THURS, JULY 27 2023-theGBJournal |Airtel Africa plc published its performance results for the quarter ended 30 June 2023 Wednesday, reporting revenue growth in constant currency of 20.4%, with reported currency revenues up by 9.6% to $1,377m as well.
While each segment’s reported currency revenue growth was impacted by currency devaluation, they all delivered double-digit constant currency revenue growth.
Across the Group mobile service revenue grew by 19.1% in constant currency, driven by voice revenue growth of 11.9% and data revenue growth of 29.8%. Mobile money revenue grew by 31.2% in constant currency.
EBITDA increased by 22.5% in constant currency, and 11.1% in reported currency to $682m, with an EBITDA margin of 49.5%, reflecting a 69bps margin improvement despite inflationary cost pressures.
Profit after tax was negative ($151m) driven largely by a foreign exchange loss of $471m recorded in finance cost before tax and $317m after tax because of the devaluation of the Nigerian naira in the month of June 2023. This impact has been classified as a non-operating exceptional item.
EPS before exceptional items was 3.9 cents, an improvement of 3.3%. EPS before exceptional items and excluding foreign exchange and derivative losses was 6.0 cents, up by 16.2%. Basic EPS at negative (4.5 cents) compared to 4.4 cents in the prior period, impacted by $317m net exceptional loss on account of naira devaluation in the month of June 2023.
Highlights of Operating key performance indicators (KPIs)
Total customer base grew by 8.8% to 143.1 million, as the penetration of mobile data and mobile money services continued to rise, driving a 22.0% increase in data customers to 56.8 million and a 24.3% increase in mobile money customers to 34.3 million.
Constant currency ARPU growth of 11.1% was largely driven by increased usage across voice, data and mobile money.
Mobile money transaction value increased by 47.2% in constant currency, with Q1’24 annualised transaction value of $107bn in reported currency.
Capital allocation
Capex at $140m is flat compared to the prior period as Airtel continue to invest for future growth.
In July 2022, the Group prepaid $450m of outstanding external debt at HoldCo. The remaining debt at HoldCo is now $550m, falling due in May 2024. Cash at the holding companies was $505m at the end of the period.
Leverage of 1.3x in June 2023, was broadly stable despite over $500m of spectrum investment in the last fiscal year and the renewal of 2100 MHz spectrum licence in Nigeria in the period.
Olusegun Ogunsanya, chief executive officer, on the trading update:
‘The Group delivered a strong operating performance with improvement in both constant currency revenue growth and EBITDA margin despite the challenging macro environment. The acceleration in voice, data and mobile money revenue growth is testament to the success of our six-pillar ‘win-with’ strategy. Our continuing investment in network and distribution enabled us to expand our customer base further, driving increased usage on our network.
This strong momentum is supported by a continued focus on cost efficiencies, which enabled us to expand our EBITDA margins in the quarter.
Despite the strong operating performance, our results have been impacted by foreign exchange headwinds. This quarter saw the announcement of the change to the FX market in Nigeria which resulted in a significant naira devaluation.
We have welcomed this reform as very positive for the medium and long-term development of our business in Nigeria, our largest market. The country offers significant untapped growth potential, underpinned by highly attractive fundamentals.
This has supported and sustained a strong operating performance which has seen a five-year revenue and EBITDA CAGR of 23.5% and 27.3% in constant currency, respectively.
We expect the FX reforms to improve liquidity over time, thereby alleviating the challenges faced by international businesses over the last few years associated with accessing US dollars and thus hindering accelerated growth. However, in the reporting period the devaluation has had a material impact on our results. Over the last few years, we have actively reduced our FX exposure across the Group, and this will continue to be a focus area in the future to limit the impact of any future devaluation.
Our focus remains on areas which we can control: the provision of reliable telecom and mobile money services, at affordable rates across our 14 sub-Saharan markets in Africa where demand for these services remains significant. The excellent operating performance over the last quarter highlights this success, and we are well positioned to deliver against the growth opportunities these markets offer, with a continued focus on margin resilience.’
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