FRI 04 FEB, 2022-theGBJournal- Airtel Africa plc Friday reported revenue growth of 21.7% to $3,492 million for nine-month period ended 31 December 2021, basic EPS of 11.7 cents, an increase of 113.8%, largely as a result of higher profit. EPS before exceptional items increased to 11.5 cents, up from 5.0 cents in the previous period.
Airtel’s Constant currency underlying revenue growth was recorded across all regions: Nigeria up 29.0%, East Africa up 24.4% and Francophone Africa up 19.0%; and across all key services, with revenue in Voice up 16.1%, and in Data and Mobile Money both up 37.2%.
Net finance costs were lower compared with the previous period driven by lower forex losses. The increase in tax charges of $129m was due to higher operating profit and withholding tax on dividends by subsidiaries, with the prior period also benefitting from $14m deferred tax credit recognition.
Net debt was $3,050m, a reduction of $468m mainly due to increased cash generation and proceeds from Airtel Money investments.
Leverage improved to 1.4x from 2.1x in the previous period, largely driven by increased cash generation, expansion in underlying EBITDA and $550m of receipts from mobile money minority investors. Our balance sheet has also been further de-risked by continued localisation of our debt into the OpCos.
‘’A strong third quarter has contributed to a pleasing nine-month financial performance across all key metrics.,’’ says Segun Ogunsanya, chief executive officer, on the trading update.
‘’Operationally we have continued to execute on our network and distribution expansion plans, driving continued strong growth in ARPUs across voice, data and mobile money. We have also seen further improvement in our customer growth trends for the Group with Nigeria returning to strong customer growth after a period affected by the implementation of new ‘know your customer’ requirements, posting 1.9 million net additions in the third quarter, taking total Group customer additions to 3.1 million,’’
Earnings Highlight
-Underlying EBITDA was $1,703m, growing by 31.3% in reported currency with an EBITDA margin of 48.8%, an increase of 326 basis points led by both revenue growth and improved operational efficiencies.
– Operating profit grew by 43.1% to $1,146m in reported currency.
-Profit after tax almost doubled to $514m as higher profit before tax more than offset associated tax charges.
-Basic EPS was 11.7 cents, an increase of 113.8%, largely as a result of higher profit. EPS before exceptional items increased to 11.5 cents, up from 5.0 cents in the previous period.
– Operating free cash flow grew by 42.2% to $1,271m and net cash generated from operating activities was up 23.1% to $1,499m.
-Leverage ratio improved to 1.4x from 2.1x in the previous period.
-The customer base expanded to 125.8 million, growing by 5.8%, with increased penetration across mobile data (customer base up 11.1%) and mobile money services (customer base up 19.6%). Customer base growth was affected by the NIN/SIM regulations in Nigeria but returned to growth in this region in the third quarter; excluding Nigeria the customer base grew by 12.0%.
Ogunsanya said he is particularly pleased with developments in Nigeria, where in November we received approval in principle for both a payment service bank (mobile money) licence and a super-agent licence.
‘’We are now working closely with the Central Bank to meet all its conditions to receive the final operating licences and commence operations. This will enable us to expand our digital financial products and reach the millions of Nigerians that do not have access to traditional financial services.’’
According to the CEO, the telecoms giant continued to strengthen its balance sheet, with its leverage ratio now 1.4 times underlying EBITDA, thanks both to the continued increases in operating cash flow delivery and to the $550m of cash that has now been received from minority investments into our mobile money business.
‘’We will continue to invest in expanding and evolving our platform to further deepen both financial and digital inclusion across Africa. I continue to see huge growth potential across voice, data and mobile money and our strategy is delivering against this opportunity. Our sustained investments in both network and distribution expansion will help to ensure that both the communities and economies across our footprint will continue to benefit from increased and affordable connectivity and financial inclusion. We are committed to continue to improve the delivery of our services to our customers, with sustainability at the heart of our continued purpose to transform lives across Africa.”
On 14 November 2021, Airtel Africa’s subsidiary Airtel Mobile Commerce Nigeria Ltd was granted approval in principle by the Central Bank of Nigeria to operate as a super-agent in Nigeria.
The super-agent licence is distinct from the PSB licence. Under the super-agent licence, we are able to create an agent network that can service the customers of licensed Nigerian banks, payment service banks and licenced mobile money operators in Nigeria.
Final approval of the super-agent licence is subject to the Group satisfying certain standard conditions.
Post period end, on 4 February 2022, Airtel Africa announced that its 100% owned subsidiary, Bharti Airtel International (Netherlands) B.V., had elected to redeem all of its 5.125% Guaranteed Senior Notes due 2023 (‘Notes’), aggregating to US$504,915,000, on 4 March 2022 (‘Redemption Date’), ahead of its maturity in March 2023.
In addition to the outstanding principal, the redemption price will include settlement of all outstanding accrued interest up to the Redemption Date, plus the applicable make-whole premium in accordance with the terms of the Notes.
This early redemption aligns with the continuation of our pursuit of a reduction of external foreign currency debt at Group level. Completion of Airtel Nigeria minority buyout offer
On 2 December 2021, further to the buyout offer announcement of 4 October 2021, Airtel Africa announced the completion of the minority shareholding buyback of Airtel Networks Limited (‘Airtel Nigeria’), a subsidiary of Airtel Africa plc and a leading provider of telecommunication services in Nigeria.
The purchase consideration for the 8.22% minority shareholdings acquired under the buyback was NGN 61bn, equivalent to $147m at an exchange rate of 415.07 NGN/USD. Airtel Africa now holds 99.96% of the issued share capital of Airtel Nigeria
Airtel Africa is one of the leading providers 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.
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