REG - Airtel Africa PLC - Final Results
09/05/2024 07:00
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RNS Number : 7656N Airtel Africa PLC 09 May 2024
Airtel Africa plc
Results for year ended 31 March 2024
09 May 2024
Delivering a resilient performance with strong underlying momentum, despite a
volatile macro-economic environment
Operating highlights
· Total customer base grew by 9.0% to 152.7 million. We continue to
bridge the digital divide with a 17.8% increase in data customers to 64.4
million and a 20.8% increase in data usage per customer.
· Mobile money subscriber growth of 20.7% reflects our continued
investment into distribution to drive increased financial inclusion across our
markets. Transaction value increase of 38.2% in constant currency with annual
transaction value of over $112bn in reported currency. Increased transactions
across the ecosystem reflects the enhanced range of offerings and increased
customer adoption, supporting constant currency ARPU growth of 8.6%.
· Continued network investment to support an enhanced customer
experience and drive increased 4G coverage. 95% of sites now 4G operational,
facilitating a 42.3% increase in 4G customers over the year.
Financial performance
· Revenue in constant currency grew by 20.9% with growth accelerating
to 23.1% in Q4'24. Nigerian constant currency revenue growth accelerated to
34.2% in Q4'24 despite the challenging backdrop. Reported currency revenues
declined by 5.3% to $4,979m reflecting the impact of currency devaluation,
particularly in Nigeria.
· Across the group mobile services revenue grew by 19.4% in constant
currency, driven by voice revenue growth of 11.9% and data revenue growth of
29.2%. Mobile Money revenue grew by 32.8% in constant currency, with a
continued strong performance in East Africa.
· EBITDA margins remained resilient at 48.8% despite the currency
headwinds and inflationary pressure on our cost base. Constant currency EBITDA
increased 21.3% with reported currency EBITDA declining 5.7% to $2,428m. Q4'24
EBITDA margins of 46.5% were impacted by the lower contribution of Nigeria
following the Q4'24 naira devaluation and rising energy costs across a number
of markets.
· Loss after tax was $89m, primarily impacted by significant foreign
exchange headwinds, resulting in a $549m exceptional loss net of tax following
the Nigerian naira devaluation in June 2023 and Q4'24, and the Malawian kwacha
devaluation in November 2023.
· Basic EPS of negative (4.4 cents) compares to 17.7 cents last year.
EPS before exceptional items was 10.1 cents, a decline of 25.9%. Both EPS
before exceptional items and basic EPS were primarily impacted by significant
derivative and foreign exchange losses during the year. EPS before exceptional
items and derivative and foreign exchange losses was 18.3 cents compared to
20.5 cents in the prior period.
Capital allocation
· Capex was broadly flat at $737m and was below our guidance largely
due to a deferral in data centre investments. In addition, we invested $152m
in licence renewal and spectrum acquisitions, including $127m for the Nigerian
3G licence renewal.
· Leverage of 1.4x on 31 March 2024 was flat from the previous year. We
have around $680m of cash available at HoldCo, to be utilized to fully repay
the remaining $550m debt, falling due in May 2024.
· The Board has approved a share buyback programme of up to $100m, over
a period of up to 12 months. On 1 March 2024, we announced the commencement of
the first tranche of this buyback up to a maximum of $50m. During March 2024,
the company purchased 7.4 million shares for a total consideration of $9m.
· The Board has recommended a final dividend of 3.57 cents per share,
making the total dividend for FY24 5.95 cents per share.
Sustainability strategy
· Our landmark five-year $57m partnership with UNICEF launched across
13 markets providing access to educational resources, free of charge, on our
way to transforming the lives of over one million children through digital
learning by 2027.
· Partnered with the Government of Rwanda to launch the ConnectRwanda
2.0 initiative which aims to provide more than a million people with
affordable smartphones to bridge the digital divide.
Olusegun Ogunsanya, Chief executive officer, on the trading update:
"The consistent deployment of our 'Win with' strategy supported the
acceleration in constant currency revenue growth over the recent quarters
which has reduced the impact of currency headwinds faced across most of our
markets. This strong revenue performance is a reflection not only of the
opportunity that is inherent across our markets, but also the resilience of
our affordable offerings despite the inflationary pressure many of our
customers have experienced.
Facilitating this growth has been, and will remain, fundamental to our
performance. The investment in our distribution to catalyse growth, and the
technology required to support this growth has been key. Furthermore, our
rigorous approach to de-risking our balance sheet and our capital allocation
priorities has materially reduced the risks that the currency devaluation has
had on our business. Key initiatives include the reduction of US dollar debt
across the business and the accumulation of cash at the HoldCo level to fully
cover the outstanding debt due. We will continue to focus on reducing our
exposure to currency volatility. At the beginning of March, we launched our
first buyback programme reflecting the strength of our financial position.
The growth opportunity that exists across our markets remains compelling, and
we are well positioned to deliver against this opportunity. We will continue
to focus on margin improvement from the recent level as we progress through
the year.
I want to say a particular thank-you to our customers, partners, governments
and regulators for their support and our employees for their unrelenting
contribution to the business. Our purpose of transforming lives across Africa
will continue to be our highest priority.
GAAP measures
(Year ended)
Description Mar-24 Mar-23 Reported
currency
$m $m change
Revenue 4,979 5,255 (5.3%)
Operating profit 1,640 1,757 (6.7%)
(Loss)/Profit after tax (89) 750 (111.9%)
Basic EPS ($ cents) (4.4) 17.7 (124.9%)
Net cash generated from operating activities 2,259 2,229 1.4%
Alternative performance measures (APM) (1)
(Year ended)
Description Mar-24 Mar-23 Reported Constant
currency
currency
$m $m change change
Revenue 4,979 5,255 (5.3%) 20.9%
EBITDA 2,428 2,575 (5.7%) 21.3%
EBITDA margin 48.8% 49.0% (22) bps 14 bps
EPS before exceptional items ($ cents) 10.1 13.6 (25.9%)
Operating free cash flow 1,691 1,827 (7.4%)
(()(1)) Alternative performance measures (APM) are described on page 50, with
a reconciliation on page 53.
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
Alastair Jones +44 7464 830 011
Investor.relations@africa.airtel.com +44 207 493 9315
(mailto:Investor.relations@africa.airtel.com)
Hudson Sandler
Nick Lyon
Emily Dillon
airtelafrica@hudsonsandler.com (mailto:airtelafrica@hudsonsandler.com) +44 207 796 4133
Conference call
Management will host an analyst and investor conference call at 13:00pm UK
time (BST), on Thursday 09th May 2024, 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
(https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=8895526&linkSecurityString=1c41b7fd22)
Key consolidated financial information
Description Unit of measure Year ended Quarter ended
Mar-24 Mar-23 Reported currency Constant currency Mar-24 Mar-23 Reported currency Constant currency
change %
change %
change %
change %
Profit and loss summary
Revenue (1) $m 4,979 5,255 (5.3%) 20.9% 1,118 1,341 (16.6%) 23.1%
Voice revenue $m 2,179 2,491 (12.5%) 11.9% 472 619 (23.8%) 13.7%
Data revenue $m 1,734 1,787 (3.0%) 29.2% 391 469 (16.5%) 31.1%
Mobile money revenue (2) $m 837 692 21.1% 32.8% 206 176 17.0% 35.5%
Other revenue $m 417 437 (4.6%) 23.4% 97 116 (16.5%) 25.7%
Expenses $m (2,572) (2,694) (4.5%) 20.9% (600) (686) (12.6%) 26.3%
EBITDA (3) $m 2,428 2,575 (5.7%) 21.3% 520 659 (21.0%) 19.3%
EBITDA margin % 48.8% 49.0% (22) bps 14 bps 46.5% 49.1% (259) bps (148) bps
Depreciation and amortisation $m (788) (818) (3.6%) 23.3% (173) (220) (21.0%) 17.9%
Operating profit $m 1,640 1,757 (6.7%) 20.3% 347 439 (21.0%) 20.0%
Other finance cost - net of finance income $m (896) (723) 24.0% (142) (204) (30.3%)
Finance cost - exceptional items (4) $m (807) - 0.0% (323) - 0.0%
Total finance cost (5) $m (1,703) (723) (135.6%) (465) (204) 127.9%
(Loss)/Profit before tax $m (63) 1,034 (106.1%) (118) 233 (150.8%)
Tax $m (284) (445) (36.1%) (77) (105) (26.3%)
Tax - exceptional items (6) $m 258 161 60.1% 104 99 5.5%
Total tax credit/(charge) $m (26) (284) (90.8%) 27 (6) (548.0%)
(Loss)/Profit after tax $m (89) 750 (111.9%) (91) 227 (140.2%)
Non-controlling interest $m (76) (87) (12.7%) (13) (32) (58.9%)
Profit attributable to owners of the company - before exceptional items $m 380 512 (25.8%) 115 106 8.1%
(Loss)/Profit attributable to owners of the company $m (165) 663 (124.9%) (104) 195 (153.2%)
EPS - before exceptional items cents 10.1 13.6 (25.9%) 3.0 2.8 7.8%
Basic EPS cents (4.4) 17.7 (124.9%) (2.8) 5.2 (153.2%)
Weighted average number of shares million 3,751 3,752 (0.0%) 3,750 3,750 0.0%
Capex $m 737 748 (1.4%) 243 291 (16.5%)
Operating free cash flow $m 1,691 1,827 (7.4%) 277 368 (24.6%)
Net cash generated from operating activities $m 2,259 2,229 1.4% 493 518 (4.7%)
Net debt $m 3,505 3,524 3,505 3,524
Leverage (net debt to EBITDA) times 1.4x 1.4x 1.4x 1.4x
Return on capital employed % 23.0% 23.3% (31) bps 23.9% 23.4% 48 bps
Operating KPIs
ARPU $ 2.8 3.3 (13.3%) 10.7% 2.4 3.2 (23.8%) 12.5%
Total customer base million 152.7 140.0 9.0% 152.7 140.0 9.0%
Data customer base million 64.4 54.6 17.8% 64.4 54.6 17.8%
Mobile money customer base million 38.0 31.5 20.7% 38.0 31.5 20.7%
( (1)) Revenue includes inter-segment eliminations of $188m for the year
ended 31 March 2024 and $152m for the prior year.
((2)) Mobile money revenue post inter-segment eliminations with mobile
services was $649m for the year ended 31 March 2024, and $540m for the prior
year.
((3)) EBITDA includes other income of $21m for the year ended 31 March 2024
and $13m for the prior period.
((4)) Exceptional items of $807m for the year ended 31 March 2024 relates to
derivative and foreign exchange losses following the devaluation of the
Nigerian naira ($770m) in June 2023 and three-month period ended 31 March 2024
as well as Malawian kwacha devaluation in November 2023 ($37m), respectively.
((5) ) Please refer to the commentary on finance costs as part of 'Financial
review' section on page 5.
((6)) Tax exceptional items of $258m for the year ended 31 March 2024 reflects
the gain corresponding to the $807m exceptional item referred to in point 4
above. $161m exceptional tax gain in the prior period reflects the recognition
of deferred tax credit in Kenya, Democratic Republic of the Congo &
Tanzania.
( )
( )
Financial review for the year ended 31 March 2024
Revenue
Group revenue in reported currency declined by 5.3% to $4,979m, with constant currency growth of 20.9%, which accelerated to 23.1% in Q4'24. Reported currency revenue growth was particularly impacted by significant currency devaluations in Nigeria, Malawi, Zambia and Kenya. Group mobile services revenue grew by 19.4% in constant currency, with voice revenue growth of 11.9% and data revenues growing 29.2%. In Nigeria, constant currency mobile services revenues increased by 25.8%, whilst East Africa saw 21.5% growth and Francophone Africa increased by 9.2%. Mobile money revenue grew by 32.8% in constant currency, primarily driven by continued strong growth in East Africa.
EBITDA
Reported currency EBITDA declined by 5.7% to $2,428m reflecting the impact of currency devaluation over the period, particularly in Nigeria. In constant currency, EBITDA increased to 21.3% with EBITDA margins of 48.8%, up by 14bps. Reported currency EBITDA margins of 48.8% remained resilient despite the currency and inflationary headwinds faced in several markets. Mobile services EBITDA increased 18.8% in constant currency as operating leverage and cost efficiencies continued to limit the FX headwinds and inflationary pressure over the year. Mobile money EBITDA margins of 52.1% increased 234bps in constant currency, supporting growth of 39.0%.
Nigeria currency devaluation impact on revenue and EBITDA
During the period, the Nigerian naira devalued significantly from 461 per US dollar in March 2023 to 1,303 per US dollar in March 2024. The impact of the Nigerian naira devaluation on reported revenue and EBITDA for the year ending 31 March 2024 was $1,042m and $554m respectively. As the currency devaluation occurred at various stages during the year, revenue and EBITDA in the reporting period does not reflect the full year impact. As a result, the next financial year reported currency results will continue to reflect the currency headwinds experienced during FY'24. If the closing rate of 1,303 NGN/USD were to be used to consolidate the results of the Group for the year ended 31 March 2024
1 (#_ftn1)
, reported revenue would have declined further by $603m to $4,376m (16.7% YoY decline) as opposed to the 5.3% decline reported. Similarly, EBITDA would have declined further by $324m to $2,104m (18.3% YoY decline) as opposed to the 5.7% decline reported, with an EBITDA margin of 48.1% (Q4'24: 46.4%).
For future sensitivity on currency devaluation, refer to the Risk section on page 21.
Finance costs
Total finance costs for the year ended 31 March 2024 was $1,703m, primarily
impacted by $1,259m of derivative and foreign exchange losses (reflecting the
revaluation of US dollar balance sheet liabilities and derivatives) as a
result of the currency devaluation primarily in Nigeria and Malawi. Finance
costs excluding derivative and foreign exchange losses increased from $385m to
$444m in the current period primarily on account of shift of foreign currency
debt to local currency debt in the operating entities carrying a higher
average interest rate.
Out of $1,259m derivative and foreign exchange losses, $807m was classified as
an exceptional item as per the company's policy on exceptional items 2
(#_ftn2) of which $770m is related to Nigerian naira devaluation and $37m is
related to Malawian kwacha devaluation.
(Loss)/Profit before tax
Loss before tax at $63m during the year ended 31 March 2024 was largely
impacted by the $807m exceptional losses discussed above. Excluding these
exceptional items, profit before tax for year ended 31 March 2024 was $744m.
Taxation
Total tax charges were $26m as compared to $284m in the prior period. Total
tax charges reflected an exceptional gain of $258m on account of the Nigerian
naira and Malawian kwacha devaluation during the current period compared with
recognition of deferred tax credit of $161m in Kenya, Democratic Republic of
the Congo and Tanzania in the prior period, hence a higher exceptional gain of
$97m. Tax charges excluding exceptional items were $284m compared to $445m in
the prior period.
Tax charge of $26m during the year ended 31 March 2024, despite a loss before
tax of $63m was due to change in profit mix between various OpCos and
withholding taxes on dividends by subsidiaries.
(Loss)/Profit after tax
Loss after tax of $89m during the year ended 31 March 2024 was primarily
impacted by the $549m net of tax impact of the exceptional derivative and
foreign exchange losses. Excluding these exceptional items, profit after tax
for year ended 31 March 2024 was $460m.
Basic EPS
Basic EPS at negative 4.4 cents during the year ended 31 March 2024 was
impacted by the derivative and foreign exchange losses as explained above. EPS
before exceptional items and derivative and foreign exchange losses for the
year ended 31 March 2024 was 18.3 cents.
Leverage
Leverage of 1.4x as on 31 March 2024 was broadly flat from the previous year
despite our significant investments and the currency devaluation in several
markets which resulted in lower reported currency EBITDA as compared to the
previous year. The remaining debt at HoldCo is now $550m, falling due in May
2024. Cash at HoldCo was around $680m at the end of the period and the Group
is fully geared to repay the HoldCo debt when due using this cash.
GAAP measures
Revenue
Reported revenue of $4,979m, declined by 5.3% in reported currency, and grew
by 20.9% in constant currency driven by both customer base growth of 9.0% and
ARPU growth of 10.7%. The gap between constant currency and reported currency
revenue growth was due to the average currency devaluations between the
periods, mainly in the Nigerian naira, the Malawi kwacha, the Zambian kwacha ,
and the Kenyan shilling, partially offset by an appreciation in the Central
African franc.
Reported mobile services revenue at $4,338m, declined 8.1%, and grew by 19.4%
in constant currency. Constant currency growth was driven by growth of 25.8%
in Nigeria, 21.5% in East Africa and 9.2% in Francophone Africa, respectively.
Mobile money revenue grew by 21.1% in reported currency. In constant currency,
mobile money revenue grew by 32.8%, driven by revenue growth in East Africa of
36.0% and Francophone Africa of 22.3%.
Operating profit
Operating profit in reported currency declined by 6.7% to $1,640m as currency
headwinds offset strong revenue growth and continued improvements in operating
efficiency across the Group.
Total finance costs
Total finance costs for the year ended 31 March 2024 of $1,703m, increased
$980m over the prior period. Finance costs were primarily impacted by $807m of
exceptional derivative and foreign exchange losses arising in Nigeria and
Malawi, following the significant currency devaluation during the period.
The Group's effective interest rate increased to 10.1% compared to 7.7% in the
prior period, largely driven by higher local currency debt at the OpCo level,
in line with our strategy of localising debt at OpCo.
Taxation
Total tax charges of $26m declined from $284m in the prior period. Total tax
charges reflected an exceptional gain of $258m on account of the Nigerian
naira and Malawian kwacha devaluation during the current period, compared to
an exceptional gain of $161m in the prior period on account of deferred tax
credits in Kenya, Democratic Republic of the Congo and Tanzania. As a result,
total tax charges reflected a higher exceptional gain of $97m in the current
period. The tax charge of $284m is net of a tax gain of $30m arising from the
reversal of deferred tax liability on account of a reduction of undistributed
retained earnings of Nigeria. This reduction is an indirect consequence of the
impact of the Nigerian naira devaluation.
(Loss)/Profit after tax
(Loss) after tax of $89m during the year ended 31 March 2024 was primarily
impacted by the $549m net of tax impact of the exceptional derivative and
foreign exchange losses.
Basic EPS
Basic EPS at negative 4.4 cents during the year ended 31 March 2024 was
impacted by the derivative and foreign exchange losses as explained above.
Net cash generated from operating activities
Net cash generated from operating activities was $2,259m, up 1.4% as compared
to $2,229m in the prior period.
Alternative performance measures 3 (#_ftn3)
EBITDA
EBITDA of $2,428m, declined by 5.7% in reported currency, and increased by 21.3% in constant currency. Growth in constant currency EBITDA was led by revenue growth and supported by continued improvement in operating efficiencies which limited the impact that inflationary cost pressures had in a number of markets. The EBITDA margin declined by 22 basis points in reported currency to 48.8%.
The gap between constant currency and reported currency EBITDA growth was due to the currency devaluations between the periods, mainly in the Nigerian naira, the Malawi kwacha, the Zambian kwacha, and the Kenyan shilling, partially offset by an appreciation in the Central African franc.
Tax
The effective tax rate was 38.4%, compared to 38.8% in the prior period,
largely due to profit mix changes amongst the OpCos. The effective tax rate is
higher than the weighted average statutory corporate tax rate of approximately
32%, largely due to the profit mix between various OpCos and withholding taxes
on dividends by subsidiaries.
Exceptional items
The exceptional item of $807m is on account of derivative and foreign exchange
losses following the devaluation of the Nigerian naira in June 2023 and Q4'24,
and the Malawian kwacha in November 2023. This has resulted in an exceptional
tax gain of $258m as compared an exceptional tax gain of $161m in the prior
period on account of deferred tax credits in Kenya, Democratic Republic of the
Congo and Tanzania.
EPS before exceptional items
EPS before exceptional items of 10.1 cents declined by 25.9% compared to 13.6
cents in the prior period primarily impacted by the significant derivative and
foreign exchange losses during the year. EPS before exceptional items and
derivative and foreign exchange losses was 18.3 cents compared to 20.5 cents
in the prior period.
Operating free cash flow
Operating free cash flow was $1,691m, lower by 7.4%, as a result of lower
EBITDA during the period partially offset by lower capex in current period.
Other significant updates
Commencement of share buy-back programme
On 1 February 2024, the company announced that in light of the increase in
HoldCo cash, current leverage and the consistent strong operating cash
generation, the Board intended to launch a share buy-back programme of up to
$100m, over a 12 month period. The Board believes that repurchasing its own
shares is an attractive use of its capital in light of the Group's strong long
term growth outlook. The programme will be executed using its cash reserves
and in accordance with applicable securities laws and regulation.
On 1 March 2024, Airtel Africa plc announced the commencement of its share
buyback programme, further to the announcement on 1 February 2024 following
the publication of its nine-month results ended 31 December 2023. The share
buy-back programme is expected to be phased over two tranches, with the first
tranche commencing on 1 March 2024 and anticipated to end on or before 31
August 2024. The first tranche will amount to a maximum of $50 million, with
Airtel Africa entering into an agreement with Citigroup Global Markets Limited
to conduct the buy-back on its behalf. During March 2024, the company
purchased 7.4 million shares for a total consideration of $9m.
Directorate changes
On 6 February 2024, Airtel Africa plc announced that John Danilovich has
informed the Board of his intention to retire as an independent non-executive
director of Airtel Africa plc at the conclusion of this year's AGM in July
2024.
On 30 October 2023 and 31 October 2023 Kelly Bayer Rosmarin and Doug Baillie,
respectively retired as non-executive directors of Airtel Africa plc.
On 9 May 2024, Airtel Africa plc announced the appointment of Paul Arkwright,
CMG, as an independent non-executive director of the Company, with immediate
effect.
Nigerian naira devaluation
On 14 June 2023, the Central Bank of Nigeria (CBN) announced changes to the
operations in the Nigerian Foreign Exchange (FX) market, including the
abolishment of segmentation, with all segments now collapsing into the
Investors and Exporters (I&E) window and the reintroduction of the
'Willing Buyer, Willing Seller' model at the I&E window. As a result of
the CBN decision, the US dollar has appreciated against the Nigerian naira in
the I&E window. The market expectation is that the new foreign currency
policy and subsequent realignment of the several market exchange rates will
provide greater US dollar liquidity over time and help to alleviate the
challenges faced in the last few years to access US dollars in the market.
On 29 January 2024, the FMDQ Securities Exchange Limited ('FMDQ') notified the
market of its amendment to the methodology applied for the computation of the
Nigerian Autonomous Foreign Exchange Fixing ('NAFEX') being the exchange rate
used to consolidate the results of Airtel Africa's Nigeria region. This
development further impacted the Nigerian naira during the period. The closing
NAFEX rate as of 31 March 2024, was NGN1,303 per US dollar.
The impact of both these events resulted in derivative and foreign exchange
losses of $770m in the year which were classified as exceptional.
The Group continues to invest in Nigeria to enable it to capture the growth
opportunity. This continued investment will facilitate growth, drive continued
digitalisation across the country, facilitate economic progress and transform
lives across Nigeria.
Retirement of Airtel Africa plc CEO and appointment of Successor
On 2 January 2024, Airtel Africa plc announced the retirement of Chief
Executive Officer Olusegun "Segun" Ogunsanya and the appointment of Sunil
Taldar, who joined Airtel Africa in October 2023 as Director - Transformation,
as Chief Executive Officer (CEO). Following a transition period, Sunil Taldar
will be appointed to the Board as an Executive Director and assume the role of
CEO on 1 July 2024, at which time Segun will retire from the Board and the
Company.
Launch of Nxtra by Airtel
In December 2023, Airtel Africa launched Nxtra by Airtel ("Nxtra"), a new data
centre business founded on a commitment to meet the continent's growing needs
for trusted, and sustainable data centre capacity and to serve the
fast-growing African digital economy. It aims to build one of the largest
network of data centres in Africa with high-capacity data centres in major
cities located strategically across Airtel Africa's footprint, complementing
its existing edge sites. Nxtra's ambition will allow it to serve the growing
need of African enterprises and its data centre infrastructure will be
designed to host the next generation of computing, while providing multi-MW
capacity in a phased manner.
Nigerian Communications Commission directive on subscriber registration
compliance
In December 2023, the Nigerian Communications Commission (NCC) informed Airtel
Nigeria, in an industry-wide directive, to undertake full network barring of
all SIMs that have failed to submit their National Identity Numbers (NIN) on
or before 28 February 2024. Likewise, customers that have submitted their
NINs, but remain unverified are to be barred by 31st July 2024 (earlier
deadline was 15 April 2024). Furthermore, guidelines were issued whereby no
customer can have more than 4 active SIMs and all such excess SIMs be barred
by 29 March 2024. This directive is part of the ongoing Federal Government
NIN-SIM harmonisation exercise requiring all subscribers to provide valid NIN
information to update SIM registration records.
Airtel Nigeria has complied with the directives issued and barred all
customers without NINs as well as customers with more than 4 active SIMs which
had a very negligible impact on revenue. Currently we are engaging with
approximately 5.7m customers whose NIN are yet to be verified. Since the
directive was issued in December 2023, 7.9m customers have already been
verified. We continue to engage with the NCC and work closely with the
relevant authorities to facilitate and accelerate the verification process to
minimise the risk of service disruption to these customers, whilst also
limiting the revenue impact from our compliance to the directive issued.
Devaluation of the Malawian Kwacha by the Reserve Bank of Malawi
In November 2023, the Reserve Bank of Malawi (RBM) announced structural
changes to the foreign exchange market with its decision to adjust the
exchange rate from selling rate of MWK 1,180 to a selling rate of MWK 1,700 to
the US dollar with effect from 9 November 2023.
As part of the structural changes, RBM started authorizing dealer banks to
freely negotiate exchange rates to trade with their clients and amongst
themselves, notwithstanding any limitations previously in place.
The devaluation resulted in a foreign exchange loss of $37m and is classified
as exceptional.
Uganda Initial Public Offering (IPO)
On 29 August 2023, Airtel Uganda Limited issued a prospectus in relation to
the offer for sale of 8,000,000,000 ordinary shares, representing 20% of
Airtel Uganda Limited on the Uganda Stock Exchange (USE) in-line with the 20%
minimum public listing obligation for all National Telecom Operators under the
current Uganda Communications (Fees & Fines) (Amendment) Regulations 2020.
The issued shares of Airtel Uganda were listed on the Main Investment Market
Segment of the USE on 7 November 2023 at UGX100 per share.
On completion of the IPO in November 2023, 4.4bn shares (10.89% of Airtel
Uganda's total share capital) were transferred to minority shareholders,
whilst the entire 40bn shares began trading on the Main Investment Market
Segment of the USE. Airtel Uganda received a 3-year waiver from the Uganda
Securities Exchange from the requirement to transfer the remaining 9.11%
required to meet the 20% shareholding listing requirement.
Nigeria 2100 MHz spectrum renewal
On 9 May 2023, the Group announced that its Nigerian subsidiary, Airtel
Networks Limited ('Airtel Nigeria'), had made a payment
of NGN58.7bn ($127.4m), payable to the Nigerian Communications
Commission (NCC), to renew its 2x10MHz 2100 MHz spectrum licence, which will
be valid for a period of 15 years following the expiry of the previous licence
(30 April 2022).
This investment to renew the licence reflects our continued confidence in the
opportunity inherent across the Nigerian market, supporting the local
communities and economies through furthering digital inclusion and
connectivity.
Uganda spectrum
The regulator had previously issued an invitation to apply for spectrum in
various bands (700, 800, 2300, 2600, 3300, 3500, etc). On 26 June 2023, the
Uganda Communications Commission confirmed that Airtel Uganda Limited had
qualified for the award of 10 MHz of 800 MHz and 100 MHz of 3500 MHz
spectrum. There is no upfront payout for spectrum but, instead, there is an
annual payout of $1.2m for a period of 17 years, which is the validity period
for the spectrum.
Share capital reduction
On 15 August 2023, Airtel Africa announced the cancellation and extinction of
all its deferred shares of USD 0.50 nominal value each (the 'capital
reduction'), which was approved by shareholders at the annual general meeting
of the Company held on 4 July 2023. The cancellation and extinction was
sanctioned by the High Court of England and Wales (the 'High Court'). The
effect of the capital reduction is to create additional distributable reserves
which will be available to the company going forward and may be used to
facilitate returns to shareholders in the future, whether in the form of
dividends, distributions or purchases of the company's own shares.
The company confirms that, following the capital reduction, the issued share
capital of the company will be 3,758,151,504 ordinary shares of USD 0.50
nominal value each, carrying one vote each. There are no shares held in
treasury. The total voting rights in the company therefore will be
3,758,151,504.
Dividend payment timetable
The board has recommended a final dividend of 3.57 cents for the financial
year ended 31 March 2024, payable on 26 July 2024 to shareholders recorded in
the register at the close of business on 21 June 2024.
Last day to trade shares cum dividend 19
June 2024
Shares commence trading ex-dividend 20 June
2024
Record
date
21 June 2024
Last date for currency
election 8
June 2024
Payment
date
26 July 2024
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
(http://www.airtel.africa/investors)
Strategic overview
The Group provides telecoms and mobile money services in 14 emerging markets
of sub-Saharan Africa. Our markets are characterised by huge geographies with
relatively sparse populations, high population growth rates, high proportions
of youth, low smartphone penetration, low data penetration and relatively
unbanked populations. Unique mobile user penetration across the Group's
footprint is around 48%, and banking penetration remains under 50%. These
indicators illustrate the significant opportunity still available to Airtel
Africa to enhance both digital and financial inclusion in the communities we
serve, enriching and transforming their lives through digitalisation, whilst
at the same time growing our revenues profitably across each of our key
services of voice, data and mobile money.
The Group continues to invest in its network and distribution infrastructure
to enhance both mobile connectivity and financial inclusion across our
countries of operation. In particular, we continued to invest in expanding our
4G network footprint to increase data capacity in our networks to support
future business growth, as well as deploying new sites, especially in rural
areas, to enhance coverage and connectivity.
We describe our 'win with' strategy through six strategic pillars. Our
customers are at the core of our strategy, through our corporate purpose of
transforming lives.
The digitalisation of our products and services is fundamental to enabling the
success of each pillar within our 'win with' strategy. In addition, the
digitisation of our internal systems and processes ensures we optimise our
operating flexibility.
Underpinning the Group's business strategy for growth is our sustainability
strategy which supports our well-established corporate purpose of transforming
lives, our continued commitment to driving sustainable development and acting
as a responsible business. Our sustainability strategy sets out our goals and
commitments to foster financial inclusion, bridge the digital divide and serve
more customers in some of the least penetrated telecommunication markets in
the world.
This year, we continued to make strong progress across each of our core
strategic pillars: 'Win with technology', 'Win with distribution', 'Win with
data', 'Win with mobile money', 'Win with cost' and 'Win with people'.
Win with technology
The Group remains focused on delivering best-in-class services, expanding 4G
networks and has launched new 5G technology in key markets including Kenya,
Nigeria, Tanzania, Uganda and Zambia following the acquisition of 5G spectrum.
Reaching underserved communities is a key priority, and we continue to: 1)
increase rural coverage through new site rollouts, 2) acquire additional
spectrum and 3) invest in new technology across our markets.
As part of ensuring our services are future ready, in addition to purchasing
spectrum, we grew our fibre infrastructure and tested our 5G capabilities.
After exploring the potential for additional third-party revenue streams, we
have invested in data centres to further support digital inclusion across our
markets. We continued to strengthen our fibre business, which is now
delivering encouraging revenue growth. During the year we added a further
around 5,000 km of fibre, with a total of 75,400+ km now deployed.
Furthermore, we expanded our international data capacity via submarine cables
by 100% to 3.1 Tbps with current 45% utilization through a combination of
adding additional routes and capacity.
Overall, the capacity investment has resulted in a 32.7% increase in data
capacity - reaching 31,700+ terabytes (TB) per day, with peak hour data
utilization at 53% allowing for increased network resilience and an enriched
service continuity.
Following substantial spectrum acquisitions in FY'23, we further invested in
the renewal of 2100 MHz spectrum in Nigeria during this period. Continued
investment into spectrum across our markets will further enhance network
capacity and coverage.
Win with distribution
We continue to strengthen our exclusive channel of kiosks/mini-shops and
Airtel Money branches along with multi-brand outlets in both urban and rural
markets. We offer a simplified and enhanced Know Your Customer (KYC) app to
provide a seamless customer onboarding experience. These have enabled us to
add customers, resulting in customer base growth of 9.0%, and supported voice
revenue growth of 11.9% in constant currency.
The Group continued its investment in strengthening our distribution network
infrastructure, with a focus on rural distribution networks. During the
period, the Group expanded its exclusive franchise stores, adding over 27,800
kiosks and mini shops (taking the total to almost 89,600 kiosks and mini
shops) and adding 1,550+ Airtel Money branches (AMB), taking the total to
19,500+ AMBs across our footprint. The Group also added around 59,600
activating outlets, an increase of 19.6%.
Win with data
With continued investments in the expansion of our 4G network and launching 5G
in several OpCo's, the clear focus is on enhancing customer experience across
the network. This is not only for mobile users but also for broadband
enterprise users to support continued data ARPU and data revenue growth.
Expansion of the 4G network and improved user experience has helped drive
increased smartphone penetration, customer ARPU and consumption per data user
across the segments. Smartphone penetration was up 4.2 percentage points to
40.5% and data customer grew by 17.8%, now representing 42.1% of our total
base. Smartphone data customers grew by 24.7% leading to higher consumption
& ARPU growth.
Data usage per customer per month also grew by 20.8% and reached 5.4 GB per
month from 4.4 GB a year ago. This increase was led by increased smartphone
penetration and an expansion of our home broadband and enterprise customers.
All the above contributed to a 29.2% growth in constant currency data revenue.
4G handset users' data usage constituted 88.3% of total data usage on the
network in Q4'24 growing at 61.3%, with 4G data usage per data customer of
over 8.7GB per month.
Win with mobile money
The low penetration of traditional banking services across our footprint
leaves a large number of unbanked customers whose needs can be largely
fulfilled through mobile money services. We aim to drive the uptake of Airtel
Money services in all our markets, harnessing the ability of our profitable
mobile money business model to enhance financial inclusion in some of the most
'unbanked' populations in the world.
During the period, we focussed on growing our ecosystem and driving customer
acquisition. We launched new international money transfer routes, as well as
new loan products and continued to integrate more partners into our
ecosystem.
We continued to expand our exclusive distribution channel of AMBs and kiosks
to ensure availability of services to customers, even in the rural areas. The
number of kiosks and mini shops increased by 45% and Airtel Money branches by
over 8.7%. Furthermore, our non-exclusive channel of mobile money agents
expanded by 53%, following implementation of our digital on-boarding journey.
Our distribution expansion and enhanced offerings helped drive 20.7% growth in
our mobile money customer base, now serving 38.0 million customers, which
represents 24.9% of our total customer base.
Our Nigeria PSB licence remains an opportunity for the Group. During this
year, we accelerated our customer acquisition strategy and our customer base
is 1.5 million active customers. We continue to build the ecosystem to grow
our transaction value.
Along with data, mobile money continues to be one of our fastest growing
services, delivering revenue growth of 32.8% in full year. It is an
increasingly important part of our business, with over $112bn of annual
transaction value in reported currency. Mobile money revenue accounts for
16.8% of the Group revenues in the period.
Mobile money ARPU increased by 8.6% in constant currency over the period,
driven by increased transaction values and higher contributions from cash
transactions, P2P transfers and mobile services recharges through Airtel
Money.
Win with cost
Despite the impact of inflationary pressure across the Group and continuing
high fuel prices across countries, our 'win with cost' initiatives have
continued to support margin resilience across the Group.
We continue our focus on enhancing cost efficiency through changes in the
operating design and response to the macroeconomic changes, an example of
which is the roll out of a majority of new sites using green initiatives
(solar, batteries and grid connection). We embrace robust cost discipline and
continuously seek to improve our processes to reduce operating costs,
delivering one of the highest EBITDA margins in the industry. We also continue
to embrace the latest technology to optimally design our networks and improve
our capital expenditure efficiency enabling us to build large incremental
capacities at lower marginal cost.
We are undertaking various cost efficiency initiatives to mitigate the
headwinds, relating mainly to: (i) working with active equipment manufacturers
to implement energy saving features to reduce energy consumption, (ii) working
with tower companies (towercos) to invest more in energy efficient equipment
(including in lithium batteries and solar equipment), (iii) enhance grid
connectivity, (iv) transmission re-routing to optimise lease line capacity and
(v) shift towards digital recharges, especially through Airtel Money to reduce
commission pay-outs.
Win with people
We continue to operate in a highly competitive and volatile business landscape
and therefore our ongoing commitment to our employees remains integral to
winning despite operating environment headwinds.
We have developed various mechanisms to ensure that our employees remain
heard, this includes our engagement survey which is used to measure employee
sentiment on key matters affecting them including engagement, reward, values
and collaboration amongst others. The next engagement survey will be conducted
in July 2024. 81% of employees participated in the last employee engagement
survey, being 2% higher than the previous survey. In addition to the
engagement survey other mechanisms where we engage with our people
meaningfully include one on one discussions with senior leadership, including
when our leadership visits to our OpCo's. These mechanisms enable us to
identify strength areas, areas of improvement with actionable insight for
improvement and opportunities for continuous collaboration across our
business.
We recognise the importance of having diverse teams considering the diverse
communities we serve across our 17 operations. Gender diversity remains a key
focus area with 28.3% of women in our workforce (up from 26% in the prior
period), and we had an increase of different nationalities to 43 (from 39 in
the prior period). Additional focus on accelerating the recruitment and
promotion by merit of female talent within the business remains in focus.
Talent capability and capacity has remained a key focus throughout the year.
We focused on updating our learning content across our online and classroom
platforms to build capability for now and for the future. In addition,
on-the-job training, coaching and leadership, building leadership capability
and functional expertise remains at the heart of our learning and development
programmes.
Through our Executive leadership development, Africa Mobility and Women for
Tech programs, we have been able to support talent development and retention
which continues to help us build succession planning across critical roles.
These programmes offer exposure and learning opportunities to our high
potential and top performing talent as part of an accelerated career
development programme.
Our high-performance culture remains true to who we are. This is aligned to
our reward philosophy where 'pay for performance' based on key result areas
which each employee is measured on and consistently strives to meet and
exceed.
We are cognisant that by providing great work experiences for our people, we
are able to drive greater employee engagement and satisfaction. This in turn
leads to improved performance, innovation and subsequently transformative
experiences for both our employees and in the communities where we serve.
Financial review for the year ended 31 March 2024
Nigeria - Mobile services
Description Unit of Year ended Quarter ended
measure
Mar-24 Mar-23 Reported Constant Mar-24 Mar-23 Reported Constant
currency currency currency currency
change
change
change
change
Summarised statement of
operations
Revenue $m 1,503 2,128 (29.4%) 25.8% 266 543 (51.0%) 34.1%
Voice revenue (1) $m 711 1,053 (32.5%) 19.6% 124 262 (52.7%) 29.0%
Data revenue $m 654 884 (25.9%) 32.1% 116 230 (49.6%) 38.0%
Other revenue (2) $m 138 191 (27.9%) 30.6% 26 51 (48.5%) 43.1%
EBITDA $m 811 1,101 (26.3%) 30.9% 139 284 (51.1%) 32.8%
EBITDA margin % 54.0% 51.7% 226 bps 209 bps 52.2% 52.3% (7) bps (52) bps
Depreciation and amortisation $m (264) (344) (23.3%) 38.2% (41) (97) (57.1%) 26.5%
Operating profit $m 509 721 (29.4%) 25.4% 89 177 (49.7%) 36.2%
Capex $m 252 293 (13.9%) (13.9%) 74 126 (40.9%) (40.9%)
Operating free cash flow $m 559 808 (30.8%) 68.6% 65 158 (59.1%) 225.1%
Operating KPIs
Total customer base million 50.9 48.4 5.3% 50.9 48.4 5.3%
Data customer base million 27.4 23.8 14.9% 27.4 23.8 14.9%
Mobile services ARPU $ 2.5 3.8 (33.2%) 19.0% 1.7 3.8 (53.9%) 26.4%
((1) )Voice revenue includes inter-segment revenue of $1m in the year ended
31 March 2024 and in the prior period. Excluding inter-segment revenue, voice
revenue was $710m in year ended 31 March 2024 and $1,052m in the prior period.
((2)) Other revenue includes inter-segment revenue of $2m in the year ended 31
March 2024 and in the prior period. Excluding inter-segment revenue, other
revenue was $136m in year ended 31 March 2024 and $189m in the prior period.
Revenue grew by 25.8% in constant currency, with growth accelerating to 34.1%
in Q4'24 largely driven by strong data demand. In reported currency, revenues
declined by 29.4% to $1,503m on account of the significant devaluation of the
Nigerian naira. The constant currency revenue growth was driven by both
customer base growth of 5.3% and ARPU growth of 19.0%. Customer base growth in
current period was negatively impacted by barring of customers pursuant to KYC
directives by the regulator. Q4'24 reported currency revenues declined by
51.0% reflecting the impact of Nigerian naira devaluation during the period.
Voice revenue grew by 19.6% in constant currency, driven by both customer base
growth of 5.3% and voice ARPU growth of 13.2%.
Data revenue grew by 32.1% in constant currency, as a function of both data
customer and data ARPU growth of 14.9% and 14.0%, respectively. Data usage per
customer increased by 25.4% to 6.3 GB per month (from 5.0 GB in the prior
period). Our continued 4G network rollout has resulted in nearly 100% of all
our sites delivering 4G services. Further 235 sites are 5G enabled.
Other revenues grew by 30.6% in constant currency, contributed by growth in
messaging and value-added services coupled with 32.8% growth in leased line
revenue.
EBITDA of $811m declined by 26.3% in reported currency, but increased by 30.9%
in constant currency. The EBITDA margin increased by 226 basis points to
54.0%. During the period, there was a one-time opex benefit of $7m on account
of VAT refunds on tower rentals. Excluding this benefit, the FY'24 EBITDA
margin would have increased by 180 basis points. The increase in EBIDTA margin
was primarily due to the growth in constant currency revenues, supported by
continued cost efficiencies. The Q4'24 EBITDA margin of 52.2% - below the
FY'24 EBITDA margin of 54.0% - reflects the recent increase in diesel costs.
Diesel prices have increased significantly in Q4'24 but remain volatile. If
current levels persist, the full impact will be reflected in future EBITDA
margins.
Operating free cash flow was $559m, up by 68.6% in constant currency, largely
due to the strong EBITDA growth and lower capex in current period.
East Africa - Mobile services (1)
Description Unit of Year ended Quarter ended
measure
Mar-24 Mar-23 Reported Constant Mar-24 Mar-23 Reported Constant
currency currency currency currency
change
change
change
change
Summarised statement of
operations
Revenue $m 1,622 1,508 7.5% 21.5% 395 380 4.2% 22.5%
Voice revenue (2) $m 851 836 1.8% 14.8% 200 204 (2.0%) 15.0%
Data revenue $m 621 537 15.5% 31.0% 156 140 11.2% 31.0%
Other revenue (3) $m 150 135 10.6% 26.1% 39 36 11.1% 31.9%
EBITDA $m 788 755 4.3% 17.1% 185 193 (4.1%) 12.4%
EBITDA margin % 48.6% 50.1% (151) bps (182) bps 46.7% 50.7% (401) bps (418) bps
Depreciation and amortisation $m (287) (260) 10.6% 23.3% (72) (70) 2.6% 17.5%
Operating profit $m 452 459 (1.5%) 11.9% 101 112 (9.8%) 8.9%
Capex $m 284 256 10.9% 10.9% 107 97 9.5% 9.5%
Operating free cash flow $m 504 499 0.9% 20.6% 78 96 (18.2%) 15.6%
Operating KPIs
Total customer base million 69.4 62.7 10.7% 69.4 62.7 10.7%
Data customer base million 26.6 21.9 21.5% 26.6 21.9 21.5%
Mobile services ARPU $ 2.0 2.1 (2.9%) 9.7% 1.9 2.0 (5.9%) 10.7%
((1) ) The East Africa business region includes Kenya, Malawi, Rwanda,
Tanzania, Uganda and Zambia.
((2) )Voice revenue includes inter-segment revenue of $1m in the year ended
31 March 2024 and in the prior period. Excluding inter-segment revenue, voice
revenue was $850m in year ended 31 March 2024 and $835m in the prior period.
((3) ) Other revenue includes inter-segment revenue of $12m in the year
ended 31 March 2024 and $11m in the prior period. Excluding inter-segment
revenue, other revenue was $138m in year ended 31 March 2024 and $124m in the
prior period.
East Africa revenue grew by 7.5% in reported currency to $1,622m, and by 21.5%
in constant currency. The constant currency growth was made up of voice
revenue growth of 14.8%, data revenue growth of 31.0% and other revenue growth
of 26.1%. The differential in growth rates is primarily contributed by the
devaluation in Zambian kwacha, Malawi kwacha and Kenya shilling.
Voice revenue grew by 14.8% in constant currency, driven by both customer base
growth of 10.7% and voice ARPU growth of 3.6%. The customer base growth was
largely driven by expansion of both increased network coverage and the
increasing scale of the distribution network. Voice ARPU growth of 3.6% was
supported by an increase in voice usage per customer by 6.0% to 407 minutes
per customer per month partially offset by the interconnect rate reduction in
Tanzania and Rwanda.
Data revenue grew by 31.0% in constant currency, largely driven by data
customer base growth of 21.5% and data ARPU growth of 4.2%. Our continued
investment in the network and expansion of 4G network infrastructure helped us
grow both the data customer base and usage levels. 96.4% of our East Africa
network sites are now on 4G, compared to 90.4% in the prior period.
Further,799 sites are 5G enabled in four markets. In Q4'24, total data usage
per customer increased to 5.1 GB per customer per month, up by 20.1%.
EBITDA increased to $788m, up by 4.3% in reported currency and up by 17.1% in
constant currency. EBITDA margin at 48.6%, declined by 151 basis points which
was primarily impacted by rising fuel prices in several of our key markets,
with the biggest impact being witnessed in Q4'24.
Operating free cash flow was $504m, up by 20.6% in constant currency, due
largely to EBITDA growth, partially offset by increased capex.
Francophone Africa - Mobile services (1)
Description Unit of Year ended Quarter ended
measure
Mar-24 Mar-23 Reported Constant Mar-24 Mar-23 Reported Constant
currency currency currency currency
change
change
change
change
Summarised statement of
operations
Revenue $m 1,213 1,090 11.3% 9.2% 300 282 6.5% 6.0%
Voice revenue (2) $m 622 607 2.4% 0.4% 149 154 (3.3%) (3.7%)
Data revenue $m 459 366 25.4% 22.9% 119 98 21.8% 21.2%
Other revenue (3) $m 132 117 13.5% 12.3% 32 30 6.8% 6.7%
EBITDA $m 512 480 6.9% 4.7% 118 124 (5.1%) (5.8%)
EBITDA margin % 42.2% 44.0% (176) bps (182) bps 39.2% 44.0% (478) bps (490) bps
Depreciation and amortisation $m (209) (190) 10.4% 8.3% (54) (47) 14.0% 13.6%
Operating profit $m 255 255 0.0% (2.0%) 51 67 (23.5%) (24.4%)
Capex $m 157 151 3.9% 3.9% 48 57 (15.6%) (15.6%)
Operating free cash flow $m 355 328 8.2% 5.1% 70 67 4.0% 2.3%
Operating KPIs
Total customer base million 32.3 28.9 11.8% 32.3 28.9 11.8%
Data customer base million 10.4 8.9 16.0% 10.4 8.9 16.0%
Mobile services ARPU $ 3.3 3.3 (0.6%) (2.4%) 3.1 3.3 (4.9%) (5.3%)
( (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 $3m in the year ended
31 March 2024 and in the prior period. Excluding inter-segment revenue, voice
revenue was $619m in year ended 31 March 2024 and $604m in the prior period.
((3) )Other revenue includes inter-segment revenue of $3m in the year ended
31 March 2024 and in the prior period. Excluding inter-segment revenue, other
revenue was $129m in year ended 31 March 2024 and $114m in the prior period.
Revenue grew by 11.3% in reported currency and by 9.2% in constant currency.
Higher reported currency growth as compared to constant currency is due to the
appreciation in the Central African franc, partially offset by a devaluation
in the Madagascar ariary.
Voice revenue grew by 0.4% in constant currency, as customer base growth of
11.8% was partially offset by a decline in voice ARPU. Voice ARPU was
negatively impacted by an interconnect rate reduction in Congo B and Niger
while the customer base growth was driven by the expansion of both network
coverage and distribution infrastructure.
Data revenue grew by 22.9% in constant currency, supported by customer base
growth of 16.0%. Increased data usage across the network supported ARPU growth
of 2.9%. Our continued 4G network rollout resulted in an increase in total
data usage of 49.1% and per customer data usage increase of 24.8%. For Q4'24,
data usage per customer increased to 4.6 GB per month (up from 3.8 GB in the
prior period).
EBITDA at $512m, increased by 6.9% and 4.7% in reported and constant currency,
respectively. The EBITDA margin declined to 42.2%, a decline of 182 basis
points in constant currency. The EBITDA margin decline was mainly due to a
one-time opex benefit of $19m in the prior period. The EBITDA margin in Q4'24
was impacted by an increase in fixed frequency fees in a key market combined
with a slowdown in revenue growth in key markets.
Operating free cash flow was $355m, increased by 5.1% in constant currency,
due to the increased EBITDA, partially offset by increased capex.
Mobile services
Description Unit of measure Year ended Quarter ended
Mar-24 Mar-23 Reported Constant Mar-24 Mar-23 Reported Constant
currency currency currency currency
change
change
change
change
Summarised statement of
operations
Revenue (1) $m 4,338 4,721 (8.1%) 19.4% 962 1,205 (20.2%) 21.5%
Voice revenue $m 2,179 2,491 (12.5%) 11.9% 472 619 (23.8%) 13.7%
Data revenue $m 1,734 1,787 (3.0%) 29.2% 391 469 (16.5%) 31.1%
Other revenue $m 425 443 (4.1%) 23.5% 99 117 (16.1%) 25.8%
EBITDA $m 2,115 2,336 (9.5%) 18.8% 443 602 (26.5%) 14.8%
EBITDA margin % 48.8% 49.5% (73) bps (26) bps 46.0% 50.0% (397) bps (273) bps
Depreciation and amortisation $m (760) (794) (4.2%) 23.4% (166) (213) (21.9%) 19.6%
Operating profit $m 1,219 1,435 (15.0%) 14.0% 243 358 (32.2%) 11.0%
Capex $m 693 700 (1.0%) (1.0%) 229 280 (18.2%) (18.2%)
Operating free cash flow $m 1,422 1,636 (13.1%) 30.9% 214 322 (33.6%) 59.3%
Operating KPIs
Mobile voice
Customer base million 152.7 140.0 9.0% 152.7 140.0 9.0%
Voice ARPU $ 1.2 1.5 (19.9%) 2.4% 1.0 1.5 (30.3%) 4.0%
Mobile data
Data customer base million 64.4 54.6 17.8% 64.4 54.6 17.8%
Data ARPU $ 2.4 3.0 (19.4%) 7.3% 2.1 2.9 (30.0%) 9.9%
((1) )Mobile service revenue after inter-segment eliminations was $4,330m
in the year ended 31 March 2024 and $4,715m in the prior period.
Overall revenue from mobile services declined by 8.1% in reported currency
with growth of 19.4% in constant currency. The constant currency growth was
evident across all regions and services. Mobile services revenue grew in
Nigeria by 25.8%, in East Africa by 21.5% and in Francophone Africa by 9.2%,
respectively.
Voice revenue grew by 11.9% in constant currency, supported by both customer
base growth of 9.0% and voice ARPU growth of 2.4%. Customer base growth was
driven by the expansion of our network and distribution infrastructure. The
voice ARPU growth of 2.4% was supported by an increase in voice usage per
customer of 5.2%, reaching 286 minutes per customer per month, with total
minutes on the network increasing by 14.9%.
Data revenue grew by 29.2% in constant currency, driven by both customer base
growth of 17.8% and data ARPU growth of 7.3%. The customer base growth was
recorded across all the regions supported by the expansion of our 4G network.
95.0% of our total sites are now on 4G, compared with 90.3% in the prior
period. 5G is operational across five countries, with 1,034 sites deployed. In
Q4'24, data usage per customer increased to 5.7 GB per customer per month
(from 4.6 GB in the prior period). In the full year ended 31 March 2023, data
revenue contributed to 40.0% of total mobile services revenue, up from 37.8%
in the prior period.
EBITDA was $2,115m, declined 9.5% in reported currency and up by 18.8% in
constant currency. The EBITDA margin declined by 73 basis points to 48.8%, a
decline of 26 basis points in constant currency.
Operating free cash flow was $1,422m, up by 30.9% in constant currency, due to
the increased EBITDA.
Mobile money
Description Unit of measure Year ended Quarter ended
Mar-24 Mar-23 Reported Constant Mar-24 Mar-23 Reported Constant
currency currency currency currency
change
change
change
change
Summarised statement of operations
Revenue (1) $m 837 692 21.1% 32.8% 206 176 17.0% 35.5%
Nigeria $m 2 0 - - 0 0 - -
East Africa $m 635 531 19.8% 36.0% 154 135 14.1% 38.2%
Francophone Africa $m 200 161 24.3% 22.3% 52 41 26.4% 25.9%
EBITDA $m 436 344 26.8% 39.0% 109 88 24.4% 43.5%
EBITDA margin % 52.1% 49.8% 236 bps 234 bps 52.9% 49.8% 315 bps 294 bps
Depreciation and amortisation $m (18) (17) 6.0% 22.7% (4) (5) (11.7%) 11.3%
Operating profit $m 405 318 27.6% 39.5% 102 81 26.5% 45.6%
Capex $m 27 33 (19.5%) (19.5%) 10 7 41.9% 41.9%
Operating free cash flow $m 409 311 31.6% 45.6% 99 81 23.0% 43.7%
Operating KPIs
Mobile money customer base million 38.0 31.5 20.7% 38.0 31.5 20.7%
Transaction value $bn 112.3 88.6 26.8% 38.2% 27.7 24.3 14.1% 30.2%
Mobile money ARPU $ 2.0 2.0 (0.9%) 8.6% 1.8 1.9 (2.9%) 12.5%
( (1)) Mobile money service revenue post inter-segment eliminations with
mobile services was $649m in the year ended 31 March 2024 and $540m in the
prior year.
Mobile money revenue grew by 21.1% in reported currency, with constant
currency growth of 32.8% accelerating to 35.5% in Q4'24. The differential in
growth rates is primarily as the result of devaluation in Zambian kwacha and
Malawi kwacha, partially offset by appreciation in Central African franc. The
constant currency mobile money revenue growth was driven by revenue growth in
both East Africa and Francophone Africa of 36.0% and 22.3%, respectively. In
Nigeria, Company was focussed on customer acquisition through the year with
1.5 million of active customers registered for mobile money services in
Nigeria at the end of March 2024. Annualised transaction value for Nigeria
SmartCash grew by 15% in the current quarter as compared to quarter ended
December 2023. Additionally, we added almost 39,000 agents during the quarter
reaching almost 205,000 agents as of 31 March 2024.
The constant currency revenue growth of 32.8% was driven by both our customer
base growth of 20.7% and mobile money ARPU growth of 8.6%. The expansion of
our distribution network, particularly our exclusive channels of Airtel Money
branches and kiosks, supported customer base growth of 20.7%. The mobile money
ARPU growth of 8.6% was driven by transaction value per customer growth of
13.1% in constant currency, to $262 per customer per month.
Annual transaction value amounted to over $112bn in reported currency, with
mobile money revenue contributing 16.8% of total Group revenue during the full
year period ending 31 March 2024.
EBITDA was $436m, up by 26.8% and 39.0% in reported and constant currency,
respectively. The EBITDA margin reached 52.1%, an improvement of 234 basis
points in constant currency and 236 basis points in reported currency, driven
by continued operating leverage.
Regional performance
Nigeria
Description Unit of measure Year ended Quarter ended
Mar-24 Mar-23 Reported Constant Mar-24 Mar-23 Reported Constant
currency currency currency currency
change
change
change
change
Revenue $m 1,504 2,128 (29.3%) 25.9% 266 543 (51.0%) 34.2%
Voice revenue $m 711 1,053 (32.5%) 19.6% 124 262 (52.7%) 29.0%
Data revenue $m 654 884 (25.9%) 32.1% 116 230 (49.6%) 38.0%
Mobile money revenue $m 2 0 - - 0 0 - -
Other revenue $m 138 191 (27.9%) 30.6% 26 51 (48.5%) 43.1%
EBITDA $m 805 1,093 (26.3%) 30.8% 138 281 (51.0%) 33.0%
EBITDA margin % 53.5% 51.4% 218 bps 202 bps 51.8% 51.8% (3) bps (48) bps
Operating KPIs
ARPU $ 2.5 3.8 (33.1%) 19.1% 1.7 3.8 (53.8%) 26.4%
East Africa
Description Unit of measure Year ended Quarter ended
Mar-24 Mar-23 Reported Constant Mar-24 Mar-23 Reported Constant
currency currency currency currency
change
change
change
change
Revenue $m 2,125 1,931 10.1% 24.6% 516 487 5.9% 25.5%
Voice revenue $m 851 836 1.8% 14.8% 200 204 (2.0%) 15.0%
Data revenue $m 621 537 15.5% 31.0% 156 140 11.2% 30.9%
Mobile money revenue $m 635 530 19.9% 36.0% 154 135 14.1% 38.2%
Other revenue $m 145 131 10.2% 25.9% 38 34 11.3% 31.9%
EBITDA $m 1,134 1,032 9.8% 23.8% 270 264 2.4% 21.5%
EBITDA margin % 53.3% 53.5% (13) bps (31) bps 52.3% 54.1% (179) bps (172) bps
Operating KPIs
ARPU $ 2.6 2.7 (0.6%) 12.4% 2.5 2.6 (4.3%) 13.4%
Francophone Africa
Description Unit of measure Year ended Quarter ended
Mar-24 Mar-23 Reported Constant Mar-24 Mar-23 Reported Constant
currency currency currency currency
change
change
change
change
Revenue $m 1,350 1,201 12.4% 10.3% 336 310 8.4% 7.9%
Voice revenue $m 622 607 2.4% 0.4% 149 154 (3.3%) (3.7%)
Data revenue $m 459 366 25.4% 22.9% 119 98 21.8% 21.3%
Mobile money revenue $m 200 161 24.3% 22.3% 52 41 26.4% 25.9%
Other revenue $m 131 115 13.6% 12.2% 32 30 6.6% 6.4%
EBITDA $m 620 563 10.2% 8.1% 146 145 0.2% (0.5%)
EBITDA margin % 46.0% 46.9% (93) bps (97) bps 43.4% 46.9% (355) bps (366) bps
Operating KPIs
ARPU $ 3.7 3.7 0.4% (1.4%) 3.5 3.6 (3.2%) (3.6%)
Consolidated performance
Description UoM Year ended - March 2024 Year ended - March 2023
Mobile services Mobile money Unallocated Eliminations Total Mobile services Mobile money Unallocated Eliminations Total
Revenue $m 4,338 837 - (196) 4,979 4,721 692 - (158) 5,255
Voice revenue $m 2,179 - - 2,179 2,491 - - 2,491
Data revenue $m 1,734 - - 1,734 1,787 - - 1,787
Other revenue $m 425 - (8) 417 443 - (6) 437
EBITDA $m 2,115 436 (123) - 2,428 2,336 344 (105) - 2,575
EBITDA margin % 48.8% 52.1% 48.8% 49.5% 49.8% 49.0%
Depreciation and amortisation $m (760) (18) (10) - (788) (794) (17) (7) - (818)
Operating profit $m 1,219 405 16 - 1,640 1,435 318 4 - 1,757
( )
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Risk factors
The Group's business and 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 currently unknown to the Group, or those the Group currently
deems immaterial, may, individually or cumulatively, also have a material
adverse impact on the Group's business, results of operations and financial
position.
Summary of principal risks
The Group continually monitors its external and internal environment to
identify risks which have the ability to impact its operations or the
achievement of its objectives. This year, the Group principal risks now
reflect risks related to geo-political uncertainties and adverse
macro-economic environments.
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. Global geopolitical and regional tensions have the potential to
impact our business directly and indirectly due to the interconnectedness of
the global supply chain. Relatedly, adverse macroeconomic conditions such as
rising inflation and increased cost of living not only puts pressure on the
disposable income of our customers but also increases the cost of inputs for
our business negatively impacting sales and profitability.
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, increase in global
commodity prices and inflationary pressures could lead to a significant
increase in our operating cost structure while also negatively impacting the
disposable income of consumers. These adverse economic conditions therefore
not only put pressure on our profitability but also on customer usage for our
services.
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 ability to provide quality of service to our customers and meet
quality of service (QoS) requirements depends on the robustness and resilience
of our technology stack and ecosystem encompassing hardware, software,
products, services, and applications and our ability to respond appropriately
to any disruptions. However, telecommunications networks are subject to the
risks of technical failures, aging infrastructure, human error, wilful acts of
destruction or natural disasters.
9. We operate in a diverse and dynamic legal, tax and regulatory
environment. Adverse changes in the political, macro-economic and policy
environment could have a negative impact on our ability to achieve our
strategy. While the group makes every effort to comply with its legal and
regulatory obligations in all its operating jurisdictions in line with the
group's risk appetite, we are however continually faced with an uncertain and
constantly evolving legal, regulatory, and policy environment in some of the
markets where we operate.
10. Our multinational footprint means we are constantly exposed to the risk
of adverse currency fluctuations and the macroeconomic conditions in the
markets where we operate. We derive revenue and incur costs in local
currencies where we operate, but we also incur costs in foreign currencies,
mainly from buying equipment and services from manufacturers and technology
service providers. That means adverse movements in exchange rates between the
currencies in our OpCos and the US dollar could have a negative effect on our
liquidity and financial condition. In some markets, we face instances of
limited supply of foreign currency within the local monetary system. This not
only constrains our ability to fully benefit at Group level from strong cash
generation by those OpCos but also impacts our ability to make timely foreign
currency payments to our international suppliers.
Given the severity of this risk, specifically in some of our OpCos, the Group
management continuously monitors the potential impact of this risk of exchange
rate fluctuations based on the following methodology:
a) Comparing the average devaluation of each currency in the markets in
which the Group operates against US dollar on 3-year and 5-year historic basis
and onshore forward exchange rates over a 1-year period.
b) If either of the above devaluation is higher than 5% per annum,
management selects the highest of these exchange rates.
c) Management then uses this exchange rate to monitor the potential
impact of using such rate on the Group's income statement so that the Group
can actively monitor and assess the impact on the Group's financials due to
exchange rate fluctuations.
Additionally, for our Nigerian operations, management uses different
sensitivity analysis for scenario planning purposes which include the impact
of the devaluation from the recent changes to the operations in the Nigerian
Foreign Exchange (FX) market.
With respect to currency devaluation sensitivity going forward, on a 12-month basis assuming that the USD appreciation occurs at the beginning of the period, a further 1% USD appreciation across all currencies in our OpCos would have a negative impact of $45m - $47m on revenues, $21m - $22m on EBITDA and $21m - $23m on foreign exchange loss (excluding derivatives). Our largest exposure is to the Nigerian naira, for which on a similar basis, a further 1% USD appreciation would have a negative impact of $10m - $11m on revenues, $5m - $6m on EBITDA and $8.5m - $10.5m on foreign exchange loss (excluding derivatives).
This does not represent any guidance and is being used solely to illustrate
the potential impact of further currency devaluation on the Group for the
purpose of exchange rate risk management. The accounting under IFRS is based
on exchange rates in line with the requirements of IAS 21 'The Effect of
Changes in Foreign Exchange' and does not factor in the devaluation mentioned
above.
Based on above-mentioned specific methodology for the identified OpCos,
management evaluates specific mitigation actions based on available mechanisms
in each of the geographies. For further details on such mitigation action,
refer to the risk section of the Annual Report and Accounts 2022/23.
( )
( )
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 $1,000 and therefore minor rounding
differences may result in the tables. Growth metrics are provided on a
constant currency basis unless otherwise stated. The Group has presented
certain financial information on a constant currency basis. This is calculated
by translating the results for the current financial year and prior financial
year at a fixed 'constant currency' exchange rate, which is done to measure
the organic performance of the Group. Growth rates for our reporting regions
and service segments are provided in constant currency as this better
represents the performance of the business.
Airtel Africa plc
Results for the year ended 31 March 2024
Consolidated Financial Statements
Consolidated Statement of Comprehensive Income
(All amounts are in US$ millions unless stated otherwise)
Notes For the year ended
31 March 2024 31 March 2023
Income
Revenue 5 4,979 5,255
Other income 21 13
5,000 5,268
Expenses
Network operating expenses 926 1,027
Access charges 314 410
License fee and spectrum usage charges 244 241
Employee benefits expense 301 287
Sales and marketing expenses 576 521
Impairment loss on financial assets 5 14
Other operating expenses 206 193
Depreciation and amortisation 788 818
3,360 3,511
Operating profit 1,640 1,757
Finance costs
- Derivative and foreign exchange losses
Nigerian naira 1,070 224
Other currencies 189 114
- Other finance costs 482 414
Finance income (38) (29)
Share of profit of associate and joint venture accounted for using (0) (0)
equity method
(Loss)/profit before tax (63) 1,034
Income tax expense 7 26 284
(Loss)/profit for the year (89) 750
(Loss)/profit before tax (as presented above) (63) 1,034
Add: Exceptional items 6 807 -
Underlying profit before tax 744 1,034
(Loss)/profit after tax (as presented above) (89) 750
Add/(Less): Exceptional items 6 549 (161)
Underlying profit after tax 460 589
Notes For the year ended
31 March 2024 31 March 2023
(Loss)/profit for the year (continued from previous page) (89) 750
Other comprehensive income ('OCI')
Items to be reclassified subsequently to profit or loss:
Loss due to foreign currency translation differences (1,175) (350)
Gain on debt instruments at fair value through other comprehensive
0 -
Tax on above 2 (3)
Share of OCI of associate and joint venture accounted for (0) -
using equity method
(1,173) (353)
Items not to be reclassified subsequently to profit or loss:
Re-measurement gain/(loss) on defined benefit plans 0 (0)
Tax on above (0) 0
(0) 0
Other comprehensive loss for the year (1,173) (353)
Total comprehensive (loss)/income for the year (1,262) 397
(Loss)/profit for the year attributable to: (89) 750
Owners of the company (165) 663
Non-controlling interests 76 87
Other comprehensive loss for the year attributable to: (1,173) (353)
Owners of the company (1,141) (341)
Non-controlling interests (32) (12)
Total comprehensive (loss)/income for the year attributable to: (1,262) 397
Owners of the company (1,306) 322
Non-controlling interests 44 75
(Loss)/earnings per share
Basic 8 (4.4 cents) 17.7 cents
Diluted 8 (4.4 cents) 17.7 cents
Consolidated Statement of Financial Position
(All amounts are in US$ millions unless stated otherwise)
Notes As of
31 March 2024 31 March 2023
Assets
Non-current assets
Property, plant and equipment 9 1,827 2,295
Capital work-in-progress 9 232 212
Right of use assets 1,483 1,497
Goodwill 10 & 11 2,569 3,516
Other intangible assets 725 813
Intangible assets under development 4 399
Investments accounted for using equity method 5 4
Financial assets
- Investments 0 0
- Derivative instruments 0 9
- Others 30 34
Income tax assets (net) 5 1
Deferred tax assets (net) 543 337
Other non-current assets 146 151
7,569 9,268
Current assets
Inventories 26 15
Financial assets
- Investments 2 -
- Derivative instruments 10 4
- Trade receivables 184 145
- Cash and cash equivalents 12 620 586
- Other bank balances 12 353 131
- Balance held under mobile money trust 737 616
- Others 106 142
Other current assets 254 259
2,292 1,898
Total assets 9,861 11,166
Notes As of
31 March 2024 31 March 2023
Current liabilities
Financial liabilities
- Borrowings 14 1,426 945
- Lease liabilities 357 395
- Derivative instruments 144 5
- Trade payables 422 460
- Mobile money wallet balance 722 582
- Others 440 533
Provisions 78 83
Deferred revenue 123 183
Current tax liabilities (net) 119 194
Other current liabilities 215 192
4,046 3,572
Net current liabilities (1,754) (1,674)
Non-current liabilities
Financial liabilities
- Borrowings 14 947 1,233
- Lease liabilities 1,732 1,652
- Put option liability 552 569
- Derivative instruments 33 43
- Others 146 147
Provisions 22 21
Deferred tax liabilities (net) 67 108
Other non-current liabilities 16 13
3,515 3,786
Total liabilities 7,561 7,358
Net Assets 2,300 3,808
Equity
Share capital 13 1,875 3,420
Reserves and surplus 285 215
Equity attributable to owners of the company 2,160 3,635
Non-controlling interests ('NCI') 140 173
Total equity 2,300 3,808
The accompanying notes form an integral part of these interim condensed
consolidated financial statements.
For and on behalf of the Board of Airtel Africa plc
Olusegun Ogunsanya
Chief Executive Officer
08 May 2024
Consolidated Statement of Changes in Equity
(All amounts are in US$ millions unless stated otherwise)
Equity attributable to owners of the company
Share Capital Reserves and Surplus Equity attributable to owners of the company
Amount Retained earnings Transactions with NCI reserve Other components of equity Non-controlling interests (NCI) Total
equity
No. of shares ((1))
Total
As of 1 April 2022 6,839,896,081 3,420 3,436 (942) (2,412) 82 3,502 147 3,649
Profit for the year - - 663 - - 663 663 87 750
Other comprehensive income/(loss) - - (0) - (341) (341) (341) (12) (353)
Total comprehensive income/(loss) - - 663 - (341) 322 322 75 397
Transaction with owners of equity
Employee share-based payment reserve - - (2) - - (2) (2) - (2)
Purchase of own shares (net) - - - - (5) (5) (5) - (5)
Transactions with NCI - - - 13 - 13 13 3 16
Dividend to owners of the company - - (195) - - (195) (195) - (195)
Dividend (including tax) to NCI ((2)) - - - - - - - (52) (52)
As of 31 March 2023 6,839,896,081 3,420 3,902 (929) (2,758) 215 3,635 173 3,808
(Loss)/Profit for the year - - (165) - - (165) (165) 76 (89)
Other comprehensive income/(loss) (refer note 4(b) and 4(c)) - - 0 - (1,141) (1,141) (1,141) (32) (1,173)
Total comprehensive income/(loss) - - (165) - (1,141) (1,306) (1,306) 44 (1,262)
Transaction with owners of equity
Employee share-based payment reserve - - (1) - 2 1 1 - 1
Purchase of own shares (net) - - - - 1 1 1 - 1
Cancellation of deferred shares (refer note 4(d)) (3,081,744,577) (1,541) 1,541 - - 1,541 - - -
Ordinary shares buy back programme (refer note 4(f)) (7,389,855) (4) (9) - (37) (46) (50) - (50)
Transactions with NCI ((3)) - - - 91 - 91 91 (12) 79
Dividend to owners of the company (refer note 4(a)) - - (212) - - (212) (212) - (212)
Dividend (including tax) to NCI((2)) - - - - - - - (65) (65)
As of 31 March 2024 3,750,761,649 1,875 5,056 (838) (3,933) 285 2,160 140 2,300
( )
(1) Includes ordinary & deferred shares till 31 March 2023.
Deferred shares have been cancelled during the year ended 31 March 2024 as
explained in note 4(d), therefore as on 31 March 2024, it includes only
ordinary shares. Refer to note 13 for further details.
(2) Dividend to non-controlling interests include tax of $4m (31
March 2023: $3m).
(3) This primarily relates to:
- Excess of consideration over proportionate net assets, on sale of 10.89%
shares of Airtel Uganda to minority shareholders under IPO of Airtel Uganda
amounting to $49m, as explained in note 4(e).
- Reversal of put option liability by $24m (31 March 2023: $16m) for dividend
distribution to put options non-controlling interest holders (any dividend
paid to the put option non-controlling interest holders is adjustable against
the put option liability based on the put option arrangement).
- Adjustment of $18m to non-controlling interests pertaining to Airtel Mobile
Commerce B.V. on account completion of restructuring period and consequent
release of escrow shares as per agreement with non-controlling interest
holders
Consolidated Statement of Statement Flows For the year ended
(All amounts are in US$ millions unless stated otherwise)
31 March 2024 31 March 2023
Cash flows from operating activities
Profit before tax (63) 1,034
Adjustments for -
Depreciation and amortization 788 818
Finance income (38) (29)
Finance costs
- Derivative and foreign exchange losses
Nigerian naira 1,070 224
Other currencies 189 114
- Other finance costs 482 414
Share of profit of associate and joint venture accounted for using (0) (0)
equity method
Other non-cash adjustments((1)) 0 2
Operating cash flow before changes in working capital 2,428 2,577
Changes in working capital
Increase in trade receivables (79) (45)
Increase in inventories (16) (13)
Increase in trade payables 56 9
Increase in mobile money wallet balance 207 120
Increase/(decrease) in provisions 3 (32)
Increase in deferred revenue 21 37
Increase in other financial and non-financial liabilities 76 113
Increase in other financial and non-financial assets (93) (140)
Net cash generated from operations before tax 2,603 2,626
Income taxes paid (344) (397)
Net cash generated from operating activities (a) 2,259 2,229
Cash flows from investing activities
Purchase of property, plant and equipment and capital (868) (779)
work-in-progress
Purchase of intangible assets and intangible assets under development (161) (502)
Purchase of other short term investments (2) -
Maturity of deposits with bank 731 350
Investment in deposits with bank (961) (126)
Investment in joint venture - (0)
Dividend received from associate - 2
Interest received 33 29
Net cash used in investing activities (b) (1,228) (1,026)
Cash flows from financing activities
Purchase of shares under buy-back programme (9) -
Purchase of own shares by ESOP trust (2) (8)
Proceeds from sale of shares to NCI 53 -
Proceeds from borrowings 713 906
Repayment of borrowings (550) (1,018)
Repayment of lease liabilities (324) (279)
Dividend paid to non-controlling interests (59) (75)
Dividend paid to owners of the company (212) (195)
Payment of deferred spectrum liability (21) (21)
Interest on borrowings, lease liabilities and other liabilities (440) (400)
Inflow/(outflow) on maturity of derivatives (net) 7 (49)
Net cash used in financing activities (c) (844) (1,139)
Increase in cash and cash equivalents during the year (a+b+c) 187 64
Currency translation differences relating to cash and cash equivalents (128) (70)
Cash and cash equivalent as at beginning of the year 841 847
Cash and cash equivalents as at end of the year (refer to Note 12) ((2)) 900 841
((1)) For the year ended 31 March 2024 and 31 March 2023, this mainly includes
movements in impairment of trade receivable and other provisions.
((2)) Includes balances held under mobile money trust of $737m (March 2023:
$616m) on behalf of mobile money customers which are not available for use by
the Group.
Notes to Consolidated Financial Statements
(All amounts are in US$ millions unless stated otherwise)
1. Corporate information
Airtel Africa plc ('the company') is a public company limited by shares
incorporated and domiciled in the United Kingdom (UK) under the Companies Act
2006 and is registered in England and Wales (registration number 11462215).
The registered address of the company is First Floor, 53/54 Grosvenor Street,
London, W1K 3HU, United Kingdom. The company is listed both on the London
Stock Exchange (LSE) and Nigerian Stock Exchange (NGX). The company is a
subsidiary of Airtel Africa Mauritius Limited ('the parent'), a company
registered in Mauritius. The registered address of the parent is c/o IQ EQ
Corporate Services (Mauritius) Ltd., 33, Edith Cavell Street, Port Louis,
11324, Mauritius.
The company, together with its subsidiary undertakings (hereinafter referred
to as 'the Group') has operations in Africa. The principal activities of the
Group, its associate and its joint venture primarily consist of the provision
of telecommunications and mobile money services.
2. Basis of preparation
The results for the year ended 31 March 2024 are an abridged statement of the
full annual report which was approved by the Board of Directors and signed on
its behalf on 08 May 2024. The consolidated financial statements within the
full annual report are prepared in accordance with the requirements of the
Companies Act 2006 and International Financial Reporting Standards as issued
by the International Accounting Standards Board (IASB) and approved for use in
the United Kingdom (UK) by the UK Accounting Standards Endorsement Board
(UKEB).
The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 March 2024 and 2023, but is derived
from those accounts. Statutory accounts for March 2023 have been delivered to
the Registrar of Companies and those for 2024 will be delivered following the
company's annual general meeting.
The financial information included in this release announcement does not
itself contain sufficient information to comply with IFRS. The company will
publish full financial statements that comply with IFRS, in June 2024.
All the amounts included in the financial statements are reported in United
States dollars, with all values rounded to the nearest millions ($m) except
when otherwise indicated. Further, amounts which are less than half a million
are appearing as '0'.
The accounting policies as set out in the following paragraphs of this note
have been consistently applied by all the Group entities to all the periods
presented in these financial statements. During the year, the Group has
changed the classification of distribution costs relating to its mobile money
business to better reflect the nature of these costs, reclassifying costs
previously included in other operating expenses to the sales and marketing
expenses in the consolidated statement of comprehensive income.
3. Going concern
These consolidated financial statements have been prepared on a going concern
basis. In making this going concern assessment, the Group has considered cash
flow projections (including scheduled bond repayment of $550m in May 2024 and
repayment of other loans due for repayment in the going concern period) to
June 2025 (going concern assessment period) under both a base case and
reasonable worst-case scenarios including a reverse stress test. This
assessment takes into consideration its principal risks and uncertainties
including a reduction in revenue and EBITDA and a devaluation of the various
currencies in the countries in which the Group operates including the Nigerian
naira. As part of this evaluation, the Group has considered available ways to
mitigate these risks and uncertainties and has also considered committed
undrawn facilities of $351m expiring beyond the going concern assessment
period, which will fulfil the Group's cash flow requirement under both the
base and reasonable worst-case scenarios.
Having considered all the above-mentioned factors impacting the Group's
businesses, the impact of downside sensitivities, and the mitigating actions
available to the group including a reduction and deferral of capital
expenditure, the directors are satisfied that the Group has adequate resources
to continue its operational existence for the foreseeable future. Accordingly,
the directors continue to adopt the going concern basis of accounting in
preparing the consolidated financial statements.
4. Significant transactions/new developments
a) On 10 May 2023, the directors recommended, and shareholders
approved on 04 July 2023, a final dividend of 3.27 cents per ordinary share
for the year ended 31 March 2023, which was paid on 26 July 2023 to the
holders of ordinary shares on the register of members at the close of business
on 23 June 2023.
An interim dividend of 2.38 cents per share was also approved by the Board on
29 October 2023, which has been paid on 15 December 2023.
b) In June 2023, the Central Bank of Nigeria (CBN) announced changes to
the operations in the Nigerian Foreign Exchange Market, including the
abolishment of segmentation, with all segments now collapsing into the
Investors and Exporters (I&E) window and the reintroduction of the
'Willing Buyer, Willing Seller' model at the I&E window.
As a result of this CBN decision, the Nigerian naira devalued against the US
dollar by approximately 62% (USD appreciation of 38%) in the month of June
2023 where the exchange rate moved to 752 naira per USD as against the opening
rate of 465 naira per USD.
The after-effects of the CBN announcement continued to impact the exchange
rate materially during January 2024 when the Nigerian naira to the US dollar
moved to 1,414 per USD which was also above the threshold percentage as per
Group's exceptional item policy. Over February and March 2024, the Nigeria
naira to US dollar moved back to close at 1,303 per USD which was in effect a
part reversal of the losses seen in January 2024.
This resulted in a material impact on the Group's financial results arising
from the translation of monetary items at closing exchange rates leading to
material derivative and foreign exchange losses. During the year, the
devaluation of Nigerian naira has resulted in derivative and foreign exchange
losses of $1,070m.
In line with the Group's policy on exceptional items and alternative
performance measures as described in 'Note on exceptional items' on page 55,
the impact of the devaluation pertaining to the months of June 2023 and
January to March 2024 meet the criteria to be presented as exceptional as per
the Group's exceptional item policy and is of such size, nature and incidence
that their exclusion is considered necessary to explain the underlying
performance of the Group and to improve the comparability between periods.
Therefore, the Group has presented as an exceptional items:
· the derivative and foreign exchange losses pertaining to the months of
June 2023 and January to March 2024, amounting to $770m, and
· the corresponding tax impact of $250m.
Since the devaluation in other months did not meet the threshold criteria as
per the Group's policy on exceptional items, the Group has not presented the
impact pertaining to these months as exceptional.
Additionally, on account of the translation from naira to US dollar
(presentation currency of the Group) of all the assets and liabilities
(including Goodwill) pertaining to the Group's Nigerian subsidiaries using the
closing exchange rate at 31 March 2024 and income and expenses at the average
exchange rates for the year ended 31 March 2024, the Group incurred a foreign
exchange translation loss recorded in other comprehensive income amounting to
$944m for the year ended 31 March 2024.
c) In November 2023, the Reserve Bank of Malawi (RBM) announced
structural changes to the foreign exchange market with its decision to adjust
the exchange rate from selling rate of MWK 1,180 to a selling rate of MWK
1,700 to the US dollar with effect from 9 November 2023. As part of the
structural changes, the RBM started authorizing dealer banks to freely
negotiate exchange rates to trade with their clients and amongst themselves,
notwithstanding any limitations previously in place. This change announced by
the RBM is a structural and material change (i.e. more than threshold
percentage devaluation in a month) and in line with the Group's policy on
exceptional items and alternative performance measures as described in 'Note
on exceptional items' on page 55, the impact of this change is of such size,
nature and incidence that its exclusion is considered necessary to explain the
underlying performance of the Group and improve the comparability between
periods. Consequently, the Group has presented the impact arising in November
2023 amounting to $37m and the corresponding tax benefit $8m as an exceptional
item.
Additionally, on account of translation from MWK to US dollar (presentation
currency of the Group) of all the assets and liabilities (including Goodwill)
pertaining to the Group's subsidiaries in Malawi using the closing exchange
rate at 31 March 2024 and income and expenses at the average exchange rates
for the year ended 31 March 2024, the Group incurred a foreign exchange
translation loss recorded in other comprehensive income amounting to $169m for
the year ended 31 March 2024.
d) During the year ended 31 March 2024, the company completed the
cancellation and extinction of all of its deferred shares (3,081,744,577
shares) of USD $0.50 nominal value each (the "Capital Reduction"), which was
approved by shareholders at the annual general meeting of the company held on
4 July 2023, and was sanctioned by the High Court of England and Wales (the
"High Court") on 15 August 2023 and became effective on 18 August 2023 on its
certification by the Companies House. The effect of the Capital Reduction is
to create additional distributable reserves of $1,541m which will be available
to the company going forward and may be used to facilitate returns to
shareholders in the future, whether in the form of dividends, distributions,
or purchases of the company's own shares. Accordingly, and in line with the
High Court approval, the carrying value of the deferred shares ($1,541m) has
been transferred to retained earnings.
e) On 29 August 2023, Airtel Uganda Limited issued a prospectus in
relation to the offer for sale of 8,000,000,000 ordinary shares, representing
20% of Airtel Uganda Limited on the Uganda Stock Exchange (USE) in-line with
the 20% minimum public listing obligation for all National Telecom Operators
under the current Uganda Communications (Fees & Fines) (Amendment)
Regulations 2020.
In November 2023, Airtel Uganda Limited completed an initial public offering
(IPO) and listed on the Main Investment Market Segment of the Uganda
Securities Exchange (USE) with a total of 4.4 billion shares (10.89% of Airtel
Uganda Limited's total share capital) transferred to minority shareholders.
Airtel Uganda received a 3-year waiver from the Uganda Securities Exchange
from the requirement to transfer the remaining 9.11% required to meet the 20%
shareholding listing requirement.
This being a transaction with non-controlling shareholders, the impact of
$49m (excess of consideration over proportionate net assets net of related
transaction costs) has been taken into 'Transaction with NCI reserve' in the
consolidated statement of changes in equity.
f) On 01 March 2024, the Company announced the commencement of its
share buy-back programme. As part of the programme it entered into an
agreement with Citigroup Global Markets Limited ("Citi") to conduct the first
tranche of the buy-back amounting to a maximum of $50m and carry out on-market
purchases of its ordinary shares with the Company subsequently purchasing its
ordinary shares from Citi. For the year ended 31 March 2024, the Company
bought-back and cancelled 7,389,855 shares, resulting in 3,750,761,649
ordinary shares outstanding as at 31 March 2024. The purchase price of the
shares bought-back was $9m and the Company carries a liability of $41m as part
of 'other financial liabilities' relating to the remaining buy-back agreement
with Citi. The nominal value ($0.5 per share) of the cancelled shares,
amounting to $4m, has been transferred to the capital redemption reserve.
5. Segmental information
The Group's segment information is provided on the basis of geographical
clusters and products to the Group's chief executive officer (chief operating
decision maker - 'CODM') for the purposes of resource allocation and
assessment of performance.
The Group's operating segments are as follows:
Nigeria Mobile Services - Comprising of mobile service operations in Nigeria;
East Africa Mobile Services - Comprising of mobile service operations in
Uganda, Zambia, Kenya, Tanzania, Malawi and Rwanda;
Francophone Africa Mobile Services - Comprising of mobile service operations
in DRC, Gabon, Chad, Niger, Congo B, Madagascar and Seychelles;
Mobile money services*- Comprising of mobile money services across the Group.
* Mobile money services segment consolidates the results of mobile money
operations from all operating entities within the Group. Airtel Money Commerce
B.V. (AMC BV) is the holding company for all mobile money services for the
Group, and as of 31 March 2024, it controls all mobile money operations
excluding operations in Nigeria. It is management's intention to continue work
to transfer the Nigerian mobile money services operations into AMC BV, subject
to local regulatory approvals.
Each segment derives revenue from the respective services housed within each
segment, as described above. Expenses, assets and liabilities primarily
related to the corporate headquarters and centralised functions of the Group
are presented as unallocated Items.
The amounts reported to CODM are based on the accounting principles used in
the preparation of the financial statements. Each segment's performance is
evaluated based on segment revenue and segment result.
The segment result is Underlying EBITDA (defined as operating profit/(loss)
for the period before depreciation, amortisation and exceptional items). This
is the measure reported to the CODM for the purpose of resource allocation and
assessment of segment performance. During the year ended 31 March 2024 and 31
March 2023, the definition of EBITDA is equal to underlying EBITDA since there
are no exceptional items pertaining to EBITDA and therefore EBITDA is
presented in the segment information below.
Inter-segment pricing and terms are reviewed and changed by management to
reflect changes in market conditions and changes to such terms are reflected
in the period in which the changes occur.
The 'Eliminations' column comprises inter-segment revenues eliminated upon
consolidation.
Segment assets and segment liabilities comprise those assets and liabilities
directly managed by each segment. Segment assets primarily include
receivables, property, plant and equipment, capital work in progress,
right-to-use assets, intangibles assets, inventories and cash and cash
equivalents. Segment liabilities primarily include operating liabilities.
Segment capital expenditure comprises investment in property, plant and
equipment, capital work in progress, intangible assets (excluding licenses)
and capital advances.
Investment elimination upon consolidation and resulting goodwill impacts are
reflected in the 'Eliminations' column.
Summary of the segmental information and disaggregation of revenue for the
year ended and as of 31 March 2024 is as follows:
Mobile money Others
Nigeria mobile services East Africa mobile services Francophone Africa mobile services (unallocated) Total
Eliminations
Revenue from external customers
Voice revenue 710 850 619 - - - 2,179
Data revenue 654 621 459 - - - 1,734
Mobile money revenue ((1)) - - - 649 - - 649
Other revenue ((2)) 136 138 129 - 14 - 417
Total revenue from external customers 1,500 1,609 1,207 649 14 - 4,979
Inter-segment revenue 3 13 6 188 8 (218) -
Total revenue 1,503 1,622 1,213 837 22 (218) 4,979
EBITDA 811 788 512 436 (119) - 2,428
Less:
Depreciation and amortisation 264 287 209 18 10 - 788
Finance costs
- Derivative and foreign exchange losses
Nigerian naira 1,070
Other currencies 189
- Other finance costs 482
Finance income (38)
Share of profit of associate and joint venture accounted for using equity (0)
method
Loss before tax (63)
Other segment items
Capital expenditure 252 284 157 27 17 - 737
As of 31 March 2024
Segment assets 1,675 2,336 1,647 1,151 20,774 (17,722) 9,861
Segment liabilities 1,890 2,569 2,346 929 9,338 (9,511) 7,561
Investment in associate and joint venture accounted for using equity method - - 5 - - - 5
(included in segment assets above)
((1)) Mobile money revenue is net of inter-segment elimination of $188m mainly
for commission on sale of airtime. It includes $126m pertaining to East Africa
mobile services and the balance $62m pertaining to Francophone Africa mobile
service.
((2)) Other revenue includes messaging, value added services, enterprise, site
sharing and handset sale revenue.
Summary of the segmental information and disaggregation of revenue for the
year ended 31 March 2023 is as follows:
Mobile money Others
Nigeria mobile services East Africa mobile services Francophone Africa mobile services (unallocated) Total
Eliminations
Revenue from external customers
Voice revenue 1,052 835 604 - - - 2,491
Data revenue 884 537 366 - - - 1,787
Mobile money revenue ((1)) - - - 540 - - 540
Other revenue ((2)) 189 124 114 - 10 - 437
Total revenue from external customers 2,125 1,496 1,084 540 10 - 5,255
Inter-segment revenue 3 12 6 152 4 (177) -
Total revenue 2,128 1,508 1,090 692 14 (177) 5,255
EBITDA 1,101 755 480 344 (105) - 2,575
Less:
Depreciation and amortisation 344 260 190 17 7 - 818
Finance costs
- Derivative and foreign exchange losses
Nigerian naira 224
Other currencies 114
- Other finance costs 414
Finance income (29)
Share of profit of associate and joint venture accounted for using equity (0)
method
Profit before tax 1,034
Other segment items
Capital expenditure 293 256 151 33 15 - 748
As of 31 March 2023
Segment assets 2,634 2,255 1,599 945 25,485 (21,752) 11,166
Segment liabilities 2,193 2,393 2,359 742 12,839 (13,168) 7,358
Investment in associate and joint venture accounted for using equity method - 4 - - - 4
(included in segment assets above)
((1)) Mobile money revenue is net of inter-segment elimination of $152m mainly
for commission on sale of airtime. It includes $103m pertaining to East Africa
mobile services and balance $49m pertaining to Francophone Africa mobile
services.
((2)) Other revenue includes messaging, value added services, enterprise, site
sharing and handset sale revenue.
Geographical information disclosure based on the physical location of
non-current assets (PPE, CWIP, ROU, Intangible assets including goodwill and
intangible assets under development):
As of
31 March 2024 31 March 2023
United Kingdom 0 0
Nigeria 1,320 2,379
Netherlands (including Goodwill) 2,517 3,464
Others((1)) 3,003 2,889
Total 6,840 8,732
(1) majorly includes other African countries where the Group operates.
6. Exceptional items
Underlying profit before tax excludes the following exceptional
items
For the year ended
31 March 2024 31 March 2023
Profit before tax (63) 1,034
Add: Exceptional items
Finance costs
- Derivative and foreign exchange losses -
Nigerian naira (refer to note 4(b)) 770
Malawian kwacha (refer to note 4(c)) 37
807 -
Underlying profit before tax 744 1,034
Underlying profit after tax excludes the following exceptional items:
( )
For the year ended
31 March 2024 31 March 2023
(Loss)/Profit after tax (89) 750
-Exceptional items (as above) 807 -
- Tax on above exceptional items
Nigerian naira (refer to note 4(b)) (250) -
Malawian kwacha (refer to note 4(c)) (8) -
- Deferred tax asset recognition((1)) - (161)
549 (161)
Underlying profit after tax 460 589
(1) During the year ended 31 March 2023, the Group had recognised deferred tax
assets in Airtel Kenya. Airtel Kenya had carried forward losses and temporary
differences on which deferred tax was not previously recognised. Considering
Airtel Kenya's profitability trends, that tax losses were utilised and on the
basis of forecast future taxable profits, the Group had determined that it was
probable that taxable profits would be available against which the tax losses
and temporary differences could be utilised. Consequently, the deferred tax
asset recognition criteria were met, leading to the recognition of an
additional deferred tax asset of $117m during the year ended 31 March 2023.
Additionally, the Group had also recognised deferred tax assets on initial
temporary differences for an extended period in Airtel Tanzania and Airtel DRC
amounting to $19m and $25m, respectively based on updated probability of
future taxable profits in these subsidiaries.
Profit attributable to non-controlling interests amounting to $76m (31 March
2023: $87m) includes a loss of $4m (31 March 2023: gain of $10m) during the
year ended 31 March 2024, relating to the above exceptional items.
7. Income tax
For the year ended
31 March 2024 31 March 2023
Current tax 332 408
Deferred tax (306) (124)
Income tax expense 26 284
8. Earnings per share ('EPS')
The details used in the computation of basic EPS:
For the year ended
31 March 2024 31 March 2023
(Loss)/profit for the year attributable to owners of the company (165) 663
Weighted average ordinary shares outstanding for basic EPS((1)) 3,750,641,207 3,751,665,898
Basic (Loss)/earnings per share (4.4 cents) 17.7 cents
The details used in the computation of diluted EPS: For the year ended
31 March 2024 31 March 2023
(Loss)/profit for the year attributable to owners of the company (165) 663
Weighted average ordinary shares outstanding for diluted EPS((1)(2)) 3,750,641,207 3,756,867,853
Diluted (Loss)/earnings per share (4.4 cents) 17.7 cents
(1) The difference between the basic and diluted number of shares at the
end of March 2023 being 5,201,955 shares relates to awards committed but not
yet issued under the Group's share-based payment schemes.
(2) The 6,017,906 shares granted under different share-based plans are not
included in the calculation of diluted earnings per share for the year ended
31 March 2024 as these are anti-dilutive on account of losses during the
period. These options could potentially dilute basic earning per share in
future.
9. Property, plant and equipment ('PPE')
The following table presents the reconciliation of changes in the carrying
value of PPE for the year ended 31 March 2024 and 31 March 2023::
Leasehold Improvements Building Land Plant and Equipment ((2)) Furniture & Fixture Vehicles Office Equipment Computer Total Capital work in progress ((3))
Gross carrying value
Balance as of 1 April 2022
49 47 26 3,045 62 22 55 703 4,009 189
Additions / capitalization 3 - 0 614 17 0 15 51 700 735
Disposals / adjustments ((1)) (0) - - (20) (3) (0) (3) (5) (31) (700)
Foreign currency translation impact (3) (4) (1) (390) (6) (0) (6) (53) (463) (12)
Balance as of 31 March 2023 49 43 25 3,249 70 22 61 696 4,215 212
Additions / capitalization 1 - 1 556 10 - 15 45 628 722
Disposals / adjustments ((1)) - (1) - (29) (5) - - (4) (39) (628)
Foreign currency translation impact (6) (9) (2) (1,394) (14) (1) (19) (144) (1,589) (74)
Balance as of 31 March 2024 44 33 24 2,382 61 21 57 593 3,215 232
Accumulated Depreciation
Balance as of 1 April 2022 44 20 0 1,003 23 20 32 653 1,795 -
Charge 1 2 - 374 13 0 13 32 435 -
Disposals / adjustments ((1)) (0) - - (18) (3) (0) (1) (5) (27) -
Foreign currency translation impact (3) (3) (0) (222) (3) (0) (5) (47) (283) -
Balance as of 31 March 2023 42 19 - 1,137 30 20 39 633 1,920 -
Charge 2 2 - 341 12 0 15 34 406 -
Disposals / adjustments ((1)) (0) (0) - (35) (5) 1 3 1 (35) -
Foreign currency translation impact (6) (5) - (739) (9) (1) (14) (129) (903) -
Balance as of 31 March 2024 38 16 - 704 29 20 43 539 1,388 -
Net carrying value
As of 1 April 2022 5 27 26 2,042 39 2 23 50 2,214 189
As of 31 March 2023 7 24 25 2,112 40 2 22 63 2,295 212
As of 31 March 2024 6 17 24 1,679 31 1 15 54 1,827 232
-
(1) Related to the reversal of gross carrying value and accumulated
depreciation on retirement/ disposal of PPE and reclassification from one
category of asset to another.
(2) Includes PPE secured against the Group's borrowings outstanding of
$139m and $44m as of 31 March 2024 and 31 March 2023 respectively.
(3) The carrying value of capital work-in-progress as of 31 March 2024 and 31
March 2023 mainly pertains to plant and equipment.
10. Goodwill
The following table presents the reconciliation of changes in the carrying
value of goodwill for the year ended 31 March 2024 and 31 March 2023
Goodwill
Balance as of 1 April 2022 3,827
Foreign currency translation impact (311)
Balance as of 31 March 2023 3,516
Balance as of 1 April 2023 3,516
Foreign currency translation impact (947)
Balance as of 31 March 2024 2,569
11. Impairment review
The carrying amount of goodwill is attributed to the following groups of CGUs,
which are also the Group's operating segments:
As of
31 March 2024 31 March 2023
Nigeria Mobile Services 318 900
East Africa Mobile Services 834 927
Francophone Africa Mobile Services 500 503
Mobile Money Services 917 1,186
2,569((1)) 3,516
((1))The decrease in carrying amount of goodwill by $947m is due to foreign
currency translation differences. Refer to note 4(b) and 4(c).
The Group tests goodwill for impairment annually on 31 December. The carrying
value of goodwill as of 31 December 2023 was $436m, $833m, $503m and $967m for
Nigeria mobile services, East Africa mobile services and Francophone Africa
mobile services and Mobile money services, respectively. The recoverable
amounts of the above group of CGUs are based on value-in-use, which are
determined based on ten-year business plans that have been approved by the
Board.
Whilst the Board performed a long-term viability assessment over a three-year
period, for the purposes of assessing liquidity, the Group has adopted a
ten-year plan for the purpose of impairment testing due to the following
reasons:
• The Group operates in emerging markets where the
telecommunications and mobile money markets are underpenetrated when compared
to developed markets. In these emerging markets, short-term plans (for
example, five years) are not indicative of the long-term future prospects and
performance of the Group.
• The life of the Group's regulatory telecom licences and network
assets are at an average of ten years, the spectrum renewals happen for a
period of ten years or more and in general the replacement of technology
happens after a similar duration, and
• The potential opportunities of the emerging African telecom
sector, which is mostly a two-three player market with lower smartphone
penetration.
Accordingly, the Board approved that this planning horizon reflects the
assumptions for medium- to long-term market developments, appropriately covers
market dynamics of emerging markets and better reflects the expected
performance in the markets in which the Group operates.
While using the ten-year plan, the Group also considers external market data
to support the assumptions used in such plans, which is generally available
only for the first five years. Considering the degree of availability of
external market data beyond year five, the Group has performed sensitivity
analysis to assess the impact on impairment of using a five-year plan. The
results of this sensitivity analysis demonstrate that the initial five-year
plan with appropriate changes, including long-term growth rates applied at the
end of this period does not result in any impairment and does not decrease the
recoverable value by more than 10% in any of the group of CGUs as compared to
the recoverable value using the ten-year plan. Further, the Group is confident
that projections for years six to ten are reliable and can demonstrate its
ability, based on past experience, to forecast cash flows accurately over a
longer period. Accordingly, the Board has approved and the Group continues to
follow a consistent policy of using an initial forecast period of ten years
for the purpose of impairment testing.
The nominal cash flows used in the impairment tests reflect the Group's
current assessment of the impact of climate change and associated commitments
the Group has made. Based on the analysis conducted so far, the Group is
satisfied that the impact of climate change does not lead to an impairment as
of 31 December 2023 and is adequately covered as part of the sensitivities
disclosed below.
The nominal cash flows beyond the planning period are extrapolated using
appropriate long-term terminal growth rates. The long-term terminal growth
rates used do not exceed the long-term average growth rates of the respective
industry and country in which the entity operates and are consistent with
internal/external sources of information.
The inputs used in performing the impairment assessment at 31 December 2023
were as follows:
Assumptions Nigeria Mobile Services East Africa Mobile Services Francophone Africa Mobile Services Mobile Money Services
Pre-tax Discount Rate 33.55% 21.76% 22.18% 23.59%
Capital expenditure range (as a percentage of revenue) 5% - 18% 12% - 28% 10% -15% 2%-5%
Long term growth rate 11.00% 7.74% 6.81% 7.79%
As of 31 December 2023, the impairment testing did not result in any
impairment in the carrying amount of goodwill in any group of CGUs.
The key assumptions in performing the impairment assessment were as follows:
Assumptions Basis of assumptions
Discount rate Nominal discount rate reflects the market assessment of the risks specific to
the group of CGUs and are estimated based on the weighted average cost of
capital for respective CGUs.
Capital expenditure The cash flow forecasts of capital and spectrum licences expenditure are
based on experience after considering the expenditure required to meet
coverage, licence and capacity requirements relating to voice, data and mobile
money services.
Long-term growth rates The growth rates into perpetuity used are in line with the nominal long-term
average growth rates of the respective industry and country in which the
entity operates and are consistent with the internal / external sources of
information.
As of 31 December 2023, impairment testing did not result in any impairment in
the carrying amount of goodwill in any group of CGUs. The results of the
impairment tests using these rates show that the recoverable amount exceeds
the carrying amount by $1,263m for Nigeria mobile services (76%), $2,211m for
East Africa mobile services (92%), $994m for Francophone Africa mobile
services (64%) and $3,410m for Mobile money (328%), respectively. The Group,
therefore, concluded that no impairment was required to the goodwill held
against each group of CGUs. Subsequent to December 2023, the Group has also
performed indicator testing for impairment of goodwill and has concluded that
there are no indicators of impairment (including on account of devaluation of
Nigeria naira).
Sensitivity in discount rate and capital expenditure
Management believes that no reasonably possible change in any of the key
assumptions would cause the difference between the carrying value and
recoverable amount for any cash-generating unit to be materially different
from the recoverable value in the base case. The table below sets out the
breakeven pre-tax discount rate for each group of CGUs, which will result in
the recoverable amount being equal with the carrying amount for each group of
CGUs:
Nigeria Mobile Services East Africa Mobile Services Francophone Africa Mobile Services Mobile Money Services
Pre-tax Discount Rate 47.47% 32.37% 31.73% 67.24%
The table below presents the increase in isolation in absolute capital
expenditure as a percentage of revenue (across all years of the impairment
review) which will result in equating the recoverable amount with the carrying
amount for each group of CGUs:
Assumptions Nigeria Mobile Services East Africa Mobile Services Francophone Africa Mobile Services Mobile Money Services
Capital expenditure range (as a percentage of revenue) 7.12% 8.33% 6.07% 22.34%
No reasonably possible change in the terminal growth rate would cause the
carrying amount to exceed the recoverable amount.
12. Cash and bank balances ('C&CE')
Cash and cash equivalents As of
31 March 2024 31 March 2023
Balances with banks
- On current accounts 192 248
- Bank deposits with original maturity of three months or less 311 272
Balance held in wallets 111 64
Remittance in transit 5 1
Cash on hand 1 1
620 586
Other bank balances
As of
31 March 2024 31 March 2023
-Term deposits with banks with original maturity of 344 117
more than three months but less than 12 months
-Margin money deposits ((1)) 9 14
-Unpaid dividend 0 0
353 131
(1) Margin money deposits represent amount given as collateral for
legal cases and/or bank guarantees for disputed matters.
For the purpose of the statement of cash flows, cash and cash equivalents are
as follows:
As of
31 March 2024 31 March 2023
Cash and cash equivalents as per statement of financial position 620 586
Balance held under mobile money trust 737 616
Bank overdraft (457) (361)
900 841
13. Share capital
As of
31 March 2024 31 March 2023
Issued, subscribed and fully paid-up shares
3,750,761,649 ordinary shares of $0.50 each 1,875 1,879
(March 2023: 3,758,151,504) Refer to note 4(f)
Nil deferred shares of $0.50 - 1,541
each
(March 2023: 3,081,744,577) Refer to note 4(d)
1,875 3,420
Terms/rights attached to equity shares
The company has followings two classes of ordinary shares:
· Ordinary shares having par value of $0.50 per share. Each holder
of equity shares is entitled to cast one vote per share and carry a right to
dividends.
· Deferred shares of $0.50 each. These shares have been cancelled
and extinguished during the year ended 31 March 2024. For details, please
refer to note 4(d).
14. Borrowings
Non-current
As of
31 March 2024 31 March 2023
Secured
Term loans((1)) 124 35
124 35
Unsecured
Term loans((1)) 823 644
Non- convertible bonds ((1) (2)) - 554
823 1,198
947 1,233
Current
As of
31 March 2024 31 March 2023
Secured
Term loans((1)) 15 9
15 9
Unsecured
Non- convertible bonds((1)(2)) 550 -
Term loans((1)) 404 575
Bank overdraft 457 361
1,411 936
1,426 945
((1)) Includes debt origination costs.
((2)) It includes impact of fair value hedges.
15. Contingent liabilities and commitments
(i) Contingent liabilities
As of
31 March 2024 31 March 2023
(a) Taxes, duties and other demands (under adjudication / appeal / dispute)
-Income tax 13 16
-Value added tax 20 20
-Customs duty & Excise duty 9 9
-Other miscellaneous demands 7 5
(b) Claims under legal and regulatory cases including 76 82
arbitration matters
125 132
There are uncertainties in the legal, regulatory and tax environments in the
countries in which the Group operates and there is a risk of demands, which
may be raised based on current or past business operations. Such demands have
in the past been challenged and contested on merits with the relevant
authorities and appropriate settlements agreed.
The reduction of $7m in contingent liabilities during the year ended 31 March
2024 is primarily due to currency devaluation in subsidiaries.
The company and its subsidiaries are currently and may become, from time to
time, involved in a number of legal proceedings, including inquiries from, or
discussions with, governmental authorities that are incidental to their
operations. As of 31 March 2024, the Group's key contingent liabilities
include the following:
Claims under legal and regulatory cases including arbitration matter
One of the subsidiaries of the Group is involved in a dispute with one of its
vendors, with respect to invoices for services provided to a subsidiary under
a service contract. The original order under the contract was issued by the
subsidiary for a total amount of Central African franc (CFA) 473,800,000
(approximately $1m). In 2014, the vendor-initiated arbitration proceedings
claiming a sum of approximately CFA 1.9 billion (approximately $3m) based on
the court award. Multiple court proceeding have happened from 2015 onwards and
in mid-May 2019, the lower courts imposed a penalty of CFA 35 billion
(approximately $58m), based on which certain banks of the subsidiary were
summoned to release the funds. The subsidiary immediately lodged an appeal in
the Supreme Court for a stay of execution which was granted. Subsequently, the
vendor filed an appeal before the Common Court of Justice and Arbitration
(CCJA). Quite unexpectedly, in April 2020, the CCJA lifted the Supreme Court
stay of execution. In May 2021, the Commercial Division of the High Court
maintained new seizures carried out by the vendor. The subsidiary appealed and
the Court of Appeal determination on the seizures is pending as of April 2022.
In March 2022 the CCJA interpreted its judgment of March 2019 to indicate that
the daily penalty could not be maintained after its ruling dated 18 November
2018.
Separately, in December 2020 the subsidiary initiated criminal proceedings
against the vendor for fraud and deceitful conduct. In February 2021, the
investigating judge issued an order to cease the investigation which was
appealed by the Subsidiary. In March 2022, the Court Appeal quashed the
investigative judge order and allowed the investigation into the vendor to
resume. Testimony in the criminal investigation case happened on 26 April 2022
in front of the criminal court of appeal where the honorable judge has further
re-examined the facts from the representatives of the subsidiary against this
case. A stay of execution was issued on 30 May 2022 by the Chamber of
Accusation in favour of subsidiary till the time criminal investigation is
completed. In October 2023, the criminal court ordered the dismissal of the
case despite evidence of initial payment provided to the judge. The subsidiary
has appealed to the Supreme Court, and a decision is awaited.
As per the law no civil action can be initiated against the subsidiary while
criminal proceedings are ongoing.
On 30 November 2022 subsidiary was notified that plaintiff has appealed in the
court of cassation against the stay of execution dated 30 May 2022. Subsidiary
has filed its response on 26 January 2023. On 8 May 2023, the subsidiary filed
an application in the Commercial court to seek a cease-and-desist order
against the vendor. The matter is pending before the Commercial court, and the
substantial appeal has been transferred to CCJA in February 2024.
The Group still awaits the ruling on the merits of the case, and the outcome
of the criminal investigations, and until that time has disclosed this matter
as Contingent Liability for $58m (included in the closing contingent
liability). No provision has been made against this claim.
In addition to the individual matters disclosed above, in the ordinary course
of business, the Group is a defendant or co-defendant in various litigations
and claims which are immaterial individually.
Guarantees:
Guarantees outstanding as of 31 March 2024 and 31 March 2023 amounting to $12m
and $9m respectively have been issued by banks and financial institutions on
behalf of the Group. These guarantees include certain financial bank
guarantees which have been given for sub-judice matters and the amounts with
respect to these have been disclosed under capital commitments, contingencies
and liabilities, as applicable, in compliance with the applicable accounting
standards.
Commitments
Capital Commitments
The Group has contractual commitments towards capital expenditure (net of
related advances paid) of $317m and $313m as of 31 March 2024 and 31 March
2023 respectively.
16. Related Party disclosure
a) List of related parties
i) Parent company
Airtel Africa Mauritius Limited
ii) Intermediate parent entities
Network i2i Limited
Bharti Airtel Limited
Bharti Telecom Limited
iii) Ultimate controlling entity
Bharti Enterprises (Holding) Private Limited. It is held by private trusts of
Bharti family, with Mr. Sunil Bharti Mittal's family trust effectively
controlling the company.
iv) Associate:
Seychelles Cable Systems Company Limited
v) Joint Venture
Mawezi RDC S.A.
vi) Other entities with whom transactions have taken place during the
reporting period
a. Fellow subsidiaries
Nxtra Data Limited
Bharti Airtel Services Limited
Bharti International (Singapore) Pte Ltd
Bharti Airtel (UK) Limited
Bharti Airtel (France) SAS
Bharti Airtel Lanka (Private) Limited
Bharti Hexacom Limited
b. Other related parties
Singapore Telecommunication Limited
vii) Key Management Personnel ('KMP')
a. Executive directors
Olusegun Ogunsanya
Jaideep Paul
b. Non-Executive directors
Sunil Bharti Mittal
Awuneba Ajumogobia
Douglas Baillie (till October 2023)
John Danilovich
Andrew Green
Akhil Gupta
Shravin Bharti Mittal
Annika Poutiainen
Ravi Rajagopal
Kelly Bayer Rosmarin (till October 2023)
Tsega Gebreyes
c. Others
Ian Basil Ferrao
Michael Foley (till June 2023)
Razvan Ungureanu
Luc Serviant (till May 2023)
Daddy Mukadi Bujitu
Neelesh Singh (till December 2022)
Ramakrishna Lella
Edgard Maidou (till June 2023)
Rogany Ramiah
Stephen Nthenge
Vimal Kumar Ambat (till October 2022)
Ashish Malhotra (till June 2022)
Vinny Puri (till June 2022)
C Surendran (till December 2022)
Olubayo Augustus Adekanmbi (till November 2022)
Anthony Shiner (since June 2022)
Apoorva Mehrotra (since October 2022)
Oliver Fortuin (since June 2023)
Martin Frechette (since June 2023)
Carl Cruz (since May 2023)
Anwar Soussa (since August 2023)
Jacques Barkhuizen (since October 2023)
Sunil Taldar (since October 2023)
In the ordinary course of business, there are certain transactions among the
group entities and all these transactions are on arm's length basis. However,
the intra-group transactions and balances, and the income and expenses arising
from such transactions, are eliminated on consolidation. The transactions with
remaining related parties for the years ended 31 March 2024 and 2023
respectively, are described below:
The summary of transactions with the above-mentioned parties is as follows:
For the year ended
31 March 2024 31 March 2023
Relationship Parent company Intermediate parent entity Fellow subsidiaries Joint Venture Associates Other related parties Parent company Intermediate parent entity Fellow subsidiaries Joint Venture Associates Other related parties
Sale / rendering of services - 9 80 - - 0 - 13 77 - - -
Purchase / receiving of services - 16 57 - 1 - - 16 59 - 0 -
Rent and other charges - 1 - - - - - 1 - - - -
Guarantee and collateral fee paid - 2 - - - - - 3 - - - -
Purchase of assets - 0 - - - - - 3 - - - -
Dividend Paid 119 - - - - - 109 - - - - -
Dividend Received - - - - - - - - - - 2 -
The outstanding balance of the above-mentioned related parties are as follows:
Relationship Parent company Intermediate parent entity Fellow subsidiaries Joint venture Associate
As of 31 March 2024
Trade payables - 8 40 - 0
Trade receivables - 4 70 - -
Corporate guarantee fee payable - 1 - - -
Guarantees and collaterals taken (including performance guarantees)((1)) - 2,000 - - -
As of 31 March 2023
Trade payables - 12 31 - 1
Trade receivables - 4 46 - -
Corporate guarantee fee payable - 1 - - -
Guarantees and collaterals taken (including performance guarantees) - 2,000 - - -
Reimbursement asset - 10 - - -
(1) This guarantee (200% of the bond amount) relates to the $1bn USD
non-convertible bonds (refer to note 14) with original maturity of 2024. The
Group had prepaid a portion of these bonds and the outstanding amount as on 31
March 2024 is $550m (31 March 2023: $550m). In accordance with the legal and
regulatory requirements pertaining to these bonds, the guarantee amount can be
reduced only once these are paid in full and thus the full guarantee amount
(based on issued value of guarantee) is disclosed.
(c) Key management compensation ('KMP')
KMP are those persons having authority and responsibility for planning,
directing and controlling the activities of the Group, directly or indirectly,
including any director, whether executive or otherwise. For the Group, these
include executive committee members. Remuneration to KMP were as follows:
For the year ended
31 March 2024 31 March 2023
Short-term employee benefits 11 10
Performance linked incentive 4 4
Share-based payment 3 2
Other long term benefits 2 2
Other benefits 1 0
21 18
17. Fair Value of financial assets and liabilities
The details as to the carrying value, fair value and the level of fair value
measurement hierarchy of the group's financial instruments are as follows:
Carrying value as of Fair value as of
31 March 2024 31 March 2023 31 March 2024 31 March 2023
Financial assets
FVTPL
Derivatives
- Forward and option Level 2 10 4 10 4
contracts
- Currency swaps and Level 2 0 9 0 9
interest rate swaps
Other bank balances Level 2 0 4 0 4
Investments Level 2 0 0 0 0
Amortised cost
Trade receivables 184 145 184 145
Cash and cash equivalents 620 586 620 586
Other bank balances 353 127 353 127
Balance held under mobile money trust 737 616 737 616
Other financial assets 136 176 136 176
2,040 1,667 2,040 1,667
Financial liabilities
FVTPL
Derivatives
- Forward and option Level 2 22 5 22 5
contracts
- Currency swaps and Level 2 0 0 0 0
interest rate swaps
- Cross currency swaps Level 3 155 43 155 43
- Embedded derivatives Level 2 0 0 0 0
Amortised cost
Long term borrowings - fixed rate Level 1 - 554 - 540
Long term borrowings - fixed rate Level 2 271 227 257 210
Long term borrowings - floating rate 676 452 676 452
Short term borrowings - fixed rate Level 1 550 - 549 -
Short term borrowings 876 945 876 945
Put option liability Level 3 552 569 552 569
Trade payables 422 460 422 460
Mobile money wallet balance 722 582 722 582
Other financial liabilities 586 680 586 680
4,832 4,517 4,817 4,486
The following methods/assumptions were used to estimate the fair values:
· The carrying value of bank deposits, trade receivables, trade
payables, balance held under mobile money trust, mobile money wallet balance,
short-term borrowings, other current financial assets and liabilities
approximate their fair value mainly due to the short-term maturities of these
instruments.
· Fair value of quoted financial instruments is based on quoted
market price at the reporting date.
· The fair value of non-current financial assets, long-term
borrowings and other financial liabilities is estimated by discounting future
cash flows using current rates applicable to instruments with similar terms,
currency, credit risk and remaining maturities.
· The fair values of derivatives are estimated by using pricing
models, wherein the inputs to those models are based on readily observable
market parameters. The valuation models used by the Group reflect the
contractual terms of the derivatives (including the period to maturity), and
market-based parameters such as interest rates, foreign exchange rates,
volatility etc. These models do not contain a high level of subjectivity as
the valuation techniques used do not require significant judgement and inputs
thereto are readily observable.
· The fair value of the put option liability (included in other
financial liability) to buy back the stake held by non-controlling interest in
AMC BV is measured at the present value of the redemption amount (i.e.
expected cash outflows). Since, the liability will be based on fair value of
the equity shares of AMC BV (subject to a cap) at the end of 48 months , the
expected cash flows are estimated by determining the projected equity
valuation of the AMC BV at the end of 48 months expiring in August 2025 and
applying cap thereon.
During the year ended 31 March 2024 and 31 March 2023 there were no
transfers between Level 1 and Level 2 fair value measurements, and no transfer
into and out of Level 3 fair value measurements.
The following table describes the key inputs used in the valuation (basis
discounted cash flow technique) of the Level 2 and Level 3 financial
assets/liabilities as of 31 March 2024 and 31 March 2023:
Financial assets / liabilities Inputs used
- Currency swaps, forward and option contracts and other bank balances Forward foreign currency exchange rates, Interest rate
- Interest rate swaps Prevailing / forward interest rates in market, Interest rate
- Embedded derivatives Prevailing interest rates in market, inflation rates
- Other financial assets / fixed rate borrowing / other financial Prevailing interest rates in market, Future payouts, Interest rates
liabilities
Key inputs for level 3
The fair value of cross currency swap (CCS) has been estimated based on the
contractual terms of the CCS and parameters such as interest rates, foreign
exchange rates etc. Since the data from any observable markets in respect of
interest rates is not available, the interest rates are considered to be
significant unobservable inputs to the valuation of this CCS.
Reconciliation of fair value measurements categorised within level 3 of the
fair value hierarchy - Financial Assets/(Liabilities) (net)
• Cross Currency Swaps ('CCS')
For the year ended
31 March 2024 31 March 2023
Opening Balance (43) (6)
Recognised in finance costs in profit and loss(unrealised) (284) (65)
Repayment of Interest 9 4
Cross Currency Swap repayment 23 22
Foreign currency translation impact recognised in OCI 140 2
Closing Balance (155) (43)
• Put option liability
For the year ended
31 March 2024 31 March 2023
Opening Balance (569) (579)
Liability de-recognised by crediting transaction with NCI reserve((1)) 24 16
Recognised in finance costs in profit and loss (unrealised) (7) (6)
Closing Balance (552) (569)
((1) ) Put option liability was reduced by $24m (March 2023: $16m) for
dividend distribution to put option NCI holders. Any dividend paid to the put
option NCI holders is adjustable against the put option liability based on put
option arrangement.
18. Events after the balance sheet date
No material subsequent events or transactions have occurred since the date of
statement of financial position except as disclosed below:
· The Board recommended a final dividend of 3.57 cents per share on
8 May 2024.
Appendix
Additional information pertaining to three months ended March 31, 2024
Condensed Consolidated Statement of Comprehensive Income
(All amounts are in US$ millions unless stated otherwise)
For three months ended
31 March 2024 31 March 2023
Income
Revenue 1,118 1,341
Other income 3 4
1,121 1,345
Expenses
Network operating expenses 210 268
Access charges 63 102
License fee and spectrum usage charges 61 62
Employee benefits expense 72 76
Sales and marketing expenses 140 134
Impairment loss on financial assets - (4)
Other expenses 55 48
Depreciation and amortisation 173 220
774 906
Operating profit 347 439
Finance costs
- Derivative and foreign exchange losses
Nigerian naira 323 54
Other currencies 33 35
- Other finance costs 120 121
Finance income (11) (6)
Share of profit for associate and joint venture accounted for using equity (0) 2
method
(Loss)/profit before tax (118) 233
Tax expense (27) 6
(Loss)/profit for the period (91) 227
(Loss)/profit before tax (as presented above) (118) 233
Add/(less): Exceptional items (net) 323 -
Underlying profit before tax 205 233
(Loss)/profit after tax (as presented above) (91) 227
Add/(less): Exceptional items (net) 219 (99)
Underlying profit after tax 128 128
Other comprehensive income ('OCI')
Items to be reclassified subsequently to profit or loss:
Net loss due to foreign currency translation differences (179) (41)
Gain on debt instruments at fair value through other comprehensive income - -
Tax on above 2 (1)
Share of OCI of associate and joint venture accounted for using 0 0
equity method
(177) (42)
Items not to be reclassified subsequently to profit or loss:
Re-measurement (loss)/gain on defined benefit plans (0) 1
Tax on above 0 (0)
(0) 1
Other comprehensive loss for the period (177) (41)
Total comprehensive (loss)/income for the period (268) 186
For three months ended
31 March 2024 31 March 2023
(Loss)/profit for the period attributable to: (91) 227
Owners of the company (104) 195
Non-controlling interests 13 32
Other comprehensive loss for the period attributable to: (177) (41)
Owners of the company (175) (41)
Non-controlling interests (2) 0
Total comprehensive (loss)/income for the period attributable to: (268) 187
Owners of the company (279) 154
Non-controlling interests 11 33
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 underlying 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 equivalent IFRS measure Adjustments to reconcile to IFRS measure Definition and purpose
EBITDA and margin Operating profit · Depreciation and amortisation The Group defines EBITDA as operating profit/(loss) for the period before
depreciation and amortisation.
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.
Underlying profit / (loss) before tax Profit / (loss) before tax · Exceptional items (Refer note on exceptional items on page 55) The Group defines underlying profit/(loss) before tax as 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.
Effective tax rate Reported tax rate · Exceptional items (Refer note on exceptional items on page 55) The Group defines effective tax rate as reported tax rate (reported tax charge
divided by reported profit before tax) adjusted for exceptional items, foreign
· Foreign exchange rate movements exchange rate movements and one-off tax items of prior period adjustment, tax
settlements and impact of permanent differences on tax.
· One-off tax impact of prior period, tax litigation settlement and
impact of tax on permanent differences This provides an indication of the current on-going tax rate across the Group.
Foreign exchange rate movements are specific items that are non-tax deductible
in a few of the entities which are loss making and/or 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) after tax Profit/(loss) for the period · Exceptional items (Refer note on exceptional items on page 55) The Group defines underlying profit/(loss) 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.
Earnings per share before exceptional items EPS · Exceptional items (Refer note on exceptional items on page 55) The Group defines earnings per share before exceptional items as 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.
Earnings per share before exceptional items and derivative and foreign EPS · Exceptional items (Refer note on exceptional items on page 55) The Group defines earnings per share before exceptional items and derivative
exchange losses*
and foreign exchange losses as profit/(loss) for the period before exceptional
· Derivative and foreign exchange losses items and derivative and foreign exchange losses (net of tax) 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 and
derivative and foreign exchange losses for each share unit of the company.
Derivative and foreign exchange losses are due to revaluation of US dollar
balance sheet liabilities and derivatives as a result of currency devaluation.
Operating free cash flow Cash generated from operating activities · Income tax paid The Group defines operating free cash flow as net cash generated from
operating activities before income tax paid, changes in working capital, other
· Changes in working capital non-cash items, non-operating income, exceptional items, and after capital
expenditures. The Group views operating free cash flow as a key liquidity
· Other non-cash items measure, as it indicates the cash available to pay dividends, repay debt or
make further investments in the Group.
· Non-operating income
· Exceptional items (Refer note on exceptional items on page 55)
· Capital expenditures
Net debt and leverage ratio Borrowings The Group defines net debt as borrowings including lease liabilities less cash
and cash equivalents, term deposits with banks, deposits given against
· Lease liabilities borrowings/non-derivative financial instruments, processing costs related to
borrowings and fair value hedge adjustments.
· Cash and cash equivalent
The Group defines leverage ratio as net debt divided by EBITDA for the
· Term deposits with banks preceding 12 months.
· Deposits given against borrowings/ non-derivative financial instruments 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.
· Fair value hedges
Return on capital employed No direct equivalent · Exceptional items (Refer note on exceptional items on page 55) to The Group defines return on capital employed ('ROCE') as EBIT divided by
arrive at EBIT 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.
Capital employed is defined as sum of equity attributable to owners of the
company (grossed up for put option provided to minority shareholders to
provide them liquidity as part of the sale agreements executed with them
during year ended 31 March 2022), 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).
( * New APM added during the year ended 31 March
2024)
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 2023 for all countries, except Nigeria. For Nigeria
the constant currency exchange rate used is 752.2 NGN/USD which is prevailing
rate as on 30 June 2023.Reported currency percentage change is derived based
on 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. The constant currency numbers only reflect the
retranslation of reported numbers into exchange rates as of 31 March 2023
(Nigeria as of 30 June 2023) and are not intended to represent the wider
impact that currency changes has on the business.
Reconciliation between GAAP and Alternative Performance Measures
Table A: EBITDA and margin
Description Unit of measure Year ended
March 2024 March 2023
Operating profit $m 1,640 1,757
Add:
Depreciation and amortisation $m 788 818
EBITDA $m 2,428 2,575
Revenue $m 4,979 5,255
EBITDA margin (%) % 48.8% 49.0%
Table B: Underlying profit / (loss) before tax
Description Unit of measure Year ended
March 2024 March 2023
(Loss) / Profit before tax $m (63) 1,034
Finance cost - exceptional items $m 807 -
Underlying profit before tax $m 744 1,034
Table C: Effective tax rate
Description Unit of measure Year ended
March 2024 Mar
ch
202
3
Profit before taxation Income tax expense Tax rate % Profit before taxation Income tax expense Tax rate %
Reported effective tax rate (after EI) $m (63) 26 (41.1%) 1,034 284 27.4%
Exceptional items (provided below) $m 807 258 - 161
Reported effective tax rate (before EI) $m 744 284 38.3% 1,034 445 43.0%
Adjusted for:
Foreign exchange rate movement for loss making entity and/or non-DTA operating $m 57 - 106 -
companies & holding companies
One-off adjustment and tax on permanent differences $m - 24 5 (1)
Effective tax rate $m 801 308 38.4% 1,145 444 38.8%
Exceptional items b
1. Deferred tax asset recognition $m - a - 161
-
2. Derivative and foreign exchange rate losses $m 807 258 - -
Total $m 807 258 - 161
1. Deferred tax asset recognition
$m
-
a
-
-
161
2. Derivative and foreign exchange rate losses
$m
807
258
-
-
Total
$m
807
258
-
161
a) $258m exceptional tax gain in full year period ended 31 March
2024 is tax gain corresponding to $807m derivative and foreign exchange losses
following Nigerian naira and Malawian kwacha devaluation.
b) $161m exceptional tax gain in full year ended 31 March 2023
is on account of deferred tax credit in Kenya, Democratic Republic of Congo
and Tanzania.
Table D: Underlying profit / (loss) after tax
Description Unit of measure Year ended
March 2024 March 2023
(Loss) / profit after tax $m (89) 750
Finance cost - exceptional items $m 807 -
Tax exceptional items $m (258) (161)
Underlying profit after tax $m 460 589
Table E: Earnings per share before exceptional items
Description Unit of Year ended
measure
March 2024 March 2023
(Loss)/Profit for the period attributable to owners of the company $m (165) 663
Finance cost - exceptional items $m 807 -
Tax exceptional items $m (258) (161)
Non-controlling interest exceptional items $m (4) 10
Profit for the period attributable to owners of the company- $m 380 512
before exceptional items
Weighted average number of ordinary shares in issue during the Million 3,751 3,752
financial period.
Earnings per share before exceptional items Cents 10.1 13.6
Table F: Earnings per share before exceptional items and derivative and
foreign exchange losses
Description UoM Year ended
March 2024 31-Mar-23
(Loss)/Profit for the period attributable to owners of the company $m (165) 663
Finance cost - exceptional items $m 807 -
Tax exceptional items $m (258) (161)
Non-controlling interest exceptional items $m (4) 10
Profit for the period attributable to owners of the company- before $m 380 512
exceptional items
Derivative and foreign exchange losses (excluding exceptional items) $m 452 338
Tax on derivative and foreign exchange losses (excluding exceptional items) $m (130) (77)
Non-controlling interest on derivative and foreign exchange losses (excluding $m (17) (4)
exceptional items) - net of tax
Profit for the period attributable to owners of the company- before $m 685 769
exceptional items and derivative and foreign exchange losses
Weighted average number of ordinary shares in issue during the financial Million 3,751 3,752
period
Earnings per share before exceptional items and derivative and foreign Cents 18.3 20.5
exchange losses
Table G: Operating free cash flow
Description Unit of measure Year ended
March 2024 March 2023
Net cash generated from operating activities $m 2,259 2,229
Add: Income tax paid $m 344 397
Net cash generation from operation before tax $m 2,603 2,626
Less: Changes in working capital
Increase in trade receivables $m 79 45
Increase in inventories $m 16 13
Increase in trade payables $m (56) (9)
Increase in mobile money wallet balance $m (207) (120)
(Increase)/Decrease in provisions $m (3) 32
Increase in deferred revenue $m (21) (37)
Increase in other financial and non-financial liabilities $m (76) (113)
Increase in other financial and non-financial assets $m 93 140
Operating cash flow before changes in working capital $m 2,428 2,577
Other non-cash adjustments $m - (2)
EBITDA $m 2,428 2,575
Less: Capital expenditure $m (737) (748)
Operating free cash flow $m 1,691 1,827
Table H: Net debt and leverage
Description Unit of measure As at As at
March 2024 March 2023
Long term borrowing, net of current portion $m 947 1,233
Short-term borrowings and current portion of long-term borrowing $m 1,426 945
Add: Processing costs related to borrowings $m 8 7
Less: Fair value hedge adjustment $m (1) (5)
Less: Cash and cash equivalents $m (620) (586)
Less: Term deposits with banks $m (344) (117)
Add: Lease liabilities $m 2,089 2,047
Net debt $m 3,505 3,524
EBITDA (LTM) $m 2,428 2,575
Leverage (LTM) times 1.4x 1.4x
Table I: Return on capital employed
Description Unit of Year ended
measure
March 2024 March 2023
Operating profit (LTM) $m 1,640 1,757
Equity attributable to owners of the Company $m 2,160 3,635
Add: Put option given to minority shareholders (1) $m 552 569
Gross equity attributable to owners of the Company (1) $m 2,712 4,204
Non-controlling interests (NCI) $m 140 173
Net debt (refer Table H) $m 3,505 3,524
Capital employed $m 6,357 7,901
Average capital employed (1) $m 7,130 7,536
Return on capital employed % 23.0% 23.3%
((1)) Average capital employed is calculated as average of capital employed at
closing and opening of relevant period.
Note on exceptional items
"Exceptional items refer to items of income or expense within the consolidated
statement of comprehensive income, which are of such size, nature or incidence
that their exclusion is considered necessary to explain the performance of the
Group and improve the comparability between periods. Reversals of previous
exceptional items are also considered as exceptional items. When applicable,
these items include amongst others, currency devaluation of local currencies
against the US Dollar, network modernisation, share issue expenses, loan
prepayment costs, the settlement of legal and regulatory cases, restructuring
costs, impairments, gain on sale of tower assets and the initial recognition
of deferred tax assets etc.
The Group has US Dollar liabilities in subsidiaries in which the US Dollar is
not the functional currency. Changes in the US Dollar exchange rate against
the relevant functional currency leads to foreign exchange gains or losses
recorded in the statement of comprehensive income. With respect to the
classification of whether these gains or losses, as a result of the
devaluation of local currencies against the US Dollar, as an exceptional item,
the Group presents the impact as an exceptional item only if a particular
currency has devalued (or appreciated) due to a structural change in the local
market (for example as a result of changes in government policy) or the
devaluation in a month is more than a threshold percentage. The devaluation is
also only reported as exceptional if the resultant impact on the Group's
profit before tax is higher than a monetary threshold. Reversals of foreign
exchange losses as a result of the above are also reported as exceptional. The
Group continues to review its exceptional items policy to align it to changes
in the macro-economic environment. For the current year, this did not have a
change on the amounts reported as exceptional items."
Statement of Director's Responsibilities
We confirm that to the best of our knowledge:
a) The financial statements, prepared in accordance with the relevant
financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the company and the
undertakings included in the consolidation taken as a whole.
b) The management report includes a fair review of the development and
performance of the business and the position of the company, and the
undertakings included in the consolidation taken as a whole, together with a
summary description of the principal risks and uncertainties that they face.
c) The financial statements include disclosure of related parties'
transactions that have taken place during the year and that have materially
affected the financial position or performance of the company.
This responsibility statement was approved by the board of directors on 08 May
2024 and is signed on its behalf by:
Segun Ogunsanya
Chief Executive Officer
08 May 2024
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 and 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.
CBN Central Bank of Nigeria
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 at a fixed 'constant currency' exchange rate, which is
done to measure the organic performance of the Group and represents the
performance of the business in a better way. Constant currency amounts and
growth rates are calculated using closing exchange rates as of 31 March 2023
for all reporting regions and service segments except for Nigeria region and
service segment. For the Nigeria region and service segment, constant currency
amounts and growth rates have been calculated using the closing exchange rate
prevailing as of 30 June 2023
In June 2023, the Central Bank of Nigeria (CBN) announced changes to the
operations in the Nigerian Foreign Exchange Market, including the abolishment
of segmentation, with all segments now collapsing into the Investors and
Exporters (I&E) window and the reintroduction of the 'Willing Buyer,
Willing Seller' model at the I&E window. As a result of this CBN decision,
the Nigerian naira has devalued against US Dollar by approximately 62%. This
change announced by CBN led to a material impact on the Group's financial
statements and for better representation of the performance of the business
and comparability the closing exchange rate prevailing as of 30 Jun 2023 i.e.
NGN 752.2/USD has been used for calculation of constant currency amounts and
growth rates of Nigeria region and service segment.
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 companies Foreign exchange rate movements are specific items that are non-tax deductible
in a few of our operating entities, hence these hinder a like-for-like
and holding companies 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 Includes total MBs consumed (uploaded and downloaded) on the 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
5G Fifth-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
1 (#_ftnref1) Relates to currency translation impact only and reflects no
change to the operating performance of the Nigerian business.
2 (#_ftnref2) Refer 'Note on exceptional items' on Page 55
3 (#_ftnref3) Alternative performance measures (APM) are described on page
50, with a reconciliation on page 53.
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