THUR. 02 FEB, 2023-theGBJournal| Airtel Africa Plc’s revenue for nine-month period ended 31 December 2022 rose 12.1%, to $3.914 billion and 17.3% in constant currency with Q3’23 growth of 10.7%, the company said today.
Airtel explains that the differential in growth rates was due to an average currency devaluation between the periods, mainly in the Central African franc (14.1%) which is largely pegged to the Euro, the Nigerian naira (4.5%), the Kenyan shilling (8.8%), the Ugandan shilling (5.0%) and the Malawian kwacha (21.2%), in turn partially offset by appreciation in the Zambian kwacha (14.5%).
It said the revenue growth of 17.3% in constant currency growth was driven by both customer base growth of 10.1% and ARPU growth of 7.2%.
Profit after tax grew 1.7% to $523m, as EBITDA growth was partially offset by higher foreign exchange and derivative losses of $184m.
EBITDA was $1.916 billion, up 12.6% in reported currency and 17.4% in constant currency, with an EBITDA margin of 49.0%, increasing 20 basis points in reported currency and broadly flat in constant currency.
EPS before exceptional items was 10.8 cents, a reduction of 5.8% largely driven by higher foreign exchange and derivative losses of $184m. Basic EPS increased to 12.5 cents (up by 6.3%) as a result of deferred tax asset recognition in Kenya. EPS before exceptional items and excluding foreign exchange and derivative losses increased by 21.6%.
Airtel said Capex increased 5.8% to $457m, in line with its guidance, as they continue to invest for future growth.
‘’We will continue to invest in expanding our network and evolving our service offerings to further deepen both financial and digital inclusion across our markets. We have especially focussed on enhancing our spectrum footprint across all our markets. Over the last nine months we have spent almost $490m on 4G and 5G spectrum across key markets to improve network capacity and quality, future-proof the company for continued growth opportunities and facilitate economic progress in all our markets,’’ Segun Ogunsanya, chief executive officer said in an official statement.
‘’Additionally, we acquired spectrum in Nigeria, DRC, Tanzania, Zambia and Kenya over the nine-month period.’’
In July 2022, the Group prepaid $450m of outstanding external debt at HoldCo. The company said the remaining debt at HoldCo is now $550m, falling due in May 2024. The leverage ratio of 1.4x was slightly higher than the September 2022 level (1.3x), largely driven by the acquisition of spectrum in Nigeria.
‘’Despite the inflationary pressures across our markets, the strong revenue performance in the first nine months of the year, combined with continued focus on cost optimisation, contributed to EBITDA growth of over 17% in constant currency, with stable EBITDA margins,’’ the CEO said.
Meanwhile, Airtel’s total customer base rose to 138.5 million (up 10.1%), as the penetration of mobile data and mobile money services continued to rise, driving the data customer base up 13.6% and mobile money customer base up 22.2%.
Average Revenue per user (ARPU), a key performance metric, grew by 7.2% in constant currency, largely driven by increased usage across voice, data, and mobile money. The resulting in 18% revenue growth in the quarter as penetration across each segment continues to increase.
Mobile services revenue grew by 15.9% in constant currency supported by growth across the regions, with Nigeria growing 20.9%, East Africa by 11.9% and Francophone Africa by 11.8%. Voice revenue grew by 12.7% and data revenue was up 22.3%. Mobile money revenue growth of 29.8% was driven by both East Africa and Francophone Africa, of 32.5% and 21.7% respectively.
Airtel noted that the strong revenue growth was impacted by the effect of some voice customers being barred in Nigeria and the loss of tower sharing revenues following the sales of towers in Tanzania, Madagascar and Malawi in the prior period.
A total of 13.6 million customers were originally barred, out of which 6.2 million customers (46%) have subsequently submitted their NINs and 3.2 million customers (23%) have been fully verified and unbarred.
‘’We estimate that this resulted in the loss of approximately $87m of revenues in nine–month period. Other revenues were impacted by c.$21m of tower sharing revenues lost through associated tower sales in the second half of the previous year. Excluding these the growth would have been around 20.6% in constant currency terms,’’ Airtel said.
Ogunsanya said he is particularly excited by the performance of the company’s mobile money business, with annualized transaction value reaching nearly $100bn, as they continue to drive financial inclusion in the continent.
‘’I am particularly pleased with these results which demonstrate the opportunities these markets offer, our ability to deliver against these opportunities and the contribution we make to local communities and economies across our footprint. For the remainder of the financial year. we continue to anticipate sustained growth in the business with continued EBITDA margin resilience,’’ he said.
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