
Airtel Africa plc ("Airtel Africa" or "Group") results for the
quarter ended 30 June 2021 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 2021
except to the extent required/ prescribed by IAS 34. This report
should be read in conjunction with audited consolidated financial
statements and related notes for the year ended 31 March 2021. The
comparative information has been drawn based on Airtel Africa plc's
Audited Consolidated Financial Statements for the year ended 31
March 2021. Comparative quarterly information is drawn from
unaudited IAS 34 financials of 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 2020.
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
Bertie Berger
airtelafrica@hudsonsandler.com +44 207 796 4133
Conference call
The management team will host an analyst and investor conference
call at 12:00pm UK time (BST), on Thursday 29 July 2021, including
a Question and Answer session.
To receive an invitation with the dial in numbers to participate
in the conference call, please register before the event using the
following link:
https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=5445815&linkSecurityString=914c16fb6
Key financial information
Description Unit of Quarter ended
measure
------------------------------- ------------------------------------------
June-21 June-20 Reported Constant
currency currency
change change
% %
------------------------------- -------- -------- ---------- ----------
Profit and loss summary
------------------------------- ---------- -------- -------- ---------- ----------
Revenue (1) $m 1,112 851 30.7% 33.1%
------------------------------- ---------- -------- -------- ---------- ----------
Voice revenue $m 562 454 23.8% 26.0%
------------------------------- ---------- -------- -------- ---------- ----------
Data revenue $m 356 265 34.5% 37.4%
------------------------------- ---------- -------- -------- ---------- ----------
Mobile money revenue
(2) $m 124 81 52.8% 53.7%
------------------------------- ---------- -------- -------- ---------- ----------
Other revenue $m 98 78 26.6% 28.6%
------------------------------- ---------- -------- -------- ---------- ----------
Expenses $m (581) (479) 21.3% 22.9%
------------------------------- ---------- -------- -------- ---------- ----------
Underlying EBITDA (3) $m 534 375 42.4% 46.2%
------------------------------- ---------- -------- -------- ---------- ----------
Underlying EBITDA margin % 48.0% 44.1% 396 bps 428 bps
------------------------------- ---------- -------- -------- ---------- ----------
Depreciation and amortization $m (182) (161) 12.6% 13.8%
------------------------------- ---------- -------- -------- ---------- ----------
Operating exceptional
items $m - - 0.0% 0.0%
------------------------------- ---------- -------- -------- ---------- ----------
Operating profit (4) $m 352 210 67.6% 73.9%
------------------------------- ---------- -------- -------- ---------- ----------
Net finance costs $m (97) (99) (1.2%)
------------------------------- ---------- -------- -------- ---------- ----------
Non-operating exceptional
items (5) $m 4 - 0.0%
------------------------------- ---------- -------- -------- ---------- ----------
Profit before tax $m 259 111 132.4%
------------------------------- ---------- -------- -------- ---------- ----------
Tax $m (117) (61) 91.2%
------------------------------- ---------- -------- -------- ---------- ----------
Tax - exceptional items $m - 7 (100.0%)
------------------------------- ---------- -------- -------- ---------- ----------
Total tax charge $m (117) (54) 114.9%
------------------------------- ---------- -------- -------- ---------- ----------
Profit after tax (6) $m 142 57 148.7%
------------------------------- ---------- -------- -------- ---------- ----------
Non-controlling interest $m (17) (15) 11.6%
------------------------------- ---------- -------- -------- ---------- ----------
Profit attributable
to owners of the company
- before exceptional
items $m 121 38 215.8%
------------------------------- ---------- -------- -------- ---------- ----------
Profit attributable
to owners of the company $m 125 42 199.7%
------------------------------- -------- -------- ---------- ----------
EPS - before exceptional
items cents 3.2 1.0 216.1%
------------------------------- ---------- -------- -------- ---------- ----------
Basic EPS cents 3.3 1.1 200.0%
------------------------------- ---------- -------- -------- ---------- ----------
Weighted average no
of shares million 3,755 3,758 (0.1%)
------------------------------- ---------- -------- -------- ---------- ----------
Capex $m 106 66 59.9%
------------------------------- ---------- -------- -------- ---------- ----------
Operating free cash
flow $m 428 309 38.7%
------------------------------- ---------- -------- -------- ---------- ----------
Net debt $m 3,536 3,425
------------------------------- ---------- -------- -------- ---------- ----------
Leverage (net debt
to underlying EBITDA) times 1.8x 2.2x
------------------------------- ---------- -------- -------- ---------- ----------
Return on capital employed % 18.3% 13.9% 4.3%
------------------------------- -------- -------- ---------- ----------
Operating KPIs
------------------------------- ---------- -------- -------- ---------- ----------
ARPU $ 3.1 2.6 20.6% 22.9%
------------------------------- ---------- -------- -------- ---------- ----------
Total customer base million 120.8 111.5 8.4%
------------------------------- ---------- -------- -------- ---------- ----------
Data customer base million 42.4 37.0 14.8%
------------------------------- ---------- -------- -------- ---------- ----------
Mobile money customer
base million 23.1 18.5 24.6%
------------------------------- -------- -------- ---------- ----------
(1) Revenue includes intra-segment eliminations of $28m for the
quarter ended 30 June 2021 and $26m for the prior period.
(2) Mobile money revenue post intra-segment eliminations with
mobile services was $96m for the quarter ended 30 June 2021, and
$55m for the prior period.
(3) Underlying EBITDA includes other income of $3.5m for the
quarter ended 30 June 2021 and $3.3m for the prior period.
(4) Operating profit includes $3.5m CSR (Corporate Social
Responsibility) expense in the prior period.
(5) Non-operating exceptional items in the quarter ended 30 June
2021 include a gain of $4m from the profit on the sale of towers in
Rwanda.
(6) Profit after tax increase was largely due to higher
operating profit more than offsetting the increase in tax
charges.
Financial review for the quarter ended 30 June 2021
Our continued focus on execution of our strategy has helped us
to deliver another strong set of results for Q1'22. Our revenue
growth was more than 30% in reported currency, with constant
currency growth of 33.1%, with a strong performance across both our
regional segments and our key services. Revenue growth for the
quarter partially benefitted from a weakened performance in the
first quarter of the prior year during the peak period of Covid-19
related restrictions across the region. Even after adjusting for
these effects, our revenue growth rates were ahead of Q4'21 trends
for the Group, and across all service segments and reporting
regions.
Regionally, revenue in Nigeria grew by 38.2%, in East Africa by
32.8% and in Francophone Africa by 24.9%.
By service segment, mobile services revenue grew by 29.8% in
constant currency (27.4% in reported currency), with voice revenue
up 26.0%, and data revenue up 37.4%; and mobile money services
revenue grew by 53.7% (52.8% in reported currency).
Net finance costs were broadly stable. Tax charges increased by
$62m due to higher operating profit, a one-time tax charge and
withholding tax on dividends by subsidiaries, with the prior period
also benefitting from deferred tax credit recognition.
Basic EPS and EPS before exceptional items significantly
improved to 3.3 cents and 3.2 cents respectively, with higher
operating profits more than offsetting the increased tax and
broadly stable net finance cost and minority interest.
Leverage also improved year on year, to 1.8x at 30 June 2021
from 2.2x at 30 June 2020, despite investing $247m of intangible
capex renewing licences in two of our largest markets, Nigeria and
Uganda, and acquiring additional spectrum. The increase in
underlying EBITDA more than offset the increase in net debt.
GAAP measures
Revenue
Revenue grew by 30.7% to $1,112m in reported currency, driven by
constant currency growth of 33.1% partially offset by currency
devaluations, mainly in the Nigerian naira (6%) and Zambian kwacha
(24.2%), in turn partially offset by appreciation in the Central
African franc (6.6%) and Ugandan shilling (5.3%). Revenue growth
for the quarter partially benefitted from a weakened performance in
the first quarter of the prior year during the peak period of
Covid-19 related restrictions across the region.
Operating profit
Operating profit increased by 67.6% to $352m in reported
currency, due to a combination of strong revenue growth and
improvements in operating efficiency. In constant currency
operating profit grew by 73.9%.
Net finance costs
Net finance costs were broadly stable in the period. Effective
interest rate increased to 5.0% from 4.7% in the prior year largely
as a result of reduction in foreign currency debt and increase in
local currency OpCo debt, however interest charges were broadly
stable due to lower market debt and slightly higher interest
income.
Taxation
Total tax charges increased by $62m, to $117m. The $62m increase
in tax charges was due to higher operating profit, a one-time tax
case settlement charge of $9m in one of our operating markets and
higher withholding tax of $4m on dividends by subsidiaries. The
prior period also benefited from the recognition of deferred tax
credit of $7m in Tanzania.
Profit after tax
Profit after tax was $142m, a 148.7% increase on the $57m of the
prior period. This increase was largely due to higher operating
profits along with stable net finance costs, which more than offset
the increase in tax charges due to increased profits.
Basic EPS
Basic EPS was 3.3 cents, up from 1.1 cents in the prior period.
This increase was mainly due to higher operating profits which more
than offset the increased tax charges from higher profits. Net
finance cost and minority interest were broadly stable.
Alternative performance measures [1]
Revenue
Constant currency revenue growth of 33.1% was driven by the
customer base growth of 8.4% to 120.8 million, and ARPU growth of
22.9%. The slowdown in customer base growth was due to new SIM
registration regulations in Nigeria; excluding Nigeria, our
customer base grew by 15.9%. The overall ARPU growth of 22.9% was
driven by all service segments; with voice contributing 8.7%, data
8.3%, mobile money 4.0%, and the balance coming from other
revenue.
Revenue growth was recorded across all our regions. Revenue in
Nigeria grew by 38.2%, in East Africa by 32.8% and in Francophone
Africa by 24.9%.
Revenue in each of our service segments grew by more than 25%.
Revenue for voice grew by 26.0%, for data by 37.4%, and for mobile
money by 53.7% (all in constant currency).
Revenue growth for the quarter partially benefitted from a
weakened performance in the first quarter of the prior year during
the peak period of Covid-19 related restrictions across the region.
Even after adjusting for this, revenue growth rates were ahead of
Q4'21 trends for the Group, and across all reporting regions and
service segments.
Underlying EBITDA
Underlying EBITDA was $534m, an increase of 42.4% in reported
currency and 46.2% in constant currency. The growth in underlying
EBITDA was driven by revenue growth of 33.1% (in constant currency)
and improved operating efficiency. The underlying EBITDA margin was
48.0%, an improvement of 396 basis points in reported currency and
428 basis points in constant currency.
Foreign exchange had an adverse impact of $14.3m on revenue and
$8.9m on underlying EBITDA, reflecting currency devaluations,
mainly the Nigerian naira and Zambian kwacha, partially offset by
appreciation in the Central African franc and Ugandan shilling.
Tax
The effective tax rate was 39.1% compared to 49.7% in the prior
period, largely a result of profit mix changes amongst the OpCos.
The effective tax rate is higher than the weighted average
statutory corporate tax rate of approximately 33%, largely due to
the profit mix between various OpCos and higher withholding tax on
dividends by subsidiaries.
Exceptional items
An exceptional gain of $4m was recorded in the quarter ended 30
June 2021 in respect of a profit on the sale of towers in Rwanda.
The exceptional gain of $7m in the prior period related to a
deferred tax credit recognition in Tanzania.
EPS before exceptional items
EPS before exceptional items for the quarter was 3.2 cents, up
from 1.0 cent in the prior period. This increase was mainly due to
higher operating profits which more than offset the increased tax
charges from higher profits. Net finance cost and minority interest
were broadly stable.
Operating free cash flow
Operating free cash flow was $428m, up 38.7% on the prior
period, due to higher underlying EBITDA more than offsetting
increased capital expenditure. Prior period capital expenditure was
lower due to logistical challenges faced during the pandemic.
Leverage
Leverage (net debt to underlying EBITDA) improved year on year,
to 1.8x at 30 June 2021 from 2.2x at 30 June 2020, despite
investing $247m of intangible capex to renew licences in two of our
largest markets, Nigeria and Uganda, and acquiring additional
spectrum across a few of our markets. The increase in underlying
EBITDA more than offset the increase in net debt.
Other significant updates
Sale of towers in Tanzania
In June 2021, Airtel Africa signed a deal for the sale of the
tower portfolio belonging to Airtel Tanzania to a joint venture
company owned by a wholly owned subsidiary of SBA Communications
Corporation, a leading global independent owner and operator of
wireless communications infrastructure, as majority owner, and by
Paradigm Infrastructure Limited, a UK company focused on
developing, owning and operating shared passive wireless
infrastructure in selected growth markets.
The tower portfolio in Airtel Tanzania comprises approximately
1,400 towers which form part of the Group's wireless
telecommunications infrastructure network. Under the terms of the
transaction, the Group's subsidiary, Airtel Tanzania plc, will
continue to develop, maintain and operate its equipment on the
towers under a separate lease arrangement with the purchaser.
The consideration for the transaction is approximately $175m of
which approximately $157.5m is payable on the first closing date
(expected to take place in the second half of the Group's current
financial year), with the balance payable in instalments upon the
completion of the transfer of any remaining towers to the
purchaser. Around $60m from the proceeds will be used to invest in
network and sales infrastructure in Tanzania and for distribution
to the Government of Tanzania, as per the settlement described in
the Airtel Africa IPO Prospectus document published in June 2019.
The balance of the proceeds will be used to reduce debt at Group
level.
New SIM registration rules in Nigeria
As previously highlighted, 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.
Initially, new customer acquisitions were barred until
significant progress had been made on linking the active customer
base with verified NINs. Natural churn in the customer base led to
a loss of 2.0 million active mobile customers in Nigeria in the
first quarter of the year (following on from 2.5 million customer
loss in the final quarter of the year to 31 March 2021), however,
the financial impact has been minimal, with continued revenue
growth, due largely to the significantly lower ARPU of the churned
base and increased usage by the active base. In April, the NCC
announced that it would allow new customer enrolment to recommence
from certified outlets (a branch or kiosk where customers can sign
up to Airtel). Airtel Nigeria has so far received approvals for
over 2,100 outlets and new customer registrations have recommenced
in those outlets accordingly. The NCC also issued a further
directive in April with the effect that no individual customers can
register more than four SIM cards under one NIN on any network.
The original regulatory directive set an initial deadline for
customers to register their NIN with their SIM of 30 December 2020.
This was subsequently moved several times with the latest deadline
set for 31 October 2021.
We have made significant progress on capturing existing NINs and
building the database in collaboration with National Identity
Management Commission (NIMC). To date, out of Airtel Nigeria's 40.9
million active customers, we have collated NIN information for over
25.0 million active mobile customers. To complete the registration
process, we must also verify the NIN information we have received
from our subscribers with the NIMC.
For the still significant proportion of the population, and our
customers, that do not have a NIN we have opened enrolment centres
in collaboration with the NIMC and we are in the process of rolling
out thousands of devices to further NIN enrolment. We continue to
work closely with the government to ensure full compliance.
Refinancing
In April 2021, Airtel Africa agreed a new $500m loan facility
with a group of relationship banks.
The new committed facility consists of a combination of a
revolving credit facility and term loans with tenor of up to 4
years. The facility was used to partially refinance the Group's
EUR750m euro denominated bond due 20 May 2021. The balance of the
euro denominated bond was repaid with existing Group cash to reduce
gross debt and associated interest costs.
The new loan facility further strengthens the core liquidity of
the Group. It also has prepayment flexibilities that allow the
Group to optimise the efficiency of its capital structure with the
free cash flows and cash receipts anticipated over the next 12
months following the recent announcements related to tower sales
and mobile money minority investments.
New shareholding requirements in Kenya
On 9 April 2021, the Minister for ICT published an amendment to
the National Information Communications and Technology (ICT) Policy
Guidelines, 2020 (ICT Policy). The ICT Policy amendment will affect
Airtel Africa's Kenya business as follows:
-- Airtel Networks Kenya Limited, which currently holds an
indefinite exemption from the Minister for ICT, dated 20 March
2013, has three years with effect from 9 April 2021 to comply with
the requirement to have a 30% local shareholding.
-- Airtel Money Kenya Limited, which holds a Content Service
Provider Licence from the Communications Authority of Kenya, with
effect from November 2020, has three years from the date of the
licence to comply with the requirement to have a 30% local
shareholding.
Under the amended ICT policy, a licensee may apply to the ICT
Minister for an extension of time to comply with the requirement,
or to obtain an exemption.
Appointment of new CEO, and other senior executive changes
On 29 April 2021, Airtel Africa announced that Olusegun "Segun"
Ogunsanya, managing director and chief executive officer Airtel
Nigeria is to succeed Raghunath "Raghu" Mandava, as managing
director and chief executive officer following Raghu Mandava's
informing the Board of his intention to retire. Segun Ogunsanya
will join the Board of Airtel Africa plc with effect from 1 October
2021.
Segun Ogunsanya joined Airtel Africa in 2012 as managing
director and chief executive officer Airtel Nigeria and has been
responsible for the overall management of our operations in
Nigeria, our largest market in Africa. Segun has more than 25
years' business management experience in banking, consumer goods
and telecoms. Before joining Airtel in 2012, Segun held leadership
roles at Coca-Cola in Ghana, Nigeria, and Kenya (as managing
director and chief executive officer). He has also been the
managing director of Nigerian Bottling Company Ltd (Coca-Cola
Hellenic owned) and Group head of retail banking operations at
Ecobank Transnational Inc, covering 28 countries in Africa. He is
an electronics engineer and also a chartered accountant.
Raghu Mandava will be retiring as managing director and chief
executive officer, as a director of Airtel Africa plc and as a
member of the Market Disclosure Committee on 30 September 2021.
Arrangements have been made to ensure a smooth transition of
responsibilities. Following his cessation of employment at Airtel
Africa, Mr. Mandava will be available to advise the Chairman, the
Airtel Africa Board and the newly appointed managing director and
chief executive officer for a 9-month period.
Jaideep Paul, chief financial officer, was appointed as an
executive director and joined the Board of Airtel Africa plc with
effect from 1 June 2021.
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 2021
Nigeria
Description Unit of Quarter ended
measure
------------------------------- ---------- ------------------------------------------
June-21 June-20 Reported Constant
currency currency
change change
% %
------------------------------- ---------- -------- -------- ---------- ----------
Summarised statement
of operations
------------------------------- ---------- -------- -------- ---------- ----------
Revenue $m 445 341 30.5% 38.2%
------------------------------- ---------- -------- -------- ---------- ----------
Voice revenue $m 238 197 20.8% 28.0%
------------------------------- ---------- -------- -------- ---------- ----------
Data revenue $m 171 122 40.5% 48.8%
------------------------------- ---------- -------- -------- ---------- ----------
Other revenue (1) $m 36 22 61.4% 70.9%
------------------------------- ---------- -------- -------- ---------- ----------
Underlying EBITDA $m 246 182 35.3% 43.3%
------------------------------- ---------- -------- -------- ---------- ----------
Underlying EBITDA
margin % 55.2% 53.3% 195 bps 195 bps
------------------------------- ---------- -------- -------- ---------- ----------
Depreciation and amortisation $m (63) (52) 20.8% 28.0%
------------------------------- ---------- -------- -------- ---------- ----------
Exceptional item $m - - 0.0% 0.0%
------------------------------- ---------- -------- -------- ---------- ----------
Operating profit $m 183 130 41.2% 49.5%
------------------------------- ---------- -------- -------- ---------- ----------
Capex $m 49 30 60.4% 60.4%
------------------------------- ---------- -------- -------- ---------- ----------
Operating free cash
flow $m 197 152 30.0% 39.6%
------------------------------- -------- -------- ---------- ----------
Operating KPIs
------------------------------- ---------- -------- -------- ---------- ----------
ARPU $ 3.6 2.7 31.9% 39.7%
------------------------------- ---------- -------- -------- ---------- ----------
Total customer base million 40.9 42.5 (3.9%)
------------------------------- ---------- -------- -------- ---------- ----------
Data customer base million 17.8 17.3 2.5%
------------------------------- -------- -------- ---------- ----------
(1) Other revenue includes inter-segment revenue of $0.5m in the
quarter ended 30 June 2021. Excluding inter-segment revenue, other
revenue was $35m in the quarter ended 30 June 2021.
Reported currency revenue grew by 30.5%, with constant currency
revenue growth of 38.2% offset by Nigerian naira devaluation of 6%
(YoY). Revenue growth for the quarter partially benefitted from a
weakened performance in the first quarter of the prior year during
the peak period of Covid-19 related restrictions in Nigeria. Even
after adjusting for this, revenue growth rates were ahead of Q4'21
trends. Overall ARPU in Nigeria grew by 39.7%, driven by a 17%
growth contribution from voice, 18% from data and the balance from
other revenue.
Voice revenue grew by 28.0%, driven by voice ARPU growth of
29.3% from an identical increase in voice usage per customer. The
customer base decline of 1.6 million from the prior period, and 1.1
million in the quarter, was due to the implementation of the new
"Know-Your-Customer" (KYC) requirements in Nigeria which had
included a temporary halt to new customer activations. New
activations have been permitted in regulatory approved outlets
since the end of April 2021.
Data revenue grew by 48.8% in constant currency, driven by data
ARPU growth of 41.5%, supported by a 42.2% increase in data
consumption per customer (to 3.8 GB per month from 2.7 GB per
month), combined with data customer base growth of 2.5%. The
customer base growth was driven by expansion of our 4G network,
with 87.3% of total sites now on 4G, and an increase in smartphone
penetration. Data customer penetration increased by 2.7 percentage
points to 43.5% compared with previous period. Data revenue
accounted for 38.5% of total revenue in the quarter, up 2.7
percentage points from 35.7% in the prior period. The 4G data
customer base now contributes to 40.2% of the total data customer
base with a total data usage contribution of 69%, up from 57.9% in
prior period.
Other revenue grew by 70.9%, with the main contribution coming
from the growth in value added services revenue, led by airtime
credit services.
Underlying EBITDA was $246m, up by 35.3% in reported currency,
with a constant currency growth of 43.3%. Underlying EBITDA margin
was at 55.2%, an increase of 195 basis points in both reported and
constant currency. The margin expansion was due to improvements in
operational efficiency.
Capital expenditure was $49m, 60.4% higher than the prior period
due to the logistical challenges faced earlier in the pandemic.
Operating free cash flow was $197m, up 39.6%, due to expansion of
the underlying EBITDA marginally offset by higher capital
expenditure.
East Africa (1)
Description Unit of Quarter ended
measure
------------------------------- ---------- ------------------------------------------
June-21 June-20 Reported Constant
currency currency
change change
% %
------------------------------- ---------- -------- -------- ---------- ----------
Summarised statement
of operations
------------------------------- ---------- -------- -------- ---------- ----------
Revenue (2) $m 394 305 29.5% 32.8%
------------------------------- ---------- -------- -------- ---------- ----------
Voice revenue $m 178 143 24.8% 27.8%
------------------------------- ---------- -------- -------- ---------- ----------
Data revenue $m 105 86 22.6% 25.3%
------------------------------- ---------- -------- -------- ---------- ----------
Mobile money revenue
(4) $m 91 58 57.6% 62.4%
------------------------------- ---------- -------- -------- ---------- ----------
Other revenue (3) $m 38 35 8.5% 10.9%
------------------------------- ---------- -------- -------- ---------- ----------
Underlying EBITDA $m 184 129 42.5% 45.7%
------------------------------- ---------- -------- -------- ---------- ----------
Underlying EBITDA margin % 46.6% 42.4% 425 bps 414 bps
------------------------------- ---------- -------- -------- ---------- ----------
Depreciation and amortisation $m (58) (53) 8.5% 10.4%
------------------------------- ---------- -------- -------- ---------- ----------
Exceptional item $m - - 0.0% 0.0%
------------------------------- ---------- -------- -------- ---------- ----------
Operating profit (5) $m 126 74 69.7% 74.1%
------------------------------- ---------- -------- -------- ---------- ----------
Capex $m 33 19 70.6% 70.6%
------------------------------- ---------- -------- -------- ---------- ----------
Operating free cash
flow $m 151 110 37.6% 41.2%
------------------------------- -------- -------- ---------- ----------
Operating KPIs
------------------------------- ---------- -------- -------- ---------- ----------
ARPU $ 2.4 2.1 15.3% 18.2%
------------------------------- ---------- -------- -------- ---------- ----------
Total customer base million 55.4 48.8 13.6%
------------------------------- ---------- -------- -------- ---------- ----------
Data customer base million 17.3 14.0 23.2%
------------------------------- ---------- -------- -------- ---------- ----------
Mobile money customer
base million 19.2 15.5 23.9%
------------------------------- -------- -------- ---------- ----------
(1) The East Africa business region includes Kenya, Malawi,
Rwanda, Tanzania, Uganda and Zambia.
(2) Revenue includes intra-segment eliminations of $18m for the
quarter ended 30 June 2021 and $17m for the quarter ended 30 June
2020.
(3) Other revenue includes inter-segment revenue of $1.3m in the
quarter ended 30 June 2021. Excluding inter-segment revenue, other
revenue was $37m in the quarter ended 30 June 2021.
(4) Mobile money revenue post intra-segment eliminations with
mobile services was $73m for the quarter ended 30 June 2021 and
$41m for the prior period.
(5) Operating profit includes CSR (Corporate social
responsibility) expense of $1.5m in the prior period.
East Africa continued to deliver a strong set of results, with
reported currency revenue growth of 29.5%. In constant currency,
revenue growth was 32.8% with strong contributions across all
service segments; voice revenue growing by 27.8%, data revenue by
25.3% and mobile money revenue by 62.4%. Reported currency revenue
growth reflects the strong constant currency revenue growth
partially offset by currency devaluation, mainly in Zambia and
Malawi, while the Ugandan shilling appreciated. Revenue growth for
the quarter partially benefitted from a weakened performance in the
first quarter of the prior year during the peak period of Covid-19
related restrictions across the region. Even after adjusting for
this, revenue growth rates were slightly ahead of Q4'21 trends.
Voice revenue grew by 27.8%, driven by customer base growth of
13.6% and voice ARPU growth of 13.8%. The customer base growth was
driven largely by the expansion of our network coverage and
distribution network. Voice ARPU growth was driven largely by the
increase in voice usage per customer of 7.5%, to 335 minutes per
customer per month in Q1'22.
Data revenue grew by 25.3%, mainly driven by data customer base
growth of 23.2% and data ARPU growth of 2.0%. The customer base
growth was supported by the expansion of our 4G network
infrastructure, with almost 80% of sites now on 4G in East Africa,
compared with 68% during the prior period. Data ARPU growth was
driven by an increase in usage per customer of 13.2%, reaching 3.0
GB per customer per month from 2.6 GB in the prior period. The 4G
data customer base now contributes 34.5% of the total data customer
base, with a total data usage contribution of 56.8%, up from 43.4%
in previous period.
Mobile money revenue grew by 62.4%, largely driven by growth in
Tanzania, Zambia, Uganda and Malawi. Revenue growth was driven by
both customer base growth of 23.9% and ARPU growth of 34.5%, due
largely to expansion of our distribution network. Mobile money ARPU
growth was driven by the 39.3% growth in transaction value per
customer (from $131 per customer per month to $176 per customer per
month). Mobile money revenue accounted for 23.2% of total revenue
in the quarter, up 4.2 percentage points from 19.0% in the prior
period.
Underlying EBITDA margin was 46.6%, an improvement of 425 basis
points in reported currency and 414 basis points in constant
currency, led by both accelerated growth in revenue and efficiency
improvements in operating expenses.
Capital expenditure was $33m, up 70.6% on the prior period due
to planned network expansion. Operating free cash flow was $151m,
up 41.2% due to the growth in underlying EBITDA.
Francophone Africa (1)
Description Unit of Quarter ended
measure
------------------------------- ---------- ------------------------------------------
June-21 June-20 Reported Constant
currency currency
change change
% %
------------------------------- ---------- -------- -------- ---------- ----------
Summarised statement
of operations
------------------------------- ---------- -------- -------- ---------- ----------
Revenue (2) $m 276 209 31.6% 24.9%
------------------------------- ---------- -------- -------- ---------- ----------
Voice revenue $m 146 117 25.2% 18.7%
------------------------------- ---------- -------- -------- ---------- ----------
Data revenue $m 80 57 39.4% 32.1%
------------------------------- ---------- -------- -------- ---------- ----------
Mobile money revenue
(3) $m 33 23 41.3% 34.1%
------------------------------- ---------- -------- -------- ---------- ----------
Other revenue $m 26 21 22.4% 17.9%
------------------------------- ---------- -------- -------- ---------- ----------
Underlying EBITDA $m 111 74 51.0% 44.2%
------------------------------- ---------- -------- -------- ---------- ----------
Underlying EBITDA margin % 40.3% 35.1% 520 bps 541 bps
------------------------------- ---------- -------- -------- ---------- ----------
Depreciation and amortisation $m (53) (48) 9.0% 3.6%
------------------------------- ---------- -------- -------- ---------- ----------
Exceptional item $m - - 0.0% 0.0%
------------------------------- ---------- -------- -------- ---------- ----------
Operating profit (4) $m 58 25 138.4% 129.0%
------------------------------- ---------- -------- -------- ---------- ----------
Capex $m 21 16 33.3% 33.3%
------------------------------- ---------- -------- -------- ---------- ----------
Operating free cash
flow $m 90 58 56.0% 47.1%
------------------------------- -------- -------- ---------- ----------
Operating KPIs
------------------------------- ---------- -------- -------- ---------- ----------
ARPU $ 3.9 3.5 11.0% 5.4%
------------------------------- ---------- -------- -------- ---------- ----------
Total customer base million 24.5 20.2 21.5%
------------------------------- ---------- -------- -------- ---------- ----------
Data customer base million 7.4 5.6 31.6%
------------------------------- ---------- -------- -------- ---------- ----------
Mobile money customer
base million 3.9 3.0 28.4%
------------------------------- -------- -------- ---------- ----------
(1) The Francophone Africa business region includes Chad,
Democratic Republic of the Congo, Gabon, Madagascar, Niger,
Republic of the Congo, and The Seychelles.
(2) Revenue includes intra-segment eliminations of $10m for the
quarter ended 30 June 2021 and $9.6m for the quarter ended 30 June
2020.
(3 () Mobile money revenue post intra-segment eliminations with
mobile services was $23m in the quarter ended 30 June 2021 and $14m
in the quarter ended 30 June 2020.
(4) Operating profit includes CSR (Corporate Social
Responsibility) expense of $0.7m in the quarter ended 30 June
2020.
Francophone Africa has delivered another strong business
performance, with the highest reported currency revenue growth of
the regions at 31.6%. In constant currency revenue growth was
24.9%. The reported currency revenue growth is higher than in
constant currency due to appreciation of the Central African franc.
All the Francophone Africa OpCos delivered positive revenue growth.
Revenue growth for the quarter partially benefitted from a weakened
performance in the first quarter of the prior year during the peak
period of Covid-19 related restrictions across the region. Even
after adjusting for this, revenue growth rates were ahead of Q4'21
trends.
Voice revenue grew by 18.7% in constant currency mainly driven
by the customer base growth of 21.5%. Total voice minutes on the
network grew by 32.2% due to increased voice usage per customer (up
11.5%) and customer base growth.
Data revenue grew by 32.1% in constant currency, driven by
customer growth of 31.6%. Data usage per customer increased 23.2%
to 2.3 GB per customer per month, from 1.8 GB per customer per
month in the prior period. The data customer base growth was driven
largely by the expansion of our 4G network, with 60% of total sites
now on 4G, and adoption of our "more for more" bundle offerings, up
18.4%. The 4G data customer base now contributes 40% to the total
data customer base, with a total data usage contribution of 61.5%,
up from 49.2% in the prior period.
Mobile money revenue grew by 34.1%, largely driven by a 28.4%
increase in the mobile money customer base, supported by the
expansion of our distribution network through more agents and
Airtel Money branches.
Underlying EBITDA margin was 40.3% during the period, an
improvement of 520 basis points in reported currency and 541 basis
points in constant currency, driven by revenue growth and increased
efficiency in operating expenses.
Capital expenditure was $21m, higher by 33.3%. Operating free
cash flow was $90m, up 47.1%, due to the improvement in underlying
EBITDA.
Mobile services
Description Unit of Quarter ended
measure
------------------------------- ------------------------------------------
June-21 June-20 Reported Constant
currency currency
change change
% %
------------------------------- -------- -------- ---------- ----------
Summarised statement
of operations
------------------------------- ---------- -------- -------- ---------- ----------
Revenue (1) $m 1,018 799 27.4% 29.8%
------------------------------- ---------- -------- -------- ---------- ----------
Underlying EBITDA $m 481 345 39.3% 43.2%
------------------------------- ---------- -------- -------- ---------- ----------
Underlying EBITDA margin % 47.2% 43.2% 402 bps 443 bps
------------------------------- ---------- -------- -------- ---------- ----------
Depreciation and amortisation $m (171) (151) 13.0% 14.2%
------------------------------- ---------- -------- -------- ---------- ----------
Operating exceptional
items $m - - 0% 0.0%
------------------------------- ---------- -------- -------- ---------- ----------
Operating profit (2) $m 310 192 61.5% 68.4%
------------------------------- ---------- -------- -------- ---------- ----------
Capex $m 100 64 55.7% 55.7%
------------------------------- ---------- -------- -------- ---------- ----------
Operating free cash
flow $m 381 281 35.5% 40.3%
------------------------------- -------- -------- ---------- ----------
Operating KPIs
------------------------------- ---------- -------- -------- ---------- ----------
Mobile voice
------------------------------- ---------- -------- -------- ---------- ----------
Voice revenue $m 562 454 23.8% 26.0%
------------------------------- ---------- -------- -------- ---------- ----------
Customer base million 120.8 111.5 8.4%
------------------------------- ---------- -------- -------- ---------- ----------
Voice ARPU $ 1.6 1.4 14.2% 16.3%
------------------------------- ---------- -------- -------- ---------- ----------
Mobile data
------------------------------- ---------- -------- -------- ---------- ----------
Data revenue $m 356 265 34.5% 37.4%
------------------------------- ---------- -------- -------- ---------- ----------
Data customer base million 42.4 37.0 14.8%
------------------------------- ---------- -------- -------- ---------- ----------
Data ARPU $ 2.9 2.5 16.0% 18.5%
------------------------------- -------- -------- ---------- ----------
(1) Mobile service revenue after intersegment eliminations was
$1,016m in the quarter ended 30 June 2021 and $798m in the quarter
ended 30 June 2020.
(2) Operating profit includes CSR (Corporate Social
Responsibility) expense of $2.3m in prior period.
Mobile services revenue grew by 27.4% in reported currency with
constant currency growth of 29.8%, and both voice and data revenue
contributing to the growth. Revenue growth for the quarter
partially benefitted from a weakened performance in the first
quarter of the prior year during the peak period of Covid-19
related restrictions across the region. Even after adjusting for
this, revenue growth rates were ahead of Q4'21 trends.
Voice revenue increased 26.0% in constant currency, driven by
customer base growth of 8.4% and voice ARPU growth of 16.3%. The
customer base growth was driven by expansion of the distribution
network and network infrastructure. The slowdown in customer base
growth of recent quarters has been due to the new SIM registration
regulations in Nigeria. Excluding Nigeria, the rest of the customer
base grew by 15.9%. Since the end of April activations have
recommenced in regulatory approved outlets across Nigeria. Voice
ARPU growth was driven by an increase in voice usage per customer
of 14.3% to 249 minutes per customer per month, resulting in
overall minutes growth of 23.8%.
Data revenue grew by 37.4% in constant currency, largely driven
by growth in the data customer base of 14.8% and data ARPU growth
of 18.5%. The data customer base growth was driven by expansion of
our 4G network infrastructure, with 79.4% of sites now operating on
4G, compared with 66.7% in the prior period, and increased
smartphone penetration, up almost 1 percentage point. The data
customer base as a proportion of total customers reached 35.1%, an
increase of 2 percentage points. The data ARPU growth of 18.5% was
driven largely by the increase in data consumption per customer, up
26.7% to 3.2 GB per month (from 2.5 GB per month). Growing
penetration of 4G helped to drive the data ARPU growth. The 4G data
customer base now contributes 37.9% to the total data customer
base, with a total data usage contribution from 4G of 63.6%, up
from 51.2% in previous period.
Data revenue contribution reached 32.1% of total Group revenue
in the quarter, up from 31.1% in the prior period.
Mobile money
Description Unit of Quarter ended
measure
------------------------------- ------------------------------------------
June-21 June-20 Reported Constant
currency currency
change change
% %
------------------------------- -------- -------- ---------- ----------
Summarised statement
of operations
------------------------------- ---------- -------- -------- ---------- ----------
Revenue (1) $m 124 81 52.8% 53.7%
------------------------------- ---------- -------- -------- ---------- ----------
Underlying EBITDA $m 60 39 53.5% 53.3%
------------------------------- ---------- -------- -------- ---------- ----------
Underlying EBITDA margin % 48.8% 48.5% 24 bps (12) bps
------------------------------- ---------- -------- -------- ---------- ----------
Depreciation and amortisation $m (3) (3) 0.2% (1.2%)
------------------------------- ---------- -------- -------- ---------- ----------
Operating profit $m 57 36 57.9% 57.6%
------------------------------- ---------- -------- -------- ---------- ----------
Capex $m 3 2 85.4% 85.4%
------------------------------- ---------- -------- -------- ---------- ----------
Operating free cash
flow $m 57 37 52.4% 51.2%
------------------------------- -------- -------- ---------- ----------
Operating KPIs
------------------------------- ---------- -------- -------- ---------- ----------
Mobile money key KPIs
------------------------------- ---------- -------- -------- ---------- ----------
Transaction value $m 14,651 9,007 62.7% 64.4%
------------------------------- ---------- -------- -------- ---------- ----------
Active customers million 23.1 18.5 24.6%
------------------------------- ---------- -------- -------- ---------- ----------
Mobile money ARPU $ 1.8 1.5 24.7% 25.4%
------------------------------- -------- -------- ---------- ----------
(1) Mobile money service revenue post inter-segment eliminations
with mobile services was $96m in the quarter ended 30 June 2021 and
$55m in the quarter ended 30 June 2020.
Mobile money revenue grew by 52.8% to $124m in reported
currency. In constant currency mobile money revenue grew 53.7%.
Revenue growth for the quarter partially benefitted from a weakened
comparative in the first quarter of the prior year due to Covid-19
restrictions and waiver of charges on certain transactions in a few
markets to support those economies . Even after adjusting for these
effects, the revenue growth rate was ahead of the Q4'21 trend. The
Q1'22 constant currency revenue growth of 53.7% was driven by 24.6%
growth of the customer base and 25.4% growth in ARPU, led by
transaction value per customer growth of 34.2%. The customer base
growth was largely driven by expansion of our distribution network,
as we continued to invest in exclusive kiosks and mobile money
branches. The expansion of our mobile money product portfolio,
through partnerships with leading financial institutions, and the
expansion of our merchant ecosystem further strengthened our mobile
money propositions.
Underlying EBITDA for mobile money grew by 53.5% to $60m in
reported currency. In constant currency, underlying EBITDA grew by
53.3%. Underlying EBITDA margin was 48.8%, an improvement of 24
basis points in reported currency, while in constant currency the
underlying EBITDA margin dropped by 12 basis points. The total
transaction value grew by 64.4% in constant currency, driven by
customer base growth and growth in the transaction value per
customer per month of 34.2% (to $217 per month in Q1'22). The Q1'22
annualised transaction value reached $58.3bn in constant currency,
with mobile money revenue contributing 11.1% of total revenue in
the quarter.
The mobile money customer base reached 23.1 million at 30 June
2021, up 24.6% from the prior period, with 19.1% of our total
customer base now Airtel Money customers, an increase of 2.5
percentage points. Mobile money ARPU grew by 25.4%, driven by the
increase in transaction values and a higher contribution from
merchant payments, cash transactions, P2P transfers and mobile
services recharges through Airtel Money.
Forward looking statements
This document contains certain forward-looking statements
regarding our intentions, beliefs or current expectations
concerning, amongst other things, our results of operations,
financial condition, liquidity, prospects, growth, strategies and
the economic and business circumstances occurring from time to time
in the countries and markets in which the Group operates.
These statements are often, but not always, made through the use
of words or phrases such as "believe," "anticipate," "could,"
"may," "would," "should," "intend," "plan," "potential," "predict,"
"will," "expect," "estimate," "project," "positioned," "strategy,"
"outlook", "target" and similar expressions.
It is believed that the expectations reflected in this document
are reasonable, but they may be affected by a wide range of
variables that could cause actual results to differ materially from
those currently anticipated.
All such forward-looking statements involve estimates and
assumptions that are subject to risks, uncertainties and other
factors that could cause actual future financial condition,
performance and results to differ materially from the plans, goals,
expectations and results expressed in the forward-looking
statements and other financial and/or statistical data within this
communication.
Among the key factors that could cause actual results to differ
materially from those projected in the forward-looking statements
are uncertainties related to the following: the impact of
competition from illicit trade; the impact of adverse domestic or
international legislation and regulation; changes in domestic or
international tax laws and rates; adverse litigation and dispute
outcomes and the effect of such outcomes on Airtel Africa's
financial condition; changes or differences in domestic or
international economic or political conditions; the ability to
obtain price increases and the impact of price increases on
consumer affordability thresholds; adverse decisions by domestic or
international regulatory bodies; the impact of market size
reduction and consumer down-trading; translational and
transactional foreign exchange rate exposure; the impact of serious
injury, illness or death in the workplace; the ability to maintain
credit ratings; the ability to develop, produce or market new
alternative products and to do so profitably; the ability to
effectively implement strategic initiatives and actions taken to
increase sales growth; the ability to enhance cash generation and
pay dividends and changes in the market position, businesses,
financial condition, results of operations or prospects of Airtel
Africa.
Past performance is no guide to future performance and persons
needing advice should consult an independent financial adviser. The
forward-looking statements contained in this document reflect the
knowledge and information available to Airtel Africa at the date of
preparation of this document and Airtel Africa undertakes no
obligation to update or revise these forward-looking statements,
whether as a result of new information, future events or otherwise.
Readers are cautioned not to place undue reliance on such
forward-looking statements.
No statement in this communication is intended to be, nor should
be construed as, a profit forecast or a profit estimate and no
statement in this communication should be interpreted to mean that
earnings per share of Airtel Africa plc for the current or any
future financial periods would necessarily match, exceed or be
lower than the historical published earnings per share of Airtel
Africa plc.
Financial data included in this document are presented in US
dollars rounded to the nearest million. Therefore, discrepancies in
the tables between totals and the sums of the amounts listed may
occur due to such rounding. The percentages included in the tables
throughout the document are based on numbers calculated to the
nearest $1,000 and therefore minor rounding differences may result
in the tables. Growth metrics are provided on a constant currency
basis unless otherwise stated. The Group has presented certain
financial information on a constant currency basis. This is
calculated by translating the results for the current financial
year and prior financial year at a fixed 'constant currency'
exchange rate, which is done to measure the organic performance of
the Group. Growth rates for our reporting regions and service
segments are provided in constant currency as this better
represents the underlying performance of the business.
Alternative performance measures (APMs)
Introduction
In the reporting of financial information, the directors have
adopted various APMs. These measures are not defined by
International Financial Reporting Standards (IFRS) and therefore
may not be directly comparable with other companies APMs, including
those in the Group's industry.
APMs should be considered in addition to, and are not intended
to be a substitute for, or superior to, IFRS measurements.
Purpose
The directors believe that these APMs assist in providing
additional useful information on the underlying trends, performance
and position of the Group.
APMs are also used to enhance the comparability of information
between reporting periods and geographical units (such as
like-for-like sales), by adjusting for non-recurring or
uncontrollable factors which affect IFRS measures, to aid users in
understanding the Group's performance. Consequently, APMs are used
by the directors and management for performance analysis, planning,
reporting and incentive-setting purposes.
The directors believe the following metrics to be the APMs used
by the Group to help evaluate growth trends, establish budgets and
assess operational performance and efficiencies. These measures
provide an enhanced understanding of the Group's results and
related trends, therefore increasing transparency and clarity into
the core results of the business.
The following metrics are useful in evaluating the Group's
operating performance:
APM Closest Adjustment to reconcile to IFRS measure Definition and
equivalent IFRS purpose
measure
-------------------
Underlying Operating profit The Group defines
EBITDA and * Depreciation and amortisation underlying EBITDA
margin as operating
profit/ (loss) for
* Charity and donation the period before
depreciation
and amortisation,
* Exceptional items charity and
donation and
adjusted for
exceptional items.
Group defines
underlying EBITDA
margin as
underlying EBITDA
divided by total
revenue.
Underlying EBITDA
and margin are
measures used by
the directors to
assess the trading
performance
of the business
and are therefore
the measure of
segment profit
that the Group
presents under
IFRS. Underlying
EBITDA and margin
are also presented
on a consolidated
basis because the
directors believe
it is important to
consider
profitability on a
basis consistent
with that
of the Group's
operating
segments. When
presented on a
consolidated
basis, underlying
EBITDA
and margin are
APM.
Depreciation and
amortisation is a
non-cash item
which fluctuates
depending on the
timing
of capital
investment and
useful economic
life. Directors
believe that a
measure which
removes
this volatility
improves
comparability of
the Group's
results period on
period and hence
is
adjusted to arrive
at underlying
EBITDA and margin.
Charity and
donations are not
related to the
trading
performance of the
Group and hence
adjusted
to arrive at
underlying EBITDA
and margin.
Exceptional items
are additional
specific items
that because of
their size, nature
or incidence
in the results,
are considered to
hinder comparison
of the Group's
performance on a
period-to-period
basis and could
distort the
understanding of
our performance
for the period and
the comparability
between periods
and hence are
adjusted to arrive
at underlying
EBITDA and margin.
---------------- ----------------- ------------------------------------------------------------ -------------------
Underlying Profit / (loss) The Group defines
profit / (loss) before tax * Exceptional items underlying profit
before tax / (loss) before
tax as profit/
(loss) before tax
adjusted
for exceptional
items.
The directors view
underlying profit
/ (loss) before
tax to be a
meaningful measure
to analyse
the Group's
profitability.
Exceptional items
are additional
specific items
that because of
their size, nature
or incidence
in the results,
are considered to
hinder comparison
of the Group's
performance on a
period-to-period
basis and could
distort the
understanding of
our performance
for the period and
the comparability
between periods
and hence are
adjusted to arrive
at underlying
profit / (loss)
before tax.
---------------- ----------------- ------------------------------------------------------------ -------------------
Effective tax Reported tax The Group defines
rate rate * Exceptional items effective tax rate
as reported tax
rate (reported tax
* Foreign exchange rate movements charge divided by
reported profit
before tax)
* One-off tax impact of prior period, tax litigation adjusted for
settlement and impact of tax on permanent differences exceptional items,
foreign exchange
rate movements
and one-off tax
items of prior
period adjustment,
tax settlements
and impact of
permanent
differences on
tax.
This provides an
indication of the
current on-going
tax rate across
the Group.
Exceptional 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 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 period * Exceptional items underlying profit
after tax / (loss) after tax
as profit / (loss)
for the period
adjusted
for exceptional
items.
The directors view
underlying profit
/ (loss) after tax
to be a meaningful
measure to analyse
the Group's
profitability.
Exceptional items
are additional
specific items
that because of
their size, nature
or incidence
in the results,
are considered to
hinder comparison
of the Group's
performance on a
period-to-period
basis and could
distort the
understanding of
our performance
for the period and
the comparability
between periods
and hence are
adjusted to arrive
at underlying
profit/(loss)
after tax.
---------------- ----------------- ------------------------------------------------------------ -------------------
Earnings per EPS The Group defines
share before * Exceptional items earnings per share
exceptional before exceptional
items items as profit/
(loss) for the
period
before exceptional
items attributable
to owners of the
company divided by
the weighted
average
number of ordinary
shares in issue
during the
financial period.
This measure
reflects the
earnings per share
before exceptional
items for each
share unit
of the company.
Exceptional items
are additional
specific items
that because of
their size, nature
or incidence
in the results,
are considered to
hinder comparison
of the Group's
performance on a
period-to-period
basis and could
distort the
understanding of
our performance
for the period and
the comparability
between periods
and hence are
adjusted to arrive
at earnings for
the purpose of
earnings per
share before
exceptional items.
---------------- ----------------- ------------------------------------------------------------ -------------------
Operating free Cash generated The Group defines
cash flow from operating * Income tax paid operating free
activities cash flow as net
cash generated
* Changes in working capital from operating
activities
before income tax
* Other non-cash items paid, changes in
working capital,
other non-cash
* Non-operating income items,
non-operating
income,
* Charity and donation charity and
donation and
exceptional items
* Exceptional items less capital
expenditures. The
Group views
* Capital expenditures operating
free cash flow as
a key liquidity
measure, as it
indicates the cash
available to pay
dividends,
repay debt or make
further
investments in the
Group.
---------------- ----------------- ------------------------------------------------------------ -------------------
Net debt and No direct The Group defines
leverage ratio equivalent * Borrowing net debt as
borrowings
including lease
* Lease liabilities liabilities less
cash and cash
equivalents,
* Cash and cash equivalent term deposits with
banks, processing
costs related to
* Term deposits with banks borrowings and
fair value hedge
adjustments.
* Fair value hedges The Group defines
leverage ratio as
net debt divided
by underlying
EBITDA.
The directors view
net debt and the
leverage ratio to
be meaningful
measures to
monitor the
Group's ability to
cover its debt
through its
earnings.
---------------- ----------------- ------------------------------------------------------------ -------------------
Return on No direct Group defines
capital equivalent * Exceptional items to arrive at underlying EBIT return on capital
employed employed ('ROCE')
as underlying EBIT
divided by average
capital
employed.
The directors view
return on capital
employed as a
financial ratio
that measures the
Group's
profitability and
the efficiency
with which its
capital is being
utilised.
The Group defines
underlying EBIT as
operating profit/
(loss) for the
period adjusted
for
exceptional items.
Exceptional items
are additional
specific items
that because of
their size, nature
or incidence
in the results,
are considered to
hinder comparison
of the Group's
performance on a
period-to-period
basis and could
distort the
understanding of
our performance
for the period and
the comparability
between periods
and hence are
adjusted to arrive
at Underlying
EBIT.
Capital employed
is defined as sum
of equity
attributable to
owners of the
company,
non-controlling
interests and net
debt. Average
capital employed
is average of
capital employed
at the closing
and beginning of
the relevant
period.
For quarterly
computations, ROCE
is calculated by
dividing
Underlying EBIT
for the preceding
12 months by the
average capital
employed (being
the average of the
capital employed
averages
for the preceding
four quarters).
---------------- ----------------- ------------------------------------------------------------ -------------------
Some of the Group's IFRS measures and APMs are translated at
constant currency exchange rates to measure organic performance of
the Group. In determining the percentage change in constant
currency terms, both current and previous financial reporting
period's results have been converted using exchange rates
prevailing as on 31 March 2021. Reported currency percentage change
is derived on the basis of 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
No exceptional revenue has been recorded for the quarter ended
30 June 2021 or prior period. Hence, underlying revenue has not
been defined as an APM for this quarter. No deferred tax has been
recorded under exceptional tax item for the quarter ended 30 June
2021. Hence adjusted effective tax rate has similarly not been
defined as an APM for this quarter. Finally, the dividend is no
longer linked with free cash flow. Hence, free cash flow is no
longer defined as an APM.
Glossary
Technical and Industry Terms
4G data customer A customer having a 4G handset and who has used at least
1MB 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. 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.
---------------------------------------------------------- ----------------------------------------------------------
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.
---------------------------------------------------------- ----------------------------------------------------------
Broadband base stations Base stations that carry either 3G and/or 4G capability
across all technologies and spectrum
bands.
---------------------------------------------------------- ----------------------------------------------------------
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 represent
the underlying performance of the business. Constant
currency growth for prior periods are
calculated using closing exchange rates as at the end of
prior period.
---------------------------------------------------------- ----------------------------------------------------------
Churn Churn is derived by dividing the total number of customer
disconnections during the relevant
period by the average number of customers and dividing
the result by number of months in the
relevant 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 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 1MB 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 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.
---------------------------------------------------------- ----------------------------------------------------------
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.
---------------------------------------------------------- ----------------------------------------------------------
Free cash flow An alternative performance measure (non-GAAP). Free cash
flow is defined as operating free
cash flow less cash interest, income tax paid and change
in operating working capital.
---------------------------------------------------------- ----------------------------------------------------------
Information and communication technologies (ICT) ICT refers to all communication technologies, including
the internet, wireless networks, cell
phones, computers, software, middleware,
videoconferencing, social networking, and other media
applications and services.
---------------------------------------------------------- ----------------------------------------------------------
Interconnect user charges (IUC) Interconnect user charges are the charges paid to the
telecom operator on whose network a
call is terminated.
---------------------------------------------------------- ----------------------------------------------------------
Lease liability Lease liability represents the present value of future
lease payment obligations.
---------------------------------------------------------- ----------------------------------------------------------
Leverage An alternative performance measure (non-GAAP). Leverage
(or leverage ratio) is calculated
by dividing net debt at the end of the relevant period by
the underlying EBITDA for the preceding
12 months.
---------------------------------------------------------- ----------------------------------------------------------
Minutes of usage Minutes of usage refer to the duration in minutes for
which customers use the Group's network
for making and receiving voice calls. It is typically
expressed over a period of one month.
It includes all incoming and outgoing call minutes,
including roaming calls.
---------------------------------------------------------- ----------------------------------------------------------
Mobile services Mobile services are our core telecom services, mainly
voice and data services, but also including
revenue from tower operation services provided by the
Group and excluding mobile money services.
---------------------------------------------------------- ----------------------------------------------------------
Net debt An alternative performance measure (non-GAAP). The Group
defines net debt as borrowings including
lease liabilities less cash and cash equivalents, term
deposits with banks, processing costs
related to borrowings and fair value hedge adjustments.
---------------------------------------------------------- ----------------------------------------------------------
Net debt to underlying EBITDA (LTM) An alternative performance measure (non-GAAP) Calculated
by dividing net debt as at the end
of the relevant period by underlying EBITDA for the
preceding 12 months (from the end of the
relevant period). This is also referred to as the
leverage ratio.
---------------------------------------------------------- ----------------------------------------------------------
Network towers or "sites" Physical network infrastructure comprising a base
transmission system (BTS) which holds the
radio transceivers (TRXs) that define a cell and
coordinates the radio link protocols with
the mobile device. It includes all ground-based, roof top
and in-building solutions.
---------------------------------------------------------- ----------------------------------------------------------
Operating company (OpCo) Operating company (or OpCo) is a defined corporate
business unit, providing telecoms services
and mobile money services in the Group's footprint.
---------------------------------------------------------- ----------------------------------------------------------
Operating free cash flow An alternative performance measure (non-GAAP). Calculated
by subtracting capital expenditure
from underlying EBITDA.
---------------------------------------------------------- ----------------------------------------------------------
Operating leverage An alternative performance measure (non-GAAP). Operating
leverage is a measure of the operating
efficiency of the business. It is calculated by dividing
operating expenditure (excluding
regulatory charges) by total revenue.
---------------------------------------------------------- ----------------------------------------------------------
Operating profit Operating profit is a GAAP measure of profitability.
Calculated as revenue less operating
expenditure (including depreciation and amortisation and
operating exceptional items).
---------------------------------------------------------- ----------------------------------------------------------
Other revenue Other revenue includes revenues from messaging, value
added services (VAS), enterprise, site
sharing and handset sale revenue.
---------------------------------------------------------- ----------------------------------------------------------
Reported currency Our reported currency is US dollars. Accordingly, actual
periodic exchange rates are used
to translate the local currency financial statements of
OpCos into US dollars. Under reported
currency the assets and liabilities are translated into
US dollars at the exchange rates prevailing
at the reporting date whereas the statements of profit
and loss are translated into US dollars
at monthly average exchange rates.
---------------------------------------------------------- ----------------------------------------------------------
Smartphone A smartphone is defined as a mobile phone with an
interactive touch screen that allows the
user to access the internet and additional data
applications, providing additional functionality
to that of a basic feature phone which is used only for
making voice calls and sending and
receiving text messages.
---------------------------------------------------------- ----------------------------------------------------------
Smartphone penetration Calculated by dividing the number of smartphone devices
in use by the total number of customers.
---------------------------------------------------------- ----------------------------------------------------------
Total MBs on network Total MBs consumed (uploaded & downloaded) by customers
on the Group's GPRS, 3G and 4G network
during the relevant period.
---------------------------------------------------------- ----------------------------------------------------------
Underlying EBIT An alternative performance measure (non-GAAP). Defined as
operating profit before exceptional
items.
---------------------------------------------------------- ----------------------------------------------------------
Underlying EBITDA An alternative performance measure (non-GAAP). Defined as
operating profit before depreciation,
amortisation, CSR cost and exceptional items.
---------------------------------------------------------- ----------------------------------------------------------
Underlying EBITDA margin An alternative performance measure (non-GAAP). Calculated
by dividing underlying EBITDA for
the relevant period by revenue for the relevant period.
---------------------------------------------------------- ----------------------------------------------------------
Unstructured Supplementary Service Data Unstructured Supplementary Service Data (USSD), also
known as "quick codes" or "feature codes",
is a communications protocol for GSM mobile operators,
similar to SMS messaging. It has a
variety of uses such as WAP browsing, prepaid callback
services, mobile-money services, location-based
content services, menu-based information services, and
for configuring phones on the network.
---------------------------------------------------------- ----------------------------------------------------------
Voice minutes of usage per customer per month Calculated by dividing the total number of voice minutes
of usage on the Group's network during
the relevant period by the average number of customers
and dividing the result by the number
of months in the relevant period.
---------------------------------------------------------- ----------------------------------------------------------
Weighted average number of shares The weighted average number of shares is calculated by
multiplying the number of outstanding
shares by the portion of the reporting period those
shares covered, doing this for each portion
and then summing the total.
---------------------------------------------------------- ----------------------------------------------------------
Abbreviations
2G Second-generation mobile technology
---------- ------------------------------------------------
3G Third-generation mobile technology
---------- ------------------------------------------------
4G Fourth-generation mobile technology
---------- ------------------------------------------------
ARPU Average revenue per user
---------- ------------------------------------------------
bn Billion
---------- ------------------------------------------------
bps Basis points
---------- ------------------------------------------------
CAGR Compound annual growth rate
---------- ------------------------------------------------
Capex Capital expenditure
---------- ------------------------------------------------
CSR Corporate social responsibility
---------- ------------------------------------------------
DTA Deferred Tax Asset
---------- ------------------------------------------------
EBIT Earnings before interest and tax
---------- ------------------------------------------------
EBITDA Earnings before interest, tax, depreciation and
amortisation
---------- ------------------------------------------------
EPS Earnings per share
---------- ------------------------------------------------
FPPP Financial position and prospects procedures
---------- ------------------------------------------------
GAAP Generally accepted accounting principles
---------- ------------------------------------------------
GB Gigabyte
---------- ------------------------------------------------
HoldCo Holding company
---------- ------------------------------------------------
IAS International accounting standards
---------- ------------------------------------------------
ICT Information and communication technologies
---------- ------------------------------------------------
ICT (Hub) Information communication technology (Hub) IFRS
---------- ------------------------------------------------
IFRS International financial reporting standards
---------- ------------------------------------------------
IMF International monetary fund
---------- ------------------------------------------------
IPO Initial public offering
---------- ------------------------------------------------
KPIs Key performance indicators
---------- ------------------------------------------------
KYC Know your customer
---------- ------------------------------------------------
LTE Long-term evolution (4G technology)
---------- ------------------------------------------------
LTM Last 12 months
---------- ------------------------------------------------
m Million
---------- ------------------------------------------------
MB Megabyte
---------- ------------------------------------------------
MI Minority interest (non-controlling interest)
---------- ------------------------------------------------
NGO Non-governmental organisation
---------- ------------------------------------------------
OpCo Operating company
---------- ------------------------------------------------
P2P Person to person
---------- ------------------------------------------------
PAYG Pay-as-you-go
---------- ------------------------------------------------
QoS Quality of service
---------- ------------------------------------------------
RAN Radio access network
---------- ------------------------------------------------
SIM Subscriber identification module
---------- ------------------------------------------------
Single RAN Single radio access network
---------- ------------------------------------------------
SMS Short messaging service
---------- ------------------------------------------------
TB Terabyte
---------- ------------------------------------------------
Telecoms Telecommunications
---------- ------------------------------------------------
UoM Unit of measure
---------- ------------------------------------------------
USSD Unstructured supplementary service data
---------- ------------------------------------------------
[1] Alternative performance measures (APM) are described on page 14.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
QRFRPMLTMTATBFB
(END) Dow Jones Newswires
July 29, 2021 02:00 ET (06:00 GMT)
Airtel Africa (LSE:AAF)
Historical Stock Chart
From Feb 2024 to Mar 2024
Airtel Africa (LSE:AAF)
Historical Stock Chart
From Mar 2023 to Mar 2024