Trade Now

Capital at risk Advertisement
Share Name Share Symbol Market Type Share ISIN Share Description
Airtel Africa Plc LSE:AAF London Ordinary Share GB00BKDRYJ47 ORD USD0.50
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.30 -0.22% 136.60 135.80 136.00 139.40 135.60 139.40 2,651,795 16:35:14
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mobile Telecommunications 3,593.4 931.0 12.8 8.8 5,134

Airtel Africa PLC Q1 23 Results

28/07/2022 7:00am

UK Regulatory (RNS & others)


Airtel Africa (LSE:AAF)
Historical Stock Chart


From Jul 2022 to Sep 2022

Click Here for more Airtel Africa Charts.

TIDMAAF

RNS Number : 0036U

Airtel Africa PLC

28 July 2022

Airtel Africa plc

Results for the quarter ended 30 June 2022

28 July 2022

Double-digit revenue growth, margin and earnings progression and further strengthening of our balance sheet

Highlights

-- Revenue grew by 13.0% in reported currency to $1,257m. In constant currency terms revenue grew by 15.3%.

-- Total revenues, for mobile services and mobile money services combined, grew in Nigeria by 18.3%, in East Africa by 14.1% and in Francophone Africa by 11.7%.

-- Revenue growth in constant currency was posted across all four reporting segments. Mobile Services revenue in Nigeria grew by 18.3%, in East Africa by 11.1% and in Francophone Africa by 10.6% (and across the Group by 14.2%, with voice revenue up by 11.3% and data revenue up by 19.8%). Mobile Money revenue grew by 26.5%, driven by growth of 26.9% in East Africa and 25.4% in Francophone Africa.

   --      EBITDA grew by 14.9% to $614m in reported currency. 

-- EBITDA margin was 48.8%, an increase of 78 basis points in reported currency and 52 basis points in constant currency.

   --      Operating profit grew by 20.6% to $425m in reported currency. 
   --      Profit after tax grew by 25.3% to $178m. 

-- Basic EPS increased to 4.4 cents (up by 31.0%). EPS before exceptional items was 3.8 cents, up from 3.2 cents in the prior period.

-- Operating free cash flow grew by 10.3% to $473m, while net cash generated from operating activities reduced by 13.2% to $388m, mainly due to increased cash tax payments from both higher taxes on declared dividends and increased taxable profits.

-- Leverage ratio has improved to 1.3x from 1.8x in the prior period. Post period end, 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.

-- Our total customer base increased to 131.6 million, up 8.9%, with increased penetration across mobile data (customer base up 9.7%) and mobile money services (customer base up 19.7%).

 
 Alternative performance measures (1)                                GAAP measures 
  (Quarter ended)                                                     (Quarter ended) 
------------------------------------------------------------------  ------------------------------------------------- 
       Description         Jun-22   Jun-21   Reported    Constant       Description       Jun-22   Jun-21   Reported 
                                              currency    currency                                           currency 
------------------------                                            ------------------- 
                             $m       $m      change      change                            $m       $m      change 
------------------------  -------  -------  ----------  ----------  -------------------  -------  -------  ---------- 
 Revenue                   1,257    1,112      13.0%       15.3%     Revenue              1,257    1,112      13.0% 
------------------------  -------  -------  ----------  ----------  -------------------  -------  -------  ---------- 
 EBITDA                     614      534       14.9%       16.5%     Operating profit      425      352       20.6% 
------------------------  -------  -------  ----------  ----------  -------------------  -------  -------  ---------- 
                                                                     Profit after 
 EBITDA margin             48.8%    48.0%     78 bps      52 bps      tax                  178      142       25.3% 
------------------------  -------  -------  ----------  ----------  -------------------  -------  -------  ---------- 
 EPS before exceptional                                              Basic EPS ($ 
  items ($ cents)           3.8      3.2       18.3%                  cents)               4.4      3.3       31.0% 
------------------------  -------  -------  ----------  ----------  -------------------  -------  -------  ---------- 
                                                                     Net cash generated 
 Operating free                                                       from operating 
  cash flow                 473      428       10.3%                  activities           388      447      (13.2%) 
------------------------  -------  -------  ----------  ----------  -------------------  -------  -------  ---------- 
 

( (1) Alternative performance measures (APM) are described on page 15.

Segun Ogunsanya, chief executive officer, on the trading update:

'I am pleased to report that the Group has continued to post double-digit revenue growth, margin improvement and strong earnings growth. I am also particularly pleased with our ongoing strengthening of the balance sheet which continued after the period ended, with early repayment of $450m of debt at Group level.

As we flagged in our full year announcement, this quarter we have faced headwinds from outbound voice call barring for customers who had not yet registered their National Identification Numbers in Nigeria and the loss of site sharing revenue in those OpCos where we recently sold towers. Inflation is also having an impact on our cost base, particularly on energy costs, but our continued efficiency drives have ensured that we have still been able to increase our margins, albeit at a slightly slower rate.

After receiving the Payment Service Bank licence in Nigeria just a few months ago, it is a testament to our prior preparation that we have already managed to launch our mobile money operations in a few select locations without any operational issues. We are excited by the commercial developments and opportunities here. We also continued to invest for growth and have made a couple of major additional spectrum acquisitions recently in the DRC and Kenya in anticipation of continued strong data demand growth in these markets.

We continue to target growth ahead of the market this year and, despite inflationary pressures, our continued focus on cost efficiencies should also support margin resilience. Longer term, the opportunities for sustainable profitable growth stemming from our underpenetrated markets for each of mobile voice, data and mobile money services remain hugely attractive, and we are confident of continuing to deliver on our growth strategy.'

Airtel Africa plc ('Airtel Africa' or 'Group') results for the quarter ended 30 June 2022 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 2022 except to the extent required/ prescribed by IAS 34. This report should be read in conjunction with the audited consolidated financial statements and related notes for the year ended 31 March 2022. The comparative information has been drawn based on Airtel Africa plc's audited consolidated financial statements for the year ended 31 March 2022. Comparative quarterly information is drawn from the unaudited IAS 34 financials of the 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 2021.

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 
 Emily Dillon 
 airtelafrica@hudsonsandler.com           +44 207 796 4133 
 

Conference call

Management will host an analyst and investor conference call at 12:00pm UK time (BST), on Thursday 28 July 2022, including a Question-and-Answer session.

To receive an invitation with the dial in numbers to participate in the event, please register beforehand using the following link:

Conference call registration link

Key consolidated financial information

 
 Description                          Unit       Quarter ended 
                                   of measure 
-------------------------------                 ---------------------------------------- 
                                                 Jun-22   Jun-21   Reported    Constant 
                                                                    currency    currency 
                                                                     change      change 
-------------------------------                 -------  -------  ----------  ---------- 
 Profit and loss summary 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Revenue (1)                           $m        1,257    1,112      13.0%       15.3% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
  Voice revenue                        $m         610      562       8.6%        11.3% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
  Data revenue                         $m         418      356       17.3%       19.8% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
  Mobile money revenue 
   (2)                                 $m         159      124       28.6%       26.5% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
  Other revenue                        $m         106       98       8.0%        10.4% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Expenses                              $m        (645)    (581)      11.0%       13.7% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 EBITDA (3)                            $m         614      534       14.9%       16.5% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
  EBITDA margin                        %         48.8%    48.0%     78 bps      52 bps 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Depreciation and amortisation         $m        (189)    (182)      3.9%        6.8% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Operating exceptional 
  items                                $m          -        -        0.0%        0.0% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Operating profit                      $m         425      352       20.6%       21.5% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Net finance costs                     $m        (151)     (97)      55.2% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Non-operating exceptional 
  items(4)                             $m          -        4      (100.0%) 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Profit before tax (5)                 $m         276      259       6.5% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Tax                                   $m        (119)    (117)      1.5% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Tax - exceptional items 
  (6)                                  $m          21       -        0.0% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Total tax charge                      $m         (98)    (117)     (16.3%) 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Profit after tax                      $m         178      142       25.3% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Non-controlling interest              $m         (15)     (17)     (16.1%) 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Profit attributable to 
  owners of the company 
  - before exceptional 
  items                                $m         143      121       18.2% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Profit attributable 
  to owners of the company             $m         163      125       30.9% 
-------------------------------                 -------  -------  ----------  ---------- 
 EPS - before exceptional 
  items                              cents        3.8      3.2       18.3% 
===============================  =============  =======  =======  ==========  ========== 
 Basic EPS                           cents        4.4      3.3       31.0% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Weighted average no of 
  shares                            million      3,754    3,755     (0.0%) 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Capex                                 $m         141      106       33.5% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Operating free cash flow              $m         473      428       10.3% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Net cash generated from 
  operating activities                 $m         388      447      (13.2%) 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Net debt                              $m        3,056    3,536 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Leverage (net debt to 
  EBITDA)                            times        1.3x     1.8x 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Return on capital employed            %         24.6%    18.3%     634 bps 
-------------------------------                 -------  -------  ----------  ---------- 
 Operating KPIs 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 ARPU                                  $          3.2      3.1       3.4%        5.4% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Total customer base                million      131.6    120.8      8.9% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Data customer base                 million       46.5     42.4      9.7% 
-------------------------------  -------------  -------  -------  ----------  ---------- 
 Mobile money customer 
  base                              million       27.6     23.1      19.7% 
-------------------------------                 -------  -------  ----------  ---------- 
 

(1) Revenue includes inter-segment eliminations of $36m for the quarter ended 30 June 2022 and $28m for the prior period.

(2) Mobile money revenue post inter-segment eliminations with mobile services was $123m for the quarter ended 30 June 2022, and $96m for the prior period.

(3) EBITDA includes other income of $2m for the quarter ended 30 June 2022, and $3m for the prior period.

(4) Non-operating exceptional items in the previous period include a profit of $4m from the sale of towers in Rwanda.

(5) Profit before tax in the quarter ended 30 June 2022 include $2m share of profit from associates.

(6) Tax exceptional items in the quarter ended 30 June 2022 reflect the initial recognition of a deferred tax credit of $21m in Kenya.

Financial review for the quarter ended 30 June 2022

Revenue in reported currency grew by 13.0%. This overall growth is slightly slower than recent trends due to some specific challenges this quarter largely as a result of the effect of voice customers barred in Nigeria and the loss of tower sharing revenues following the recent sales of towers in Tanzania, Madagascar and Malawi. Revenue in constant currency grew by 15.3% for the Group. Excluding these specific challenges growth for the quarter would have been around 19% in constant currency terms.

Owing to significant growth in mobile money business and corresponding changes in the organization structure, combined with changes in the information provided to the Group CEO (Chief Operating Decision Maker) for the allocation of resources and the assessment of performance; with effect from April 2022, the Group has identified mobile money as a new operating and reportable segment. Thus, the Group now reports segmental performance for mobile services in Nigeria, East Africa and Francophone Africa, and for mobile money. The consolidated regional performance, comprising both mobile services and mobile money, for each of Nigeria, East Africa and Francophone Africa is provided on page 13 to help with reconciliation to historical segmental reporting.

Double digit revenue growth was posted across all reporting segments: with mobile services revenue in Nigeria up 18.3%, East Africa up 11.1% and Francophone Africa up 10.6% (with overall mobile services growing by 14.2%, with voice revenue growth of 11.3% and data revenue growth of 19.8%; and with growth of other revenues of 10.4%, marginally impacted by the c.$7m tower sharing revenues lost through tower sales). Mobile money revenue grew by 26.5% in constant currency, driven by growth of 26.9% in East Africa and 25.4% in Francophone Africa.

Net finance costs increased by $54m, as a result of $51m higher foreign exchange and derivative losses and $6m higher interest on lease obligations, partially offset by lower interest costs due to debt reduction (including the repayment of $505m bonds in March 2022).

Total tax charges were $19m lower mainly due to the initial recognition of a deferred tax credit of $21m in Kenya. Basic EPS improved to 4.4 cents, while EPS before exceptional items improved to 3.8 cents. The increase in basic EPS was mainly due to higher operating profits and the initial recognition of a deferred tax credit of $21m in Kenya, which more than offset foreign exchange and derivative losses.

Leverage improved to 1.3x from 1.8x in the prior period, largely driven by increased cash generation, the expansion of EBITDA and proceeds from Airtel Money investments. Our balance sheet has also been further de-risked by continued localisation of our debt into the OpCos and material debt reduction in HoldCo. Following the post period end prepayment of $450m bonds in July 2022, the remaining debt at HoldCo is now $550m.

GAAP measures

Revenue

Reported revenue increased to $1,257m, growing by 13.0% in reported currency, and by 15.3% in constant currency driven by both customer base growth of 8.9% and ARPU growth of 5.4%. The constant currency growth was partially offset by average currency devaluations between the periods, mainly in the Central African franc (13.2%), the Nigerian naira (1.8%), the Kenyan shilling (8.0%) and the Malawian kwacha (11.2%), in turn partially offset by appreciation in the Zambian kwacha (23.4%).

Mobile services revenue grew by 14.2% in constant currency, supported by growth of 18.3% in Nigeria, 11.1% in East Africa and 10.6% in Francophone Africa. Mobile money revenue grew by 26.5% in constant currency, driven by revenue growth in East Africa of 26.9% and Francophone Africa of 25.4%.

Revenue growth for the quarter was impacted by the effect of barring outgoing calls in Nigeria for those customers who had not submitted their National Identity Numbers ('NINs'). A total of 13.6 million customers were originally barred, out of which 5.3 million customers (39%) have subsequently submitted their NINs and 2.3 million customers (17%) have been fully verified and unbarred. We estimate that this resulted in the loss of approximately $34m of revenues in the quarter, providing a drag on revenue growth of almost 3% at Group level (impact of 7.5% in Nigeria). The growth in other revenues was also impacted by c.$7m of tower sharing revenues lost through associated tower sales.

Operating profit

Operating profit increased by 20.6% to $425m as a result of revenue growth and modest improvements in operating efficiency in East Africa and Francophone Africa.

Net finance costs

Net finance costs increased by $54m, as a result of $51m higher foreign exchange and derivative losses and $6m higher interest on lease obligations, partially offset by lower interest costs due to a reduction in debt (including $505m bonds repurchased in March 2022).

The Group's effective interest rate increased to 5.6% compared to 5.0% in the prior period, largely driven by the repayment of $935m of HoldCo debt, which carried a lower-than-average coupon, and due to higher local currency debt at the OpCo level.

Taxation

Total tax charges were $98m, a reduction of $19m, due to the initial recognition of a deferred tax credit of $21m in Kenya. Excluding exceptional items, tax was higher by $2m due to higher operating profit and withholding tax on dividends by subsidiaries.

Profit after tax

Profit after tax increased by 25.3% to $178m, mainly led by higher operating profits which more than offset the foreign exchange and derivative losses. Additionally, the current quarter benefited from the initial recognition of a deferred tax credit of $21m in Kenya.

Basic EPS

Basic EPS improved to 4.4 cents, an improvement of 1.1 cents (+31.0%) from 3.3 cents in the prior period. This increase was mainly due to higher operating profits and the recognition of a deferred tax credit of $21m in Kenya this quarter, which more than offset foreign exchange and derivative losses.

Net cash generated from operating activities

Net cash generated from operating activities was $388m, 13.2% lower than the $447m of the prior period. This was largely due to higher cash tax payments as a result of higher dividend tax on declared dividend and increased taxable profits, partially offset by higher profit before tax.

Alternative performance measures [1]

EBITDA

EBITDA increased to $614m, up by 14.9% in reported currency, and by 16.5% in constant currency. Growth in EBITDA was led by revenue growth and supported by continued improvement in operating efficiencies which more than offset inflationary cost pressures. The EBITDA margin improved by 78 basis points in reported currency to 48.8%.

Foreign exchange had an adverse impact of $23m on revenue, and $8m on EBITDA, as a result of currency devaluations, mainly in the Central African franc (13.2%), the Nigerian naira (1.8%), the Kenyan shilling (8.0%) and the Malawian kwacha (11.2%), in turn partially offset by appreciation in the Zambian kwacha (23.4%).

With respect to currency devaluation sensitivity, on a 12-month basis, a 1% currency devaluation across all currencies in our OpCos would have a negative impact of $45m on revenues, $27m on EBITDA and $19m on finance costs. Our largest exposure is to the Nigerian naira, for which a 1% devaluation would have a negative impact of $19m on revenues, $11m on EBITDA and $7m on finance costs.

Tax

The effective tax rate was 39.9%, compared to 39.1% in the prior period, largely due to profit mix changes amongst the OpCos and the impact of withholding taxes on dividends. 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 withholding taxes on dividends by subsidiaries.

Exceptional items

Non-operating exceptional items in the previous period relate to a gain of $4m from the profit on the sale of towers in Rwanda. Tax exceptional items this quarter benefited from the initial recognition of a deferred tax credit of $21m in Kenya.

EPS before exceptional items

EPS before exceptional items increased to 3.8 cents, up by 18.3% from 3.2 cents in the prior period. This increase was mainly due to higher operating profits which more than offset foreign exchange and derivative losses .

Operating free cash flow

Operating free cash flow was $473m, up by 10.3%, as higher EBITDA more than offset increased capital expenditure. Capital expenditure during the period was $35m higher relating mainly to planned network expansion.

Leverage

Leverage (net debt to EBITDA) improved to 1.3x at 30 June 2022, from 1.8x at 30 June 2021, largely driven by increased cash generation, EBITDA expansion and the receipt of $550m from mobile money minority investments. Our balance sheet has continued to be de-risked through a reduction of HoldCo debt to $1bn, from $1.9bn in the prior period; and the increased localisation of our debt into the OpCos, such that our HoldCo debt is significantly lower than gross OpCo debt of $3bn (including lease obligations). In July 2022, our HoldCo debt was reduced even further to $550m, following the early repayment of $450m of senior notes due in May 2024.

Other significant updates

NIN - SIM linkage implementation in Nigeria

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. To complete the registration process, we must link the NIN information received with the SIM of the respective subscribers and share the same with the National Identity Management Commission (NIMC).

The original regulatory directive set an initial deadline for customers to register (link) their NIN with their SIM of 30 December 2020. This was subsequently moved several times, with the last deadline being 31 March 2022. Airtel Nigeria was subsequently notified that with effect from 4 April 2022, all SIMs that have not been linked to a NIN were to be placed on 'receive only' status, meaning all their outgoing calls have been barred with immediate effect. Subscribers of such lines can still link their SIMs to their NINs in order that these restrictions can be lifted. Customers have therefore been given a final opportunity to fully comply with the latest registration requirements. A total of 13.6 million customers were initially barred out of which 5.3 million (39%) have subsequently submitted their NIN and 2.3 million (17%) have subsequently been verified and unbarred.

As at the end of June 2022, we had collated NIN information for 40.7 million active customers. Revenues for those subscribers who have not yet linked their NIN with their SIM amount to around 7% of total revenues from Nigeria, and around 3% of total revenues for the Group. As we reported might happen, SIM registration has accelerated, and some SIM consolidation is occurring in response to implementation, potentially reducing the future financial impact.

We continue to work closely with the regulator and impacted customers to help them to comply with the registration requirements, making every effort to minimise disruption and ensure affected customers can continue to benefit from full-service connectivity as soon as possible; in line with our aim to drive increased connectivity and digital inclusion across Nigeria.

Nigeria mobile money operationalisation

On 29 April 2022, we announced that the Central Bank of Nigeria ('CBN') had confirmed that Smartcash Payment Service Bank limited ('Smartcash'), had received final approval for a full Payment Service Bank ('PSB') licence, affording the Group the opportunity to deliver a full suite of mobile money services into Nigeria. This news followed our announcement of 26 April that the CBN had also awarded our subsidiary, Airtel Mobile Commerce Nigeria Ltd, with a full super-agent licence, allowing the business to create an agency network that can service the customers of licenced Nigerian banks, payment service banks and licenced mobile money operators in Nigeria.

On 19 May 2022, we announced that Smartcash had commenced operations in Nigeria. Services were initially made available at selected retail touchpoints, and operations are now being expanded gradually across the country.

This marks the beginning of our journey to revolutionise the financial services landscape in Nigeria, to help further digitise the Nigerian economy, and to help bank the unbanked by reaching the millions of Nigerians who do not currently have access to financial services by delivering current and savings accounts, payment and remittance services, debit and prepayment cards and more sophisticated services.

DRC spectrum acquisition

On 6 June 2022, we announced the purchase of 58 MHz of additional spectrum in the DRC, spread across 900, 1800, 2100 and 2600 MHz bands, for a gross consideration of $42m. The licence for paired spectrum in the 2100 band comes up for renewal in September 2032. All the other licences continue until July 2036. This additional spectrum will support our 4G expansion in the DRC for both mobile data and fixed wireless home broadband capability, providing significant capacity to accommodate our continued strong data growth in the country. DRC is the largest country by area in our portfolio and our second largest market by population. This investment reflects our continued confidence in the tremendous opportunity inherent in the DRC, supporting the local communities and economies through furthering digital inclusion and connectivity.

Kenya spectrum acquisition

Post period end, on 15 July 2022, we announced that Airtel Kenya Networks Limited ('Airtel Kenya'), had purchased 60 MHz of additional spectrum in the 2600 MHz band from the Communications Authority of Kenya, for a gross consideration of $40m. The licence is valid from July 2022 for a period of 15 years. This additional spectrum will support our 4G expansion in the market for both mobile data and fixed wireless home broadband capability and will allow for future 5G rollout, providing significant capacity to accommodate our continued strong data growth in the country. Airtel Kenya is one of our largest markets by revenue. This investment reflects our continued confidence in the tremendous opportunity inherent in the Kenya market, supporting the local communities and economies through furthering digital inclusion and connectivity.

$450m early bond redemption

Post the period end, on 8 July 2022 the Group announced the settlement of a cash tender offer, redeeming $450m of the $1 billion of 5.35% guaranteed senior notes due 2024 ('Notes'). An aggregate principal amount of $450m of Notes was accepted for purchase for a total of $462.6m. All Notes accepted for purchase were cancelled ahead of their maturity in May 2024. This early redemption was made out of the Group's cash reserves and is in line with our strategy of reduction of external foreign currency debt at Group level.

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 2022

Nigeria - Mobile services

 
 Description                Unit      Quarter ended 
                              of 
                           measure 
-----------------------  ----------  ---------------------------------------- 
                                      Jun-22   Jun-21   Reported    Constant 
                                                         currency    currency 
                                                          change      change 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Summarised statement 
  of operations 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Revenue                     $m        517      445       16.2%       18.3% 
-----------------------  ----------  -------  -------  ----------  ---------- 
  Voice revenue              $m        259      238       8.8%        10.8% 
-----------------------  ----------  -------  -------  ----------  ---------- 
  Data revenue               $m        210      171       22.6%       24.8% 
-----------------------  ----------  -------  -------  ----------  ---------- 
  Other revenue (1)          $m         48       36       34.5%       37.0% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 EBITDA                      $m        264      246       7.3%        9.2% 
-----------------------  ----------  -------  -------  ----------  ---------- 
                                                          (424)       (424) 
  EBITDA margin               %       51.0%    55.3%       bps         bps 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Depreciation and 
  amortisation               $m        (75)     (63)      19.0%       21.2% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Operating exceptional 
  items                      $m         -        -        0.0%        0.0% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Operating profit            $m        189      183       3.3%        5.1% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Capex                       $m         56       49       14.6%       14.6% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Operating free cash 
  flow                       $m        208      197       5.4%        7.9% 
-----------------------              -------  -------  ----------  ---------- 
 Operating KPIs 
-----------------------  ----------  -------  -------  ----------  ---------- 
 ARPU                         $        3.8      3.6       4.9%        6.8% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Total customer base         Mn        46.0     40.9      12.7% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Data customer base          Mn        20.5     17.8      15.6% 
-----------------------              -------  -------  ----------  ---------- 
 

(1) Other revenue includes inter-segment revenue of $0.5m in the quarter ended 30 June 2022. Excluding inter-segment revenue, other revenue was $47.5m in the quarter ended 30 June 2022.

Revenue grew by 16.2% in reported currency to $517m, and by 18.3% in constant currency. The differential in growth rates was due to devaluation of the Nigerian naira by 1.8%. The constant currency revenue growth was driven by both customer base growth of 12.7% and ARPU growth of 6.8%, largely driven by higher data and other revenue.

Voice revenue grew by 10.8% in constant currency, driven by customer base growth of 12.7% while voice ARPU growth was flat. Voice revenue growth was impacted by the barring of outgoing calls for customers who had not submitted their NINs. A total of 13.6 million customers were initially barred out of which 5.3 million (39%) have subsequently submitted their NIN and 2.3 million (17%) have subsequently been verified and unbarred. This has resulted in a loss of approximately. $34m revenue in the quarter and a corresponding impact of 7.5 percentage points on the growth rate.

Data revenue grew by 24.8% in constant currency, driven by data customer base growth of 15.6% and data ARPU growth of 7.1%. Data usage per customer increased by 19.1% to 4.6 GB per month (from 3.8 GB in the prior period). As we continued our 4G network rollout, nearly all our sites in Nigeria (99%) now deliver 4G. For the Q1'23 period, 44.3% of our data customer base were 4G users, contributing to 77.7% of total data usage. 4G data usage per customer reached 7.4 GB per month, an increase of 45.6% (from 5.1 GB per customer per month in Q1'22). Compared to recent quarters, data revenue growth was lower as a result of a slowdown in the growth of data usage per customer, as well as higher churn due to NIN-related call barring.

Other revenues grew by 37.0% in constant currency, with the main contribution coming from the growth in value added services revenue, led by airtime credit services.

EBITDA was $264m, growing by 9.2% in constant currency. The EBITDA margin declined to 51.0% from 55.3% due largely to the increase in operating costs.

Operating free cash flow was $208m, up by 7.9%, due to the expansion of EBITDA, partially offset by higher capex.

East Africa - Mobile services (1)

 
 Description                Unit      Quarter ended 
                              of 
                           measure 
-----------------------  ----------  ---------------------------------------- 
                                      Jun-22   Jun-21   Reported    Constant 
                                                         currency    currency 
                                                          change      change 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Summarised statement 
  of operations 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Revenue                     $m        359      323       11.3%       11.1% 
-----------------------  ----------  -------  -------  ----------  ---------- 
  Voice revenue              $m        203      178       14.2%       14.1% 
-----------------------  ----------  -------  -------  ----------  ---------- 
  Data revenue               $m        123      105       16.6%       15.9% 
-----------------------  ----------  -------  -------  ----------  ---------- 
  Other revenue (2)          $m         33       39      (15.4%)     (14.4%) 
-----------------------  ----------  -------  -------  ----------  ---------- 
 EBITDA                      $m        159      140       13.4%       12.5% 
-----------------------  ----------  -------  -------  ----------  ---------- 
  EBITDA margin               %       44.2%    43.4%     81 bps      56 bps 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Depreciation and 
  amortisation               $m        (60)     (56)      8.3%        8.4% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Operating exceptional 
  items                      $m         -        -        0.0%        0.0% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Operating profit            $m         99       84       17.0%       15.3% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Capex                       $m         44       31       41.4%       41.4% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Operating free cash 
  flow                       $m        115      109       5.4%        4.5% 
-----------------------              -------  -------  ----------  ---------- 
 Operating KPIs 
-----------------------  ----------  -------  -------  ----------  ---------- 
 ARPU                         $        2.1      2.0       4.2%        4.0% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Total customer base         Mn        58.5     55.4      5.6% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Data customer base          Mn        18.5     17.3      6.8% 
-----------------------              -------  -------  ----------  ---------- 
 

(1) The East Africa business region includes Kenya, Malawi, Rwanda, Tanzania, Uganda and Zambia.

(2) Other revenue includes inter-segment revenue of $2.4m in the quarter ended 30 June 2022. Excluding inter-segment revenue, other revenue was $31m in the quarter ended 30 June 2022.

East Africa revenue grew by 11.3% in reported currency to $359m, and by 11.1% in constant currency. The constant currency growth was made up of voice revenue growth of 14.1% and data revenue growth of 15.9% partially offset by decline in other revenues. The reduction in other revenues was due to the loss of c.$6m of tower sharing revenues from tower sales in Malawi and Tanzania. The revenue growth rates in reported currency and constant currency were quite similar due to currency appreciation in Zambia almost offsetting currency devaluations in Malawi, Kenya and Uganda.

Voice revenue grew by 14.1% in constant currency, driven by both customer base growth of 5.6% and voice ARPU growth of 6.9%. The customer base growth was largely driven by expansion of both network coverage and the distribution network. Voice usage per customer increased by 10.8% to 371 minutes per customer per month, driving voice ARPU up by 6.9%.

Data revenue grew by 15.9% in constant currency, largely driven by data customer base growth of 6.8% and data ARPU growth of 4.4%. Our continued investment in network and expansion of 4G network infrastructure helped us to grow both the data customer base and usage levels. 87.0% of our East Africa network sites are now on 4G, compared with 80% in the prior period. In Q1'23, 4G customers accounted for 41.5% of our total data customer base and contributed to 65.4% of total data usage. Total data usage per customer increased to 3.9 GB per customer per month, up by 30%, and 4G data usage per customer increased to 6.2 GB per customer per month from 5.4 GB per customer per month in the prior period. Compared to recent quarters, data revenue growth is slower , as a result of a slowdown in customer additions in Kenya and Malawi and lower ARPU growth in Tanzania and Malawi.

EBITDA increased to $159m, up by 12.5% in constant currency. The EBITDA margin improved to 44.2%, an improvement of 56 basis points in constant currency, as a result of revenue growth and improved operating efficiencies.

Operating free cash flow was $115m, up by 4.5%, due largely to the expansion of EBITDA, partially offset by increased capex.

Francophone Africa - Mobile services (1)

 
 Description                Unit      Quarter ended 
                              of 
                           measure 
-----------------------  ----------  ---------------------------------------- 
                                      Jun-22   Jun-21   Reported    Constant 
                                                         currency    currency 
                                                          change      change 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Summarised statement 
  of operations 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Revenue                     $m        262      253       3.5%        10.6% 
-----------------------  ----------  -------  -------  ----------  ---------- 
  Voice revenue (2)          $m        149      146       1.5%        8.8% 
-----------------------  ----------  -------  -------  ----------  ---------- 
  Data revenue               $m         85       80       6.7%        14.2% 
-----------------------  ----------  -------  -------  ----------  ---------- 
  Other revenue              $m         28       26       4.9%        9.5% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 EBITDA                      $m        103       95       8.5%        14.8% 
-----------------------  ----------  -------  -------  ----------  ---------- 
  EBITDA margin               %       39.2%    37.4%     180 bps     144 bps 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Depreciation and 
  amortisation               $m        (47)     (52)     (10.0%)     (3.5%) 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Operating exceptional 
  items                      $m         -        -        0.0%        0.0% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Operating profit            $m         56       43       30.7%       36.8% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Capex                       $m         27       20       35.9%       35.9% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Operating free cash 
  flow                       $m         76       75       1.3%        9.2% 
-----------------------              -------  -------  ----------  ---------- 
 Operating KPIs 
-----------------------  ----------  -------  -------  ----------  ---------- 
 ARPU                         $        3.2      3.5      (8.2%)      (1.9%) 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Total customer base         Mn        27.0     24.5      10.1% 
-----------------------  ----------  -------  -------  ----------  ---------- 
 Data customer base          Mn        7.5      7.4       2.0% 
-----------------------              -------  -------  ----------  ---------- 
 

(1) The Francophone Africa business region includes Chad, Democratic Republic of the Congo, Gabon, Madagascar, Niger, Republic of the Congo, and Seychelles.

(2) Voice revenue includes inter-segment revenue of $1m in the quarter ended 30 June 2022. Excluding inter-segment revenue, voice revenue was $148m in the quarter ended 30 June 2022.

Revenue grew by 3.5% in reported currency and by 10.6% in constant currency. The difference in growth rates was due to devaluation of the Central African franc (13.2%). The revenue growth in constant currency terms was largely driven by DRC, Niger, Chad and Gabon.

Voice revenue grew by 8.8% in constant currency, driven by customer base growth of 10.1% partially offset by voice ARPU decline of 3.5%. The customer base growth was driven by expansion of both network coverage and distribution infrastructure.

Data revenue grew by 14.2% in constant currency, supported by average customer base growth of 15.3%. Our continued 4G network rollout resulted in an increase in total data usage of 45.2% and a per customer data usage increase of 25.9%. For Q1'23, 4G data users constituted 49.7% of total data users, compared with 40.0% in the prior period. 4G users contributed 67.9% of total data usage this quarter. Data usage per customer increased to 2.9 GB per month (up from 2.3 GB in the prior period), while 4G data usage per customer reached 5.0 GB per month, from 4.5 GB in the prior period. Compared to recent quarters, data revenue growth has slowed as a result of lower ARPU in Chad and Niger.

EBITDA, at $103m, increased by 14.8% in constant currency. The EBITDA margin improved to 39.2%, an improvement of 144 basis points in constant currency. This EBITDA growth was driven by continued revenue growth and increased operating efficiencies.

Operating free cash flow was $76m, up by 9.2%, due to the expansion in EBITDA, partially offset by higher capex.

Mobile services

 
 Description                        Unit       Quarter ended 
                                 of measure 
-----------------------------  -------------  ---------------------------------------- 
                                               Jun-22   Jun-21   Reported    Constant 
                                                                  currency    currency 
                                                                   change      change 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Summarised statement 
  of operations 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Revenue (1)                         $m        1,135    1,018      11.6%       14.2% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
  Voice Revenue                      $m         610      562       8.6%        11.3% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
  Data Revenue                       $m         418      356       17.3%       19.8% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
  Other Revenue                      $m         107       99       8.2%        10.6% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 EBITDA                              $m         526      481       9.4%        11.3% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
                                                                               (119) 
  EBITDA Margin                      %         46.3%    47.2%    (93) bps       bps 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Depreciation & Amortization         $m        (182)    (171)      6.7%        9.6% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Operating Exceptional 
  Items                              $m          -        -        0.0%        0.0% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Operating Profit                    $m         344      310       10.9%       12.3% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Capex                               $m         127      100       27.0%       27.0% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Operating Free Cash 
  Flow                               $m         399      381       4.7%        7.2% 
-----------------------------                 -------  -------  ----------  ---------- 
 Operating KPIs 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Mobile voice 
-----------------------------  -------------  -------  -------  ----------  ---------- 
  Customer base                      Mn        131.6    120.8      8.9% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
  Voice ARPU                         $          1.6      1.6      (0.7%)       1.8% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Mobile data 
-----------------------------  -------------  -------  -------  ----------  ---------- 
  Data customer base                 Mn         46.5     42.4      9.7% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
  Data ARPU                          $          2.9      2.9       2.8%        5.0% 
-----------------------------                 -------  -------  ----------  ---------- 
 

(1) Mobile service revenue after inter-segment eliminations was $1,134m in the quarter ended 30 June 2022 and $1,016m in the prior period.

Revenue from mobile services grew by 11.6% in reported currency, and in constant currency grew by 14.2%. The constant currency growth was evident in all regions and key services. Mobile services revenue grew in Nigeria by 18.3%, in East Africa by 11.1% and in Francophone Africa by 10.6%.

Voice revenue grew by 11.3% in constant currency, supported by both customer base growth of 8.9% and voice ARPU growth of 1.8%. Customer base growth was driven by the expansion of our network and distribution infrastructure. The slowdown in voice revenue growth this quarter was due to the barring of outgoing calls for those customers in Nigeria who had not submitted their NINs. A total of 13.6 million customers were initially barred out of which 5.3 million (39%) have subsequently submitted their NIN and 2.3 million (17%) have subsequently been verified and unbarred. The voice ARPU growth of 1.8% was driven by an increase in voice usage per customer of 6.0%, reaching 264 minutes per customer per month, with total minutes on the network increasing by 15.9%.

Data revenue grew by 19.8% in constant currency, driven by both customer base growth of 9.7% and data ARPU growth of 5.0%. The customer base growth was recorded across all the regions supported by the expansion of our 4G network. 88.4% of our total sites are now on 4G, compared with 79.4% in the prior period. 44.1% of total data customers are 4G users (up from 37.9%) contributing to 71.9% of total data usage. Data usage per customer increased to 4.0 GB per customer per month (from 3.2 GB in the prior period) while 4G data usage per customer reached 6.6 GB per month (from 5.1 GB in the prior period). In the quarter, data revenue contributed to 36.8% of total mobile services revenue, up from 35.0% in the prior period. Compared to recent quarters, data revenue growth was slower largely the result of a slowdown in the growth of data usage per customer as well as higher churn due to NIN-related call barring in Nigeria and lower ARPU growth in certain markets.

EBITDA was $526m, growing by 11.3% in constant currency. The EBITDA margin declined by 93 basis points to 46.3% (declined by 119 basis points in constant currency). The reduction in EBITDA margin was due to an increase in operating cost.

Operating free cash flow was $399m, up by 7.2%, due to the expansion of EBITDA partially offset by higher capex.

Mobile money

 
 Description                        Unit       Quarter ended 
                                 of measure 
-----------------------------  -------------  ---------------------------------------- 
                                               Jun-22   Jun-21   Reported    Constant 
                                                                  currency    currency 
                                                                   change      change 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Summarised statement 
  of operations 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Revenue (1)                         $m         159      124       28.6%       26.5% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
  Nigeria (2)                        $m          0        0          -           - 
-----------------------------  -------------  -------  -------  ----------  ---------- 
  East Africa                        $m         121       91       32.8%       26.9% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
  Francophone Africa                 $m          38       33       16.9%       25.4% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 EBITDA                              $m          79       60       30.5%       28.3% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
  EBITDA Margin                      %         49.5%    48.8%     70 bps      67 bps 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Depreciation & Amortization         $m         (4)      (3)       27.7%       28.5% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Operating Profit                    $m          75       57       30.9%       28.3% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Capex                               $m          9        3       173.3%      173.3% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
 Operating Free Cash 
  Flow                               $m          70       57       22.0%       20.1% 
-----------------------------                 -------  -------  ----------  ---------- 
 Operating KPIs 
-----------------------------  -------------  -------  -------  ----------  ---------- 
     Transaction value               $m        18,886   14,651     28.9%       26.1% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
  Active customers                   Mn         27.6     23.1      19.7% 
-----------------------------  -------------  -------  -------  ----------  ---------- 
  Mobile money ARPU                  $          2.0      1.8       7.7%        5.9% 
-----------------------------                 -------  -------  ----------  ---------- 
 

(1) Mobile money service revenue post inter-segment eliminations with mobile services was $123m in the quarter ended 30 June 2022 and $96m in the prior period.

(2) On 19 May 2022, we announced that Smartcash had commenced operations in Nigeria. Services were initially made available at selected retail touchpoints, and operations are now being expanded gradually across the country.

Mobile money revenue grew by 28.6% in reported currency, with constant currency growth of 26.5%. The reported currency growth was higher than constant currency due to appreciation in the Zambian kwacha. The slowdown in mobile money revenue growth since July 2021 has been largely due to the implementation of levies by the Government of Tanzania on mobile money withdrawal and P2P transactions (subsequently revised on several occasions). Excluding Tanzania, mobile money revenue grew by 34.2%. The constant currency mobile money revenue growth was driven by revenue growth in both East Africa and Francophone Africa, of 26.9% and 25.4% respectively. In Nigeria, mobile money services (Smartcash) launched in June 2022.

The constant currency revenue growth of 26.5% was driven by both customer base growth of 19.7% and mobile money ARPU growth of 5.9%, with the growth largely coming from Zambia, Uganda, Malawi and DRC. The expansion of our distribution network, particularly our exclusive channels of Airtel Money branches and kiosks, supported customer base growth of 19.7% in both East Africa and Francophone Africa. The mobile money ARPU growth of 5.9% was driven by an increase in the transaction value per customer of 5.6% to $234 per customer per month.

Q1'23 annualised transaction value reached $75.7bn in constant currency, with mobile money revenue contributing 12.7% of total Group revenue in the quarter.

The mobile money customer base increased to 27.6 million, up by 19.7%. Mobile money customer base penetration reached 21.0%, an increase of 1.9 percentage points. Mobile money ARPU growth of 5.9% was largely driven by an increase in transaction values and higher contributions from cash transactions, merchant payments and mobile service recharges through Airtel Money.

EBITDA was $79m, up by 28.3% in constant currency. The EBITDA margin reached 49.5%, an improvement of 67 basis points in constant currency.

Regional Performance

Nigeria

 
 Description                  Unit       Quarter ended 
                           of measure 
-----------------------  -------------  ---------------------------------------- 
                                         Jun-22   Jun-21   Reported    Constant 
                                                            currency    currency 
                                                             change      change 
-----------------------  -------------  -------  -------  ----------  ---------- 
 Revenue                       $m         517      445       16.2%       18.3% 
-----------------------  -------------  -------  -------  ----------  ---------- 
  Voice Revenue                $m         259      238       8.8%        10.8% 
-----------------------  -------------  -------  -------  ----------  ---------- 
  Data Revenue                 $m         210      171       22.6%       24.8% 
-----------------------  -------------  -------  -------  ----------  ---------- 
  Mobile Money Revenue         $m          0        0          -           - 
-----------------------  -------------  -------  -------  ----------  ---------- 
  Other Revenue                $m          48       36       34.5%       37.0% 
-----------------------  -------------  -------  -------  ----------  ---------- 
 EBITDA                        $m         263      246       6.9%        8.9% 
-----------------------  -------------  -------  -------  ----------  ---------- 
                                                                         (441) 
  EBITDA Margin                %         50.8%    55.2%    (441) bps      bps 
-----------------------  -------------  -------  -------  ----------  ---------- 
 Operating KPIs 
-----------------------  -------------  -------  -------  ----------  ---------- 
 ARPU                          $          3.8      3.6       4.9%        6.8% 
-----------------------                 -------  -------  ----------  ---------- 
 

East Africa

 
 Description                  Unit       Quarter ended 
                           of measure 
-----------------------  -------------  ---------------------------------------- 
                                         Jun-22   Jun-21   Reported    Constant 
                                                            currency    currency 
                                                             change      change 
-----------------------  -------------  -------  -------  ----------  ---------- 
 Revenue                       $m         455      394       15.3%       14.1% 
-----------------------  -------------  -------  -------  ----------  ---------- 
  Voice Revenue                $m         203      178       14.2%       14.1% 
-----------------------  -------------  -------  -------  ----------  ---------- 
  Data Revenue                 $m         123      105       16.6%       15.9% 
-----------------------  -------------  -------  -------  ----------  ---------- 
  Mobile Money Revenue         $m         121       91       32.8%       26.9% 
-----------------------  -------------  -------  -------  ----------  ---------- 
  Other Revenue                $m          32       38      (16.2%)     (15.2%) 
-----------------------  -------------  -------  -------  ----------  ---------- 
 EBITDA                        $m         221      184       19.9%       17.9% 
-----------------------  -------------  -------  -------  ----------  ---------- 
                                                                          157 
  EBITDA Margin                %         48.5%    46.6%     187 bps       bps 
-----------------------  -------------  -------  -------  ----------  ---------- 
 Operating KPIs 
-----------------------  -------------  -------  -------  ----------  ---------- 
 ARPU                          $          2.6      2.4       8.0%        6.8% 
-----------------------                 -------  -------  ----------  ---------- 
 

Francophone Africa

 
 Description                  Unit       Quarter ended 
                           of measure 
-----------------------  -------------  ---------------------------------------- 
                                         Jun-22   Jun-21   Reported    Constant 
                                                            currency    currency 
                                                             change      change 
-----------------------  -------------  -------  -------  ----------  ---------- 
 Revenue                       $m         288      276       4.6%        11.7% 
-----------------------  -------------  -------  -------  ----------  ---------- 
  Voice Revenue                $m         148      146       1.4%        8.8% 
-----------------------  -------------  -------  -------  ----------  ---------- 
  Data Revenue                 $m          85       80       6.8%        14.3% 
-----------------------  -------------  -------  -------  ----------  ---------- 
  Mobile Money Revenue         $m          38       33       16.9%       25.4% 
-----------------------  -------------  -------  -------  ----------  ---------- 
  Other Revenue                $m          28       26       4.6%        9.2% 
-----------------------  -------------  -------  -------  ----------  ---------- 
 EBITDA                        $m         122      111       10.0%       16.5% 
-----------------------  -------------  -------  -------  ----------  ---------- 
                                                                          172 
  EBITDA Margin                %         42.4%    40.3%     210 bps       bps 
-----------------------  -------------  -------  -------  ----------  ---------- 
 Operating KPIs 
-----------------------  -------------  -------  -------  ----------  ---------- 
 ARPU                          $          3.6      3.9      (7.3%)      (0.9%) 
-----------------------                 -------  -------  ----------  ---------- 
 

Consolidated performance

 
  Description    UoM                   Quarter ended- June 2022                                 Quarter ended- June 2021 
--------------  -----  -------------------------------------------------------  ------------------------------------------------------- 
                         Mobile    Mobile   Unallocated   Eliminations   Total    Mobile    Mobile   Unallocated   Eliminations   Total 
                        services    money                                        services    money 
--------------  -----  ---------  -------  ------------  -------------  ------  ---------  -------  ------------  -------------  ------ 
 Revenue          $m     1,135      159         (0)           (37)       1,257    1,018      124         (0)           (30)       1,112 
--------------  -----  ---------  -------  ------------  -------------  ------  ---------  -------  ------------  -------------  ------ 
  Voice 
   revenue        $m      610                   (0)           (0)         610      562                   (0)           (0)         562 
--------------  -----  ---------  -------  ------------  -------------  ------  ---------  -------  ------------  -------------  ------ 
  Data revenue    $m      418                    -             -          418      356                    -            (0)         356 
--------------  -----  ---------  -------  ------------  -------------  ------  ---------  -------  ------------  -------------  ------ 
  Other 
   revenue        $m      107                    -            (1)         106       99                    -            (1)         98 
--------------  -----  ---------  -------  ------------  -------------  ------  ---------  -------  ------------  -------------  ------ 
 EBITDA           $m      526        79          9             0          614      481        60         (7)           (0)         534 
--------------  -----  ---------  -------  ------------  -------------  ------  ---------  -------  ------------  -------------  ------ 
  EBITDA 
   margin         %      46.3%     49.5%                                 48.8%    47.2%     48.8%                                 48.0% 
--------------  -----  ---------  -------  ------------  -------------  ------  ---------  -------  ------------  -------------  ------ 
 Depreciation 
  and 
  amortization    $m     (182)      (4)         (3)            -         (189)    (171)      (3)         (8)            -         (182) 
--------------  -----  ---------  -------  ------------  -------------  ------  ---------  -------  ------------  -------------  ------ 
 Operating        $m       -         -                         -           -        -         -                         -           - 
  exceptional 
  items 
--------------  -----  ---------  -------  ------------  -------------  ------  ---------  -------  ------------  -------------  ------ 
 Operating 
  profit          $m      344        75          6             0          425      310        57        (15)           (0)         352 
--------------         ---------  -------  ------------  -------------  ------  ---------  -------  ------------  -------------  ------ 
 

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 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 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         Adjustments to reconcile to IFRS measure                       Definition and purpose 
                 equivalent 
                 IFRS measure 
                                                                                              -------------------------- 
 EBITDA and      Operating                                                                     The Group defines EBITDA 
 margin          profit            *    Depreciation and amortisation                          as operating 
                                                                                               profit/(loss) for the 
                                                                                               period before 
                                   *    Exceptional items                                      depreciation and 
                                                                                               amortisation and adjusted 
                                                                                               for exceptional items. 
                                                                                               The Group defines EBITDA 
                                                                                               margin as EBITDA divided 
                                                                                               by revenue. 
                                                                                               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. 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, 
                                                                                               EBITDA and margin are 
                                                                                               APMs. 
                                                                                               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 
                                                                                               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 
                                                                                               EBITDA and margin. 
--------------  --------------  ------------------------------------------------------------  -------------------------- 
 Underlying      Profit /                                                                      The Group defines 
 profit /        (loss) before     *    Exceptional items                                      underlying profit/(loss) 
 (loss) before   tax                                                                           before tax as 
 tax                                                                                           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 charge 
                                  *    Foreign exchange rate movements                         divided by 
                                                                                               reported profit before 
                                                                                               tax) adjusted for 
                                  *    One-off tax impact of prior period, tax litigation      exceptional items, 
                                       settlement and impact of tax on permanent differences   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 tax items or 
                                                                                               any tax arising on 
                                                                                               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 a 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           *    Exceptional items                                      underlying profit/(loss) 
 after tax       period                                                                        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 before 
 exceptional                                                                                   exceptional items as 
 items                                                                                         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       Cash                                                                          The Group defines 
 free cash       generated         *    Income tax paid                                        operating free cash flow 
 flow            from                                                                          as net cash generated 
                 operating                                                                     from operating activities 
                 activities        *    Changes in working capital                             before income tax paid, 
                                                                                               changes in working 
                                                                                               capital, other non-cash 
                                   *    Other non-cash items                                   items, non-operating 
                                                                                               income 
                                                                                               and exceptional items, 
                                   *    Non-operating income                                   less capital 
                                                                                               expenditures. The Group 
                                                                                               views operating free cash 
                                   *    Exceptional items                                      flow 
                                                                                               as a key liquidity 
                                                                                               measure, as it indicates 
                                   *    Capital expenditures                                   the cash available to pay 
                                                                                               dividends, repay debt 
                                                                                               or make further 
                                                                                               investments in the Group. 
--------------  --------------  ------------------------------------------------------------  -------------------------- 
 Net debt and    Borrowings                                                                    The Group defines net 
 leverage                           *    Lease liabilities                                     debt as borrowings 
 ratio                                                                                         including lease 
                                                                                               liabilities less cash and 
                                    *    Cash and cash equivalent                              cash equivalents, 
                                                                                               term deposits with banks, 
                                                                                               deposits given against 
                                    *    Term deposits with banks                              borrowings/non-derivative 
                                                                                               financial instruments, 
                                                                                               processing costs related 
                                    *    Deposits given against borrowings/ non-derivative     to borrowings and fair 
                                         financial instruments                                 value hedge adjustments. 
                                                                                               The Group defines 
                                                                                               leverage ratio as net 
                                    *    Fair value hedges                                     debt divided by EBITDA 
                                                                                               for the preceding 12 
                                                                                               months. 
                                                                                               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                                                                     The Group defines return 
 capital         equivalent        *    Exceptional items to arrive at EBIT                    on capital employed 
 employed                                                                                      ('ROCE') as EBIT divided 
                                                                                               by average capital 
                                                                                               employed. 
                                                                                               The directors view ROCE 
                                                                                               as a financial ratio that 
                                                                                               measures the Group's 
                                                                                               profitability and the 
                                                                                               efficiency with which its 
                                                                                               capital is being 
                                                                                               utilised. 
                                                                                               The Group defines 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 
                                                                                               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 
                                                                                               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 the 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 2022. Reported currency percentage change is derived on the basis of the 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

-- Underlying revenue: The underlying revenue has not been defined as an APM due to the absence of any exceptional items during the period.

Glossary

Technical and Industry Terms

 
4G data customer                                             A customer having a 4G handset and who has used at least 
                                                             1 MB 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 per month. 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. 
----------------------------------------------------------  ---------------------------------------------------------- 
Airtime credit service                                       A value-added service where the customer can take an 
                                                             airtime credit and continue to use our 
                                                             voice and data services, with the credit recovered 
                                                             through subsequent customer recharge. This 
                                                             is classified as a Mobile Services product (not a Mobile 
                                                             Money product). 
----------------------------------------------------------  ---------------------------------------------------------- 
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. 
----------------------------------------------------------  ---------------------------------------------------------- 
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 represents 
                                                             the performance of the business. Constant currency growth 
                                                             rates for prior periods are calculated 
                                                             using closing exchange rates as at the end of prior 
                                                             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 average revenue per user per month. 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 1 MB 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 per month                            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. 
----------------------------------------------------------  ---------------------------------------------------------- 
Digitalisation                                               We use the term digitalisation in its broadest sense to 
                                                             encompass both digitisation actions 
                                                             and processes that convert analogue information into a 
                                                             digital form and thereby bring customers 
                                                             into the digital environment, and the broader 
                                                             digitalisation processes of controlling, connecting 
                                                             and planning processes digitally; the processes that 
                                                             effect digital transformation of our 
                                                             business, and of industry, economics and society as a 
                                                             whole through bringing about new business 
                                                             models, socio-economic structures and organisational 
                                                             patterns. 
----------------------------------------------------------  ---------------------------------------------------------- 
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. 
----------------------------------------------------------  ---------------------------------------------------------- 
Indefeasible Rights of Use (IRU)                             A standard long-term leasehold contractual agreement that 
                                                             confers upon the holder the exclusive 
                                                             right to use a portion of the capacity of a fibre route 
                                                             for a stated period. 
----------------------------------------------------------  ---------------------------------------------------------- 
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 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 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 EBITDA (LTM)                                     An alternative performance measure (non-GAAP) Calculated 
                                                             by dividing net debt as at the end 
                                                             of the relevant period by 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 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. 
----------------------------------------------------------  ---------------------------------------------------------- 
EBIT                                                         Defined as operating profit/(loss) for the period 
                                                             adjusted for exceptional items. 
----------------------------------------------------------  ---------------------------------------------------------- 
EBITDA                                                       An alternative performance measure (non-GAAP). Defined as 
                                                             operating profit before depreciation, 
                                                             amortisation and exceptional items. 
----------------------------------------------------------  ---------------------------------------------------------- 
EBITDA margin                                                An alternative performance measure (non-GAAP). Calculated 
                                                             by dividing EBITDA for the relevant 
                                                             period by revenue for the relevant period. 
----------------------------------------------------------  ---------------------------------------------------------- 
Revenue                                                      An alternative performance measure (non-GAAP). Defined as 
                                                             revenue before exceptional items. 
----------------------------------------------------------  ---------------------------------------------------------- 
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 
---------------  ------------------------------------------------ 
Unit of measure   Unit of measure 
---------------  ------------------------------------------------ 
USSD              Unstructured supplementary service data 
---------------  ------------------------------------------------ 
 

Risk Factors

The Group's business and the industry in which it operates, together with all other information contained in this document, including, in particular, the risk factors summarised below. Additional risks and uncertainties relating to the Group that are not currently known to the Group, or that the Group currently deem immaterial, may individually or cumulatively also have a material adverse effect on the Group's business, results of operations and financial condition.

Principal risks summarised

1. We operate in a competitive environment with the potential for aggressive competition by existing players, or the entry of new players, which could both put a downward pressure on prices, adversely affecting our revenue and profitability.

2. Failure to innovate through simplifying the customer experience, developing adequate digital touchpoints in line with changing customer needs and competitive landscape could lead to loss of customers and market share.

3. An inability to invest and upgrade our network and IT infrastructure could affect our ability to compete effectively in the market.

4. Cybersecurity threats through internal or external sabotage or system vulnerabilities could potentially result in customer data breaches and/or service downtimes.

5. Adverse changes in our external business environment and macro-economic conditions such as supply chain disruptions and inflationary pressures could lead to a significant increase in our operating cost structure and negatively impact profitability.

6. Shortages of skilled telecommunications professionals in some markets and the inability to identify and develop successors for key leadership positions could both lead to disruptions in the execution of our corporate strategy.

7. Our internal control environment is subject to the risk that controls may become inadequate due to changes in internal or external conditions, new accounting requirements, delays, or inaccuracies in reporting.

8. Our telecommunications networks are subject to the risks of technical failures, aging infrastructure, human error, wilful acts of destruction or natural disasters.

9. Our multinational footprint means we are exposed to the risks of currency fluctuations including the availability of funds for repatriation to the Group company triggered by adverse macroeconomic conditions in the markets where we operate.

10. We operate in a diverse and dynamic legal, tax and regulatory environment. A failure to comply with relevant laws and regulations could lead to penalties, sanctions, and reputational damage.

[1] Alternative performance measures (APM) are described on page 15.

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

QRFRRMTTMTTTTTT

(END) Dow Jones Newswires

July 28, 2022 02:00 ET (06:00 GMT)

1 Year Airtel Africa Chart

1 Year Airtel Africa Chart

1 Month Airtel Africa Chart

1 Month Airtel Africa Chart
ADVFN Advertorial
Your Recent History
LSE
AAF
Airtel Afr..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

Log in to ADVFN
Register Now

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20220925 20:53:13