EditorThe financial year ending March 31, 2023 gave Airtel Africa Plc double-digit revenue growth and resilient margin, with its revenue in constant currency growing by as much as 17.6%, and 11.5% to $5.255 million in reported currency.
Airtel Africa is a leading provider of telecommunications and mobile money services, with presence in 14 African countries – primarily in East Africa and Central and West Africa.
The Board of Airtel Africa recommends a final dividend of 3.27 cents per share, making the total dividend for Full Year (FY’23) to 5.45 cents per share, an increase of 9% in line with its progressive dividend policy.
Prime Business Africa (PBA) understands that the telecoms company’s overall revenue growth was driven by substantial increase in customer base and increase in use of voice, data and mobile money.
Specifically, Mobile Money transaction value increased by 41.3%, with Q4’23 annualised transaction value exceeding $102bn in constant currency.
Operating key performance indicators (KPIs) all came positive. Just as total customer base grew by 9.0% to 140.0 million, the penetration of mobile data and mobile money services continued to rise, driving a 16.9% increase in data customers to 54.6 million and a 20.4% increase in mobile money customers to 31.5 million.
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Constant currency ARPU growth of 7.4% was largely driven by increased usage across voice, data and mobile money, according to the official data released by Airtel Africa Group.
Financial performance
While each segment’s reported currency revenue growth was impacted by currency devaluation, they all delivered double-digit constant currency revenue growth. Across the Group, mobile service revenue grew by 16.2% in constant currency, driven by voice revenue growth of 11.8% and data revenue growth of 23.8%. Mobile money revenue grew by 29.6% in constant currency.
Underlying EBITDA increased by 17.3% in constant currency, and 11.4% in reported currency to $2,575m, with an underlying EBITDA margin of 49.0%, reflecting the resilience of our operating model despite inflationary cost pressures.
Profit after tax was $750m, a decrease of only $5m, after including a higher foreign exchange and derivative losses of $245m.
Basic EPS at 17.7 cents was up by 5.2% due to higher operating profits and exceptional items gain on deferred tax credit recognition in Kenya, the DRC and Tanzania partially offset by higher foreign exchange and derivative losses. EPS before exceptional items was 13.6 cents, a reduction of 15.0%, largely due to higher foreign exchange and derivative losses of $245m. EPS before exceptional items and excluding foreign exchange and derivative losses was 20.6 cents, up by 13.4%.
Capital allocation
Airtel Africa’s capital expenditure (Capex), however, grew on the back of additional spectrum acquisitions in Nigeria, Zambia, Tanzania, Kenya and DRC, during the period under review. Capex, therefore, increased by 14.0% to $748m, in line with its guidance, as the company continues to invest for future growth.
In July 2022 specifically, the Group prepaid $450m of outstanding external debt at HoldCo, slashing the remaining debt at HoldCo to $550 million, falling due in May 2024. Cash at the holding companies was $398m. Leverage was at 1.4x in March 2023, broadly stable despite $500m of spectrum investment during the year.
Sustainability Strategy
Recall that Airtel Africa’s inaugural Sustainability Report was published in October 2022, reflecting commitment to sustainability and detailing progress against the long-term goals.
The telecom company also launched a UNICEF partnership across 6 of its markets providing educational resources, free of charge, to more than 250,000 children this year on its way to reaching one million children by 2027.
The Group’s ambition to achieve net zero by 2050 has progressed. It published its Scope 1, 2 and 3 baseline GHG footprint in October 2022 and in May 2023 announced detailed plans to achieve over 60% reduction in Scope 1 and 2 emissions intensity by 2032.
“I am pleased with this year’s performance and wish to thank all our customers, business partners, governments and regulators for their support and our employees for their consistent contribution to the business’ success,” said Olusegun Ogunsanya, the chief executive officer of Airtel Africa.
Ogunsanya noted that the macro-economic outlook remains volatile, “but we are well positioned to deliver against the growth opportunities these markets offer, with a continued focus on margin resilience.”
On the trading update, the chief executive officer of Airtel Africa said:
“Over the last year, the operating environment has been challenging in many ways, yet our strategic focus on providing reliable, affordable and accessible services across our markets has enabled us to sustain our top-line growth momentum.
“The resilience of our underlying EBITDA margins has shown the effectiveness of our operating model, despite significant inflationary and foreign exchange pressures. Strong customer and ARPU growth over the year demonstrates that demand for our services remains very strong and gives us the confidence to continue investing to support our future growth potential. Over the year, we invested $500m on additional spectrum, including 5G, across many of our OpCos which, combined with our capex, will underpin our growth ambitions. Despite this investment, and driven by a disciplined capital allocation policy, our balance sheet remains strong and has been further de-risked over the last year by the prepayment of $450m HoldCo debt in July last year. Currencies across our footprint have been under pressure, and the impact from the revaluation of our foreign currency denominated liabilities provided some headwinds in the last financial year. While currency devaluation is not in our control, we have plans to continue to mitigate its impact by growing our revenues at a faster pace than devaluation, with double-digit revenue growth in reported currency delivered this year and as we continue to reduce our foreign currency exposure across our balance sheet.
Our six-pillar strategy continues to provide the basis for stakeholder value creation by facilitating continued expansion of our services to enhance both digital and financial inclusion across Africa. This strategy will continue and will be underpinned by our sustainability strategy as articulated in our Sustainability Report published in October 2022.”
Airtel Nigeria Set To Capitalise on 5G Technology
Carl Cruz, Airtel Nigeria CEO, on his part, said the results of the year ended March 2023, placed Airtel Africa in an optimistic footing. According to him:
“Nigeria, being one of the most vibrant countries in the Group’s operations, is in a vantage position to capitalise on 5G technology, an energetic subscriber base, and the growing adoption of mobile money services, while we continue to promote the Group’s sustainability commitments.”
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