REG - Airtel Africa PLC - Full Year Results
11/05/2022 07:00
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RNS Number : 0361L Airtel Africa PLC 11 May 2022
Airtel Africa plc
Results for the year ended 31 March 2022
11 May 2022
Full-year highlights
· Reported revenue grew by 20.6% for the year, to $4,714m, and 17.8%
for Q4. Constant currency underlying revenue grew 23.3% for the year and 19.1%
in Q4.
· Constant currency underlying revenue growth was strong in all regions:
Nigeria up 27.7%, East Africa up 22.7% and Francophone Africa up 17.2%; and
across all key services, with revenue in Voice up 15.4%, Data up 34.6% and
Mobile Money up 34.9%.
· Underlying EBITDA of $2,311m, grew by 29.0% in reported currency.
· Underlying EBITDA margin of 49.0%, increased by 294 basis points.
· Operating profit grew by 37.2% to $1,535m in reported currency.
· Profit after tax grew by 82.0% to $755m.
· Basic EPS of 16.8 cents, an increase of 86.5%. EPS before
exceptional items of 16.0 cents (FY'21: 8.2 cents).
· Operating free cash flow of $1,655m, up 40.5%, with net cash
generated from operating activities up 20.7% to $2,011m. Over the last twelve
months the business has repaid nearly $1.4bn of debt at HoldCo as a result of
strong cash upstreaming across its OpCos and proceeds from minority
investments in mobile money and tower sales.
· Leverage ratio improved to 1.3x from 2.0x in the prior year, with
$1bn of debt now held at HoldCo (FY'21: $2.4bn).
· Customer base of 128.4 million, up 8.7%, with increased penetration
across mobile data (customer base up 15.2%) and mobile money services
(customer base up 20.7%). NIN/SIM regulations in Nigeria impacted customer
growth in H1, but then returned to strong growth, adding 4 million customers
in Nigeria during H2'22.
· Board recommends a final dividend of 3 cents per share, making
total FY'22 dividends 5 cents per share (FY'21: 4 cents).
Alternative performance measures (2) GAAP measures
(Year ended)
(Year ended)
Description Mar-22 Mar-21 Reported Constant Description Mar-22 Mar-21 Reported
currency
currency
currency
$m $m change % change % $m $m change %
Underlying revenue (1) 4,714 3,888 21.3% 23.3% Revenue 4,714 3,908 20.6%
Underlying EBITDA 2,311 1,792 29.0% 31.2% Operating profit 1,535 1,119 37.2%
Underlying EBITDA margin 49.0% 46.1% 294 bps 296 bps Profit after tax 755 415 82.0%
EPS before exceptional items ($ cents) 16.0 8.2 96.0% Basic EPS ($ cents) 16.8 9.0 86.5%
Operating free cash flow 1,655 1,178 40.5% Net cash generated from operating activities 2,011 1,666 20.7%
(()(1)) Underlying revenue excludes a one-time exceptional revenue of $20m
relating to a settlement in Niger in the prior year.
(()(2)) Alternative performance measures (APM) are described on page 51.
Segun Ogunsanya, chief executive officer, on the trading update:
"This is another strong set of results for Airtel Africa, demonstrating our
solid execution as we continue to enrich the lives of a growing number of
people through leveraging the sizeable opportunity to promote digital and
financial inclusion across our markets.
We have delivered strong double-digit growth in revenues across all our
regions and all our key services, with improving margins driven by strong cost
control, and expanding cash generation which is enabling us to continue to
invest in our network and services and expand our distribution, as well as
strengthening our balance sheet and increasing our returns to shareholders. We
are connecting more customers in new and existing coverage areas and driving
usage levels and ARPUs to new highs.
We have successfully executed on a number of strategic initiatives in the
year, with tower sales completed in four countries, $550m of minority
investments secured for our mobile money business and a successful buyout of
minorities in our Nigerian operation. Our receipt last month of a full PSB
licence in Nigeria will help us to accelerate financial inclusion in the
territory and drive our mobile money business even faster.
While the fundamentals of our six-pillar growth strategy remain unchanged, we
are looking to accelerate our performance through a greater focus on
digitalisation and we have underpinned our strategic pillars with our
sustainability ambition.
I am particularly proud of the progress we have made in articulating our
sustainability strategy this year as well as the partnership we announced with
UNICEF to help drive and support educational programmes in our territories. I
very much look forward to us publishing both our pathway to net zero and our
first full sustainability report later in the year.
Turning to the outlook, long-term opportunities for us remain attractive.
While mindful of currency devaluation and repatriation risks, we continue to
work actively to mitigate all our material risks and to deliver value for all
our stakeholders. There are increasing challenges from global inflationary
pressures, but we continue to target revenue growth ahead of the market and
moderate margin expansion."
Airtel Africa plc ("Airtel Africa" or "Group") annual financial information
contained in this report is drawn from Airtel Africa plc's audited annual
consolidated financial statements for the years ended 31 March 2022 and 31
March 2021, prepared in accordance with the requirements of the Companies Act
2006 and International Financial Reporting Standards (IFRS) 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).
Quarterly information is drawn from unaudited IAS 34 financials of respective
periods. Comparative period figures have been regrouped/ reclassified to
conform with current year grouping/ classification.
About Airtel Africa
Airtel Africa is a leading provider of telecommunications and mobile money
services, with a presence in 14 countries in Africa, primarily in East Africa
and Central and West Africa.
Airtel Africa offers an integrated suite of telecoms solutions to its
subscribers, including mobile voice and data services as well as mobile money
services, both nationally and internationally. We aim to continue providing a
simple and intuitive customer experience through streamlined customer
journeys.
Enquiries
Airtel Africa - Investor Relations
Pier Falcione +44 7446 858 280
Morten Singleton +44 7464 830 011
Investor.relations@africa.airtel.com +44 207 493 9315
(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 presentation and conference call
at 12:00pm UK time (BST), on Wednesday 11 May 2022, including a Question and
Answer session.
To receive an invitation with the dial in numbers to participate in the event,
please register beforehand using the following link:
https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=1370750&linkSecurityString=2d5d99c98
(https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=1370750&linkSecurityString=2d5d99c98)
Key financial information
Description Unit of measure Year ended Quarter ended
Mar-22 Mar-21 Reported currency Constant currency Mar-22 Mar-21 Reported currency Constant currency
change %
change %
change %
change %
Profit and loss summary
Underlying revenue (1) $m 4,714 3,888 21.3% 23.3% 1,222 1,038 17.8% 19.1%
Voice revenue $m 2,358 2,083 13.2% 15.4% 611 547 11.8% 13.6%
Data revenue $m 1,525 1,157 31.8% 34.6% 397 315 26.0% 27.9%
Mobile money revenue (2) $m 553 401 37.9% 34.9% 147 110 33.6% 29.0%
Other revenue $m 407 347 17.4% 19.9% 102 91 12.3% 14.0%
Expenses $m (2,413) (2,107) 14.5% 16.4% (616) (544) 13.2% 14.8%
Underlying EBITDA (3) $m 2,311 1,792 29.0% 31.2% 608 495 22.9% 23.7%
Underlying EBITDA margin % 49.0% 46.1% 294 bps 296 bps 49.7% 47.7% 206 bps 187 bps
Depreciation and amortisation $m (744) (681) 9.3% 11.3% (188) (176) 6.6% 8.4%
Operating exceptional items (4) $m (32) 14 - - (32) 1 - -
Operating profit $m 1,535 1,119 37.2% 39.4% 390 319 22.3% 22.0%
Net finance costs (5) $m (403) (423) (4.6%) (112) (104) 7.7%
Non-operating exceptional items(6) $m 92 - - 82 - -
Profit before tax $m 1,224 697 75.6% 360 215 67.4%
Tax $m (471) (318) 48.2% (122) (82) 47.5%
Tax - exceptional items $m 2 36 - 2 21 -
Total tax charge $m (469) (282) 66.3% (120) (61) 95.2%
Profit after tax $m 755 415 82.0% 240 154 56.0%
Non-controlling interest $m (124) (76) 62.9% (50) (22) 130.7%
Profit attributable to owners of the company - before exceptional items $m 602 308 95.9% 171 121 41.5%
Profit attributable to owners of the company $m 631 339 86.3% 190 132 43.7%
EPS - before exceptional items cents 16.0 8.2 96.0% 4.6 3.2 41.6%
Basic EPS cents 16.8 9.0 86.5% 5.1 3.5 43.8%
Weighted average no of shares million 3,754 3,758 (0.1%) 3,753 3,756 (0.1%)
Capex $m 656 614 6.9% 224 211 6.4%
Operating free cash flow $m 1,655 1,178 40.5% 384 284 35.1%
Net cash generated from operating activities $m 2,011 1,666 20.7% 512 449 14.1%
Net debt $m 2,941 3,530 2,941 3,530
Leverage (net debt to underlying EBITDA) times 1.3x 2.0x 1.3x 2.0x
Return on capital employed % 23.3% 16.5% 678 bps 23.2% 16.4% 680 bps
Operating KPIs
ARPU $ 3.2 2.8 13.5% 15.4% 3.2 2.9 9.5% 10.7%
Total customer base million 128.4 118.2 8.7% 128.4 118.2 8.7%
Data customer base million 46.7 40.6 15.2% 46.7 40.6 15.2%
Mobile money customer base million 26.2 21.7 20.7% 26.2 21.7 20.7%
((1)) Revenue includes intra-segment eliminations of $129m for the year ended
31 March 2022 and $100m for the prior year. And it also excludes one-time
exceptional revenue of $20m relating to a settlement in Niger in the year
ended 31 March 2021.
((2)) Mobile money revenue post intra-segment eliminations with mobile
services was $424m for the year ended 31 March 2022, and $301m for the prior
year.
((3)) Underlying EBITDA includes other income of $10m for the year ended 31
March 2022, and $11m for the prior year.
((4)) Operating exceptional items of $32m in the year ended 31 March 2022
consists of a $12m provision for expected settlement of a contractual dispute
in which one of the Group's subsidiaries is a party and $20m costs of agreeing
historical spectrum fees in one of the Group's subsidiaries. The prior year
operating exceptional items includes exceptional revenue relating to a
one-time settlement in Niger for $20m, partially offset by one-off costs of
$6m in Francophone Africa.
((5)) Net finance costs in the year ended 31 March 2022 excludes a one-off
cost of $19m on prepayment of $505m bonds in March 2022.
((6)) Non-operating exceptional items in the year ended 31 March 2022 include
a gain of $111m on the sale of telecommunication tower assets in the Group's
subsidiaries in Tanzania, Malawi, Madagascar, and Rwanda, partially offset by
costs of $19m on prepayment of $505m of bonds.
( )
( )
( )
Financial review for the year ended 31 March 2022
We have recorded another strong set of results that demonstrate the effective execution of our strategy, with strong performance across our regional segments and key services. Reported revenue grew by 20.6%.
Underlying revenue in constant currency grew by 23.3%. Revenue in Nigeria grew by 27.7%, in East Africa by 22.7% and in Francophone Africa by 17.2% in constant currency. We have delivered strong double-digit growth across all our key services: voice revenue grew by 15.4%, data revenue grew by 34.6%, mobile money revenue grew by 34.9%, and other revenue by 19.9%. Growth in other revenues was marginally impacted in Q4'22 from the loss of c.$6m revenues from tower sharing related to tower sales completed in the year. Mobile services revenue grew by 22.0% in constant currency (19.6% in reported currency) and mobile money services revenue grew by 34.9% (37.9% in reported currency). Revenue growth for the year benefited from a weakened performance in the first quarter of the prior year during the peak period of Covid-19 restrictions across the region.
Net finance costs were broadly flat. The increase in tax charges of $187m was due to higher operating profits and withholding tax on dividends by subsidiaries, with the prior year also benefitting from $36m deferred tax credit recognition.
Basic EPS improved to 16.8 cents while EPS before exceptional items improved to 16.0 cents, with higher profits more than offsetting the associated increased tax charges, and higher non-controlling interests due to higher profit contributions in OpCos with minority shareholdings and new minority shareholdings in Airtel Money, partially offset by lower minority interests in Airtel Nigeria as a result of the successful share buy-back.
Leverage improved to 1.3x from 2.0x in the prior year, largely driven by increased cash generation, expansion of underlying EBITDA and proceeds from Airtel Money investments. Our balance sheet has also been further de-risked by continued localisation of our debt into the OpCos and material debt reduction in HoldCo.
GAAP measures
Revenue
Reported revenue grew by 20.6% to $4,714m. The prior year benefited from
one-time exceptional revenue of $20m relating to a settlement in Niger.
Excluding this, revenue grew by 21.3% in reported currency and by 23.3% in
constant currency. Constant currency growth of 23.3% was partially offset by
currency devaluations, mainly in the Nigerian naira (5.6%) and the Malawian
kwacha (7.2%), in turn partially offset by appreciation in the Ugandan
shilling (4.1%) and Zambian kwacha (4.4%). Revenue growth for the year
benefited from a weakened performance in the first quarter of the prior year
during the peak period of Covid-19 restrictions across the region.
Operating profit
Operating profit grew by 37.2% to $1,535m in reported currency as a result of
strong revenue growth and improvements in operating efficiency across all our
regions. Operating profit included a one-time cost of $32m consisting of a
$12m provision for expected settlement of a contractual dispute in which one
of the Group's subsidiaries is a party, and $20m costs relating to an
agreement on historical spectrum fees in one of the Group's subsidiaries. This
compared to the prior year which included a gain of $20m for a one-time
settlement in Niger, which was partially offset by one-off costs of $6m in
Francophone Africa. Excluding exceptional items, operating profit grew by
41.9%.
Net finance costs
Net finance costs were broadly flat, as lower foreign exchange and derivative
losses, higher interest income and a one-time $12m gain in other finance
charges as a result of the reversal of an interest provision in one of our
operating entities were offset by a one-off cost of $19m for the applicable
premium paid on the early repayment of the $505m bonds in March 2022.
Additionally, interest costs were also broadly flat as lower interest costs on
our reduced market debt were offset by an increase in interest costs on lease
liabilities.
The Group effective interest rate increased to 5.6% compared to 4.9%, largely
driven by repayment of the EUR750m bond in May 2021, which carried a
lower-than-average coupon, and due to higher local currency debt at the OpCo
level. In line with our strategy to continue to reduce foreign currency debt
at HoldCo, we also repaid $505m bonds in March 2022, one year earlier than
their March 2023 redemption date. One-off costs of $19m, including applicable
premium, have been recorded under non-operating exceptional items, while the
Group will save an aggregate of c.$26m on interest payments from the early
redemption.
Taxation
Total tax charges were $469m, an increase of $187m, driven by higher operating
profit and withholding tax on dividends by subsidiaries. The prior year also
benefited from the recognition of a deferred tax credit of $36m in Tanzania.
Profit after tax
Profit after tax increased by 82.0% to $755m. This increase was mainly led by
higher operating profits and stable net finance costs which more than offset
the associated increase in tax charges. Exceptional gains were also $12m
higher than the prior year.
Basic EPS
Basic EPS climbed to 16.8 cents, an improvement of 7.8 cents (+86.5%) from 9.0
cents in the prior year. This increase was mainly due to higher operating
profits which more than offset increased tax charges and higher
non-controlling interests (due to higher profit contributions in OpCos with
minority shareholdings, new minority shareholdings in Airtel Money partially
offset by lower minority interests in Airtel Nigeria as a result of the
successful share buy-back).
Net cash generated from operating activities
Net cash generated from operating activities was $2,011m, an increase of 20.7%
from $1,666m in the prior period. The increase was largely driven by higher
profit before tax of $527m, which was partially offset by higher tax payments
on the increased profits and withholding tax on dividends by subsidiaries.
Over the last twelve months the business has repaid nearly $1.4bn of debt at
HoldCo as a result of strong cash upstreaming across its OpCos and proceeds
from minority investments in mobile money and tower sales.
Alternative performance measures 1
Underlying revenue
Underlying revenue in constant currency grew by 23.3%, driven by both customer
base growth of 8.7% and ARPU growth of 15.4%. The slowdown in customer base
growth was due to the introduction of new SIM registration regulations in
Nigeria. Excluding Nigeria, the customer base grew by 10.2%. In Nigeria, our
customer base returned to growth in the second half of the year, adding a net
2.4 million customers for the full year. At the end of the year our total
customer base was 128.4 million, an increase of 10.2 million. ARPU growth of
15.4% was driven by all our key services: with data contributing 7.7%, voice
contributing 4.3%, mobile money contributing 2.7%, and the balance coming from
other revenue, which was marginally impacted in Q4 from the loss of tower
sharing revenues relating to towers sold during the year.
Revenue growth was recorded across all our regions and key services.
Underlying revenue in Nigeria grew by 27.7%, in East Africa by 22.7%, and in
Francophone Africa by 17.2%. Voice revenue grew by 15.4%, data revenue grew by
34.6% and mobile money revenue grew by 34.9% in constant currency.
Underlying EBITDA
Underlying EBITDA was $2,311m, an increase of 29.0% in reported currency and of 31.2% in constant currency. Growth in underlying EBITDA was led by revenue growth and supported by improved operating efficiencies. The underlying EBITDA margin improved by 294 basis points in reported currency to 49.0%.
Foreign exchange had an adverse impact of $58m on revenue, and $26m on underlying EBITDA, as a result of devaluations of the Nigerian naira and the Malawian kwacha, in turn partially offset by appreciations of both the Ugandan shilling and the Zambian kwacha.
With respect to currency devaluation sensitivity, on a 12-month basis, a 1% currency devaluation across all currencies in our OpCos would have a negative impact of $43m on revenues, $26m on underlying EBITDA and $21m on finance costs. Our largest exposure is to the Nigerian naira, for which a 1% devaluation would have a negative impact of $18m on revenues, $11m on underlying EBITDA and $7m on finance costs.
Tax
The effective tax rate was 39.0% compared to 43.2% 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
33%, largely due to the profit mix between various OpCos and withholding taxes
on dividends by subsidiaries.
Exceptional items
Operating exceptional items of $32m in the year ended 31 March 2022 consists
of a $12m provision for expected settlement of a contractual dispute in which
one of the Group's subsidiaries is a party and $20m costs of agreeing
historical spectrum fees in one of the Group's subsidiaries. The prior period
operating exceptional items includes exceptional revenue on account of a
one-time settlement in Niger amounting to $20m, partially offset by a one-off
cost of $6m in Francophone Africa.
Non-operating exceptional items in the year ended 31 March 2022 include a gain
of $111m on the sale of telecommunications tower assets in the Group's
subsidiaries in Tanzania, Malawi, Madagascar, and Rwanda, partially offset by
one-off costs of $19m including applicable premium paid on the early repayment
of $505m bonds in March 2022.
Exceptional tax benefit of $2m recognised in the year mainly relate to the
provision for the contractual dispute in which one of the Group's subsidiaries
is a party, and the $36m in the prior year relates to deferred tax credit
recognition in Tanzania.
EPS before exceptional items
EPS before exceptional items almost doubled to 16.0 cents, up by 96.0% (+7.8
cents) from 8.2 cents in the prior year. This increase was mainly due to
higher operating profits which more than offset the increased tax charges and
higher non-controlling interests (due to higher profit contributions in OpCos
with minority shareholdings, new minority shareholdings in Airtel Money
partially offset by lower minority interests in Airtel Nigeria as a result of
the successful share buy-back).
Operating free cash flow
Operating free cash flow increased by 40.5% to $1,655m, as higher underlying
EBITDA more than offset increased capital expenditure. Capital expenditure in
the prior year was slightly lower due to logistical challenges as a result of
the pandemic.
Leverage
Leverage (net debt to underlying EBITDA) improved to 1.3x at 31 March 2022,
from 2.0x at 31 March 2021, largely driven by increased cash generation,
expansion in underlying EBITDA and receipts of $550m from mobile money
minority investments. Our balance sheet continued to be de-risked through a
reduction of HoldCo debt (now $1bn, down from $2.4bn in the prior year) and
increased localisation of our debt into the OpCos, such that our gross OpCo
debt of $2,921m (including lease obligations) is now significantly higher than
our HoldCo debt of $1,000m.
Other significant updates
Full payment service bank licence in Nigeria
In April 2022, Airtel Africa's subsidiary SMARTCASH Payment Service Bank
Limited ('Smartcash') was granted final approval to operate a payment service
bank ('PSB') business in Nigeria.
The PSB licence is required for Airtel to provide mobile financial services in
Nigeria, such as accepting cash deposits and carrying out payments and
remittances, issuing debit and prepaid cards, operating electronic wallets and
rendering other financial services.
Full super-agent licence in Nigeria
On 14 November 2021, Airtel Africa's subsidiary Airtel Mobile Commerce Nigeria
Ltd was granted approval in principle by the Central Bank of Nigeria to
operate as a super-agent in Nigeria. This was subsequently upgraded to
approval for a full super-agent licence in April 2022.
Under the super-agent licence, we are able to create an agent network that can
service the customers of licensed Nigerian banks, payment service banks and
licenced mobile money operators in Nigeria.
Early Bond redemption
In March 2022, the Group confirmed that it had completed the early repayment
of its $505m 5.125% Guaranteed Senior Notes, originally due in March 2023,
using cash balances available at Group level.
Settlement included all outstanding accrued interest up to the redemption date
of 7 March 2022. One-off costs of $19m, including applicable premium, have
been recorded under non-operating exceptional items, while the Group will save
an aggregate of c.$26m on interest payments from early redemption.
Since the time of the IPO in June 2019, Airtel Africa has successfully
pursued a strategy of strengthening its balance sheet through both
deleveraging and reducing its US dollar debt exposure. Over this period the
Group has reduced its USD HoldCo debt by c.$1.7bn and improved its leverage
ratio to 1.3x net debt to underlying EBITDA at 31 March 2022. Following this
early repayment of senior notes, the Group now has only $1bn of bonds
remaining at HoldCo level, due in May 2024.
Completion of Airtel Nigeria minority buyout offer
On 2 December 2021, further to the buyout offer announcement on 4 October
2021, Airtel Africa announced the completion of the minority shareholding
buyback of Airtel Networks Limited ('Airtel Nigeria'), a subsidiary of Airtel
Africa plc and a leading provider of telecommunication services in Nigeria.
The purchase consideration for the 8.22% minority shareholdings acquired under
the buyback was NGN 67.6bn, equivalent to $163m, including directly
attributable transaction costs.
NIN - SIM linkage registration rules in Nigeria
Following a directive issued by the Nigerian Communications Commission (NCC)
on 7 December 2020 to all Nigerian telecom operators, Airtel Nigeria has been
working with the government to ensure that all our subscribers provide their
valid National Identification Numbers (NINs) to update SIM registration
records. To complete the registration process, we must link the NIN
information received with the SIM of the respective subscribers and share the
same with the National Identity Management Commission (NIMC).
The original regulatory directive set an initial deadline for customers to
register (link) their NIN with their SIM of 30 December 2020. This was
subsequently moved several times, with the last deadline being 31 March 2022.
Airtel Nigeria was subsequently notified that with effect from 4 April 2022,
all SIMs that have not been linked to a NIN were to be placed on 'receive
only' status, meaning all their outgoing calls have been barred with immediate
effect.
Subscribers of such lines can still link their SIMs to their NINs in order
that these restrictions can be lifted. Customers have therefore been given a
final opportunity to fully comply with the latest registration requirements.
We have made significant progress on capturing the NINs of our customers and
building the database in collaboration with the NIMC. As at the end of April
2022, we have collated NIN information for 35.9 million active customers.
Outgoing voice revenues for those active subscribers who have not yet linked
their NIN with their SIM amounts to around 7% of total revenues from Nigeria,
and around 3% of total revenues for the Group. However, our experience of
adopting similar procedures in other countries suggests that SIM registration
is accelerated, and some SIM consolidation is likely to occur in response to
implementation, potentially reducing any financial impact. As at the end of
the year, Airtel Nigeria had an active customer base of 44.4 million and
posted revenue of $1,878m.
We continue to work closely with the regulator and impacted customers to help
them to comply with the registration requirements, making every effort to
minimise disruption and ensure affected customers can continue to benefit from
full-service connectivity as soon as possible; in line with our aim to drive
increased connectivity and digital inclusion across Nigeria.
Kenya spectrum licences
On 7 March 2022, the Group announced that its Kenya subsidiary, Airtel Kenya
Networks Limited ('Airtel Kenya'), had entered into agreements with the
Communications Authority of Kenya regarding its operating and spectrum
licences, and received approval for the replacement of its temporary licence
with a ten-year frequency licence for 2x10 MHz of spectrum in the 2100 MHz
band, as follows:
· In respect of agreements regarding 2015-2025 operating and
spectrum licences, Airtel Kenya will pay a total of c.$20m in four instalments
over the next three years.
· In respect of the 2x10 MHz licence, 2022-2032, Airtel Kenya has
agreed and paid for a ten-year licence for $10m.
Airtel Kenya is one of the Group's largest markets by revenue, and from FY'19
to FY'22 grew revenues by 22.2% CAGR. This $30m investment reflects our
continued confidence in the tremendous opportunity inherent in the Kenya
market.
Uganda listing obligation
Under Article 16 of Uganda's National Telecom Operator ('NTO') licence, Airtel
Uganda limited is obliged to comply with the sector policy, regulations and
guidelines requiring the listing of part of its shares on the Uganda Stock
Exchange. The current Uganda Communications (Fees & Fines) (Amendment)
Regulations 2020, creates a public listing obligation for all NTO licensees,
and specifies that 20% of the shares of the operator must be listed within two
years of the date of the effective date of the licence. Currently, this
imposes a listing requirement by 15 December 2022 on Airtel Uganda. On 5(th)
April 2022 we applied to the Uganda Communications Commission for an extension
on the deadline for a period of one year.
Tower sales
On 25 March 2022 and 3 November 2021, Airtel Africa announced the first
closings of transactions to sell its telecommunications tower companies in
Malawi and Madagascar respectively, to Helios Towers plc, a leading
independent telecommunications infrastructure company in Africa.
On 5 January 2022, Airtel Africa announced the first closing of the
transaction to sell its telecommunications tower assets in Tanzania to a joint
venture company owned by a wholly-owned subsidiary of SBA Communications
Corporation, a leading global independent owner and operator of wireless
communications infrastructure, as majority owner, and by Paradigm
Infrastructure Limited, a UK company focused on developing, owning and
operating shared passive wireless infrastructure in selected growth markets.
The gross considerations for these transactions are $55m in Malawi, $52m in
Madagascar, and $177m in Tanzania. Loss of tower sharing revenue as a result
of the sale of these towers amounted to $29m per annum. As a result of the
tower sales across our OpCos the Group recorded a gain of $111m.
Under the terms of these tower transactions, Airtel Africa's subsidiaries in
the respective countries will continue to develop, maintain and operate its
equipment on the towers under separate lease arrangements with the purchaser.
In March 2021, the Group also announced memorandum of understanding
arrangements with Helios Towers for the potential sale of its tower assets in
Chad and Gabon. In February 2022, Airtel Africa announced that it had agreed
an extension to their memorandum of understanding arrangement with Helios
Towers in Gabon, with completion still subject to Helios Towers obtaining a
passive infrastructure licence. The memorandum of understanding arrangement
relating to tower assets in Chad expired in February 2022, and Airtel Africa
and Helios Towers have mutually agreed that this would not be renewed.
Strategic investments in our mobile money business
Following earlier similar announcements of investments in our mobile money
business of $200m by TPG's The Rise Fund and $100m by Mastercard (made on 18
March 2021 and 1 April 2021 respectively) in July 2021, Airtel Africa signed
agreements with Qatar Holding LLC, an affiliate of the Qatar Investment
Authority ('QIA'), regarding their investment of $200m in Airtel Mobile
Commerce BV ('AMC BV'), a subsidiary of Airtel Africa plc. AMC BV is the
holding company for several of Airtel Africa's mobile money operations; and
ultimately is intended to own and operate the mobile money businesses across
all of Airtel Africa's 14 operating countries.
On 2 August 2021 and 20 August 2021 Airtel Africa announced first closings
relating to the Airtel Money minority investment transactions with TPG's The
Rise Fund and Mastercard, and subsequently with Qatar Holding LLC
respectively. Upon first closings, The Rise Fund, Mastercard and QIA
invested $150m, $75m and $150m respectively in a secondary purchase of
shares in AMC BV from a subsidiary of Airtel Africa, and both QIA and TPG
each appointed a director to the board of AMC BV.
In November 2021, Airtel Africa announced second closings relating to these
Airtel Money minority investment transactions, with a further $50m, $25m and
$50m invested into AMC BV by The Rise Fund, Mastercard and QIA respectively.
In December 2021, Airtel Africa announced the introduction of Chimera
Investment LLC as an additional investor in AMC BV through a $50m secondary
purchase of shares from a subsidiary of Airtel Africa plc. Chimera Investment
LLC (through its subsidiary Chimetech Holding Ltd.) now holds minority stakes
in AMC BV alongside the other minority investors, with Airtel Africa
continuing to hold the majority stake.
These transactions are a continuation of the Group's pursuit of strategic
asset monetisation and investment opportunities, and it is the aim of Airtel
Africa to explore the potential listing of the mobile money business within
four years from first closing.
Airtel Africa has now received a total of $550m cumulative proceeds from
minority stake sales in Airtel Money from the four investors. As previously
reported, the proceeds from these secondary stake sale transactions were used
for repayment of Group debt and for investment in network and sales
infrastructure in the respective operating countries.
Launch of sustainability strategy
Within our Full Year Results announcement in May 2021, we highlighted that we
would publish the measurable medium to long-term sustainability goals we set
ourselves. In the first six months of this financial year, we identified the
programmes needed, along with key milestones towards these goals. We also
conducted a consultation progress with our stakeholders to gather feedback and
further inform our sustainability strategy.
In October 2021, Airtel Africa launched an ambitious sustainability strategy
that underpins our well-established corporate purpose of 'Transforming Lives.'
The strategy demonstrates our commitment to developing the infrastructure and
services that will drive both digital and financial inclusion for people
across Africa and provides a framework to contribute to six of the United
Nations' Sustainable Development Goals ('SDGs') where we believe we can have
the biggest impact. These are SDG 4: Delivering quality education;
SDG 5: Gender equality; SDG 8: Decent work and economic growth; SDG 9:
Industry innovation and infrastructure; SDG 10: Reduced inequalities; and SDG
12: Responsible consumption and production.
The launch of our sustainability strategy builds upon the Group's
sustainability framework, announced with the FY'21 results, with its four key
pillars of 'Our business', 'Our people', 'Our communities' and 'Our
environment', and the strong foundations of the work we are already doing at a
Group level and across all our local operations. The new sustainability
strategy covers every aspect of our business activities, and has
environmental, social and governance criteria at its core.
The sustainability strategy includes nine goals and commitments, with
corresponding programmes that address the business' material topics
(identified through an extensive consultation at the beginning of the year)
and enable the Group to continue delivering sustainable growth and uphold the
best governance standards:
· Data security goal: Establish industry-leading data security for our
customers; through investments in technology and expertise, updated processes
and consumer awareness - with focus areas around confidentiality, integrity
and availability.
· Service quality goal: Provide underserved communities with access to
reliable networks and connectivity; through the rollout of new infrastructure
and technology, improved fibre connectivity and capacity - with focus areas on
service accessibility, delivery and reliability.
· Supply chain goal: Ensure all our suppliers are aligned with our
sustainability agenda; through programmes to increase supplier disclosure and
audit ESG performance - with focus areas on enhanced supplier due diligence
and ongoing ESG compliance.
· Commitments to our people: with our ambition to provide rewarding
employment opportunities and to achieve genuine diversity and inclusion at all
levels across the business through four key commitments:
o Delivering equality in our workforce; through recruitment and programmes
to provide training and advancement for everyone regardless of gender,
nationality or disability;
o Providing best practice training and development; through upskilling and
reskilling initiatives to ensure they can succeed in their future careers. And
through supporting female entrepreneurs through training and increasing
women's participation in the technology and engineering sectors;
o Providing the highest standards of health and safety for our employees and
contractors; through the introduction of a best practice social and health and
safety management system, improved policies and full compliance with all
legislation and regulation; and,
o Maintaining the highest levels of employee engagement; through the
introduction of additional channels that provide every one of our people with
a voice.
· Digital inclusion goal: significantly improve digital Inclusion across
Africa; by driving the penetration of mobile, smartphones and home broadband
in rural areas through the provision of retail and support services.
· Financial inclusion goal: significantly increase financial
inclusion in Africa, with particular support for women; through the
development of affordable financial products to meet the needs of the un- and
under-banked, a reliable service and financial confidence and literacy.
· Access to education goal: helping transform the lives of over one
million children through improving access to education - with programmes
around connectivity, the provision of zero-rated education content under a
five-year UNICEF partnership, connecting 1,400 schools to the internet by
2027, and the adoption and support of schools in all our markets.
· Greenhouse gas emissions reduction goal: Our ambition is to
achieve net zero greenhouse gas ('GHG') emissions ahead of the 2050 deadline
set out in the Paris Agreement. To do this we must fully identify, measure and
reduce our GHG emissions which can only be achieved in partnership with our
peers and the wider industry. We will establish and launch a sector leading
and credible decarbonisation pathway in 2022, ahead of the publication of our
first Sustainability Report. In January 2022, we have engaged with the Carbon
Trust for their advice and assistance with several aspects of our Greenhouse
gas emissions measurement, management and reporting.
· Environmental stewardship: Eliminate hazardous waste from our
operations, significantly reduce our non-hazardous waste and minimise our
water consumption; with programmes to replace damaging materials, expand
recycling schemes and build employees' awareness around the protection of our
natural resources.
Partnership with UNICEF
On 1 November 2021, Airtel Africa and UNICEF announced a five-year
pan-African partnership to help accelerate the roll-out of digital learning
through connecting schools to the internet and ensuring free access to
learning platforms across 13 countries. By providing equal access to quality
digital learning, particularly for the most vulnerable children, the
partnership will help to ensure that every child reaches their full
potential.
Airtel Africa is the first African private sector partner to make a
multimillion-dollar commitment to 'Reimagine Education', a global initiative
launched by UNICEF in 2020 calling for public and private sector investment
in digital learning as an essential service for every child and young person
across the globe. This initiative aims to give children a chance to catch up
on their learning needs amid the ongoing global pandemic.
Airtel Africa's financial and in-kind contribution for this partnership
is $57m over five years to 2027. The programme will call on technology and
expertise, in addition to direct financial support to connect schools and
communities to the internet and enable free access to online educational
content for students. It will also provide vital data insights to
inform UNICEF's work to scale-up digital learning and help ensure it is
sustainable and meets students' needs across Africa.
The Airtel Africa and UNICEF pan-African partnership will benefit students
in Chad, Congo, Democratic Republic of the Congo, Gabon,
Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Tanzania, Uganda and Zambia.
Dividend policy
In October 2021, the Board approved an upgrade to the progressive dividend
policy as a result of continued strong business performance and significant
progress made in reducing the leverage ratio. The new policy aims to grow the
dividend annually by a mid to high-single digit percentage from a new base of
5 cents per share for FY'22, with a continued focus to further strengthen the
balance sheet.
The Board recommends a final dividend of 3 cents per share, making total FY'22
dividends 5 cents per share including the interim dividend of 2 cents per
share, and in line with this upgraded dividend policy.
Covid update
The Covid-19 pandemic contributed to a rapid acceleration of already existing
macro trends across the countries where we operate, with people, businesses
and governments seeking access to more and better connectivity and improved
financial inclusion. These challenging times have shown that the telecoms
industry is a key and essential service for these economies, allowing
customers to work remotely, reduce their travel, keep connected and have
access to affordable entertainment and financial services.
Covid-19 presented significant challenges to the business, particularly during
the initial phase of the pandemic in Q1 last year, when mobile money and
mobile services growth both slowed. However, the actions taken by the Board at
that time enabled the continued execution of our strategy, including meeting
increased customer demand for data, mobile money and mobile services.
Through multiple lockdowns and during times of national crisis our people have
kept our distribution channels available and our networks fully operational.
Our business partners have similarly continued to deliver their services
despite numerous logistical challenges, and governments and regulators have
continued to support the industry and helped facilitate our continued support
to the economies of the countries and the communities we serve.
Several times through the pandemic, the governments in the countries where we
operate have acted swiftly to implement and enforce restrictions on the
movement of people to prevent contagion. These swift actions, along with low
population density and relatively youthful population demographics, less
frequent travel, and local experience in dealing with contagious diseases,
have resulted in generally lower infection rates in sub-Saharan Africa
relative to some other regions. Around the world the vaccination effort is
well under way, with a significant easing of social distancing rules and
travel restrictions, although Africa lags most developed economies in
attaining full vaccination cover.
Despite the resilience demonstrated by our business during the last two years,
we are constantly monitoring how the situation is evolving to identify key
risks and to put in place adequate mitigation plans to minimise any potential
disruptions.
The Group will continue to focus on ensuring the safety of our employees, our
outsourced partners and our customers; ensuring that our network and
distribution channels remain fully operational and available; ensuring that
our customers continue to have access to financial services and ensuring that
at Group level we are in the right financial position to meet our financial
obligations at all times.
New shareholding requirements in Kenya
On 9 April 2021, the Minister for ICT in Kenya published an amendment to the
National Information Communications and Technology (ICT) Policy Guidelines,
2020 (ICT Policy). The ICT Policy amendment will affect Airtel Africa's Kenya
business as follows:
· Airtel Networks Kenya Limited, which currently holds an
indefinite exemption from the Minister for ICT, dated 20 March 2013, has three
years with effect from 9 April 2021 to comply with the requirement to have a
30% local shareholding.
· Airtel Money Kenya Limited, which holds a Content Service
Provider Licence from the Communications Authority of Kenya, with effect from
November 2020, has three years from the date of the licence to comply with the
requirement to have a 30% local shareholding.
Under the amended ICT policy, a licensee may apply to the ICT Minister for an
extension of time to comply with the requirement, or to obtain an exemption.
Appointment of new CEO, and other Board appointments and changes
On 29 April 2021, Airtel Africa announced that Olusegun 'Segun' Ogunsanya,
managing director and chief executive officer Airtel Nigeria was to succeed
Raghunath 'Raghu' Mandava, as managing director and chief executive officer
following Raghu Mandava's informing the Board of his intention to retire.
Segun Ogunsanya joined the Board of Airtel Africa plc with effect from 1
October 2021.
Segun Ogunsanya joined Airtel Africa in 2012 as managing director and chief
executive officer Airtel Nigeria and has been responsible for the overall
management of our operations in Nigeria, our largest market in Africa. Segun
has more than 25 years' business management experience in banking, consumer
goods and telecoms. Before joining Airtel in 2012, Segun held leadership roles
at Coca-Cola in Ghana, Nigeria, and Kenya (as managing director and chief
executive officer). He has also been the managing director of Nigerian
Bottling Company Ltd (Coca-Cola Hellenic owned) and Group head of retail
banking operations at Ecobank Transnational Inc, covering 28 countries in
Africa. He is an electronics engineer and also a chartered accountant.
Raghu Mandava has retired as managing director and chief executive officer, as
a director of Airtel Africa plc and as a member of the Market Disclosure
Committee as of 30 September 2021. Following his cessation of employment at
Airtel Africa, Mr. Mandava remains available to advise the Chairman, the
Airtel Africa Board and the newly appointed managing director and chief
executive officer for a nine-month period.
Jaideep Paul, chief financial officer, was appointed as an executive director
and joined the Board of Airtel Africa plc with effect from 1 June 2021.
On 12 October 2021, Airtel Africa announced the appointment of Ms Tsega
Gebreyes to the Board as an independent non-executive director, with immediate
effect.
New administrative office in Dubai
Airtel Africa plc has opened a new office in Dubai, adding to its existing
administrative office locations in Nairobi, London, Amsterdam and Delhi.
The executive committee of Airtel Africa plc now operates out of the new
office, which provides for significantly improved connectivity and enhanced
cooperation with our 14 operating markets across Africa and with our other
administrative offices.
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
(https://protect-eu.mimecast.com/s/4veJCYyYxt3A5qxptGa5Wq?domain=airtel.africa)
.
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 in the population, low smartphone penetration, low data penetration
and relatively unbanked populations. Unique mobile user penetration across the
Group's footprint is around 47%, 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 at the same time as growing our revenues profitably, across
each of our key services of voice, data and mobile money.
The Group continued 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 lie at the core of our strategy, through our fundamental purpose
around transforming lives.
Our focus on digitalisation, of both our products and services and our
internal systems and processes, increasingly functions as a catalyst, or an
'accelerator', for each of our strategic pillars.
Underpinning our Group strategy is our sustainability platform, describing our
continued commitment to both driving sustainable development and acting as a
responsible business. We launched our sustainability strategy earlier this
year, describing our commitment to developing the infrastructure and services
that will drive both digital and financial inclusion for people across Africa
and provides a framework to describe our contribution to the United Nations'
Sustainable Development Goals ('SDGs'). We have four key pillars within our
sustainability framework: 'Our business', 'Our people', 'Our communities' and
'Our environment'; and we have nine summary goals and commitments, along with
corresponding programmes that address each of the 'material' identified topics
of the business, covering data security, service quality, supply chain, people
commitments, digital inclusion, financial inclusion, access to education,
greenhouse gas emissions reduction and environmental stewardship.
This year, we continued to make strong progress across each of our core
strategic pillars: 'Win with network', 'Win with distribution' (renamed from
the previous 'Win with customers'), 'Win with data', 'Win with mobile money',
'Win with cost' and 'Win with people'.
Win with network
The Group aims to continually provide a best-in-class network experience,
including internet experience, to customers. We continued to invest in our
network by expanding 4G coverage and building capacity to cater for the future
needs of our customers and to continue providing them with high-speed data.
Our expansion of 4G network capability across our footprint and connecting
rural areas through deployment of new sites continued to be our two key focus
areas. Our investment in the 4G network through single RAN technology has
resulted in both expansion of our 4G coverage and enhanced network capacity.
At the end of FY'22, 87.6% of our total sites are now on 4G, compared to 76.5%
in the previous year. We are building a leading, modernised network that can
provide the data capacity to meet rapidly growing demand, and enhanced
connectivity and digitalisation needs of our markets. Our network data
capacity has increased by 40.4% year on year, reaching 16,900+ TB per day,
with additional capacity being added at only very marginal cost. We continued
to modernise our network across all our countries of operation, with 96% of
our sites now on single RAN.
The Group has added almost 10,000 km of additional fibre in the year, with
total fibre now more than 64,500km.
The Group has also added additional spectrum in a few of our markets. We have
added 10 MHz in the 2600 band in Malawi and 10 MHz in the 2100 band in Kenya.
These allocations will help us to maximise network capacity and coverage.
Capital expenditure related to investment activities during FY'22 was $656m,
excluding spectrum acquisitions and licence renewals.
Win with distribution (formerly named 'Win with customers')
Sub-Saharan Africa is characterised by low penetrated markets, with unique
subscriber penetration at 47%. The Group's strategy is to build assured
availability of service through deployment of exclusive retail footprint and
ensuring sufficient resourcing to drive revenue generation at each
distribution site.
The Group continued to build a unique mix of multi-brand and exclusive
franchise channels, combined with a simplified and enhanced self-service app
to provide a seamless customer onboarding experience. These have enabled us to
add customers, resulting in customer base growth of 8.7% year on year
(excluding Nigeria the customer base grew by 10.2%). This has also helped us
to grow voice revenue by 15.4% 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 more than
15,000+ kiosks and mini-shops (taking the total to almost 53,000) across our
footprint. The Group also added more than 43,000 activating entities in the
year, up by 21%.
Win with data
The Group continued to invest in the expansion of our 4G network, adding
significant data capacity to the network at only marginal cost, expanding both
home broadband and enterprise business services to greater leverage the 4G
network capacity; growing data ARPU and data revenue. We continue to focus on
increasing smartphone ownership and increasing data usage at scale, largely
via smartphone offerings through OEM (Original Equipment Manufacturer) device
partnerships, and through expanding our network of smartphone device selling
outlets.
Our improved 4G network supported our drive to increase smartphone
penetration, data customer penetration and the uptake of larger data volumes,
resulting in greater data consumption per customer. Smartphone penetration was
up by 1.2 percentage point to 34.2% and our data customer base grew by 15.2%,
now representing 36.4% of our total customer base.
Data usage per customer reached 3.4 GB per month (from 2.6 GB) led by an
increase in smartphone penetration and expansion of our home broadband and
enterprise customers. This helped us to grow data revenue by 34.6% in constant
currency. Growing penetration and the data usage of customers (particularly 3G
and 4G) helped us to grow data ARPU by 18.6%. 4G data usage constituted 66.7%
of total data usage on the network in FY'22 with 4G data usage per customer
reaching 5.5 GB per month in FY'22, up by 10.7% on FY'21.
Win with mobile money
The Group has continued to drive financial inclusion. 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.
The Group continued to expand our exclusive distribution network of kiosks,
mini-shops and Airtel Money branches, so that customers can access their cash
with relative ease. We have increased the number of kiosks and mini-shops by
40.0% and Airtel money branches by almost 60%. Additionally, we have increased
the number of (non-exclusive) mobile money agents by 41.7%. Throughout the
year, the expansion of our mobile money product portfolio, both through
partnerships with leading financial institutions and through expansion of our
merchant ecosystem, have further strengthened our mobile money propositions.
Our distribution expansion and enhanced offerings helped drive 20.7% growth in
our mobile money customer base, now serving over 26.2 million customers and
representing 20.4% of our total customer base (31.1% excluding Nigeria).
Mobile money continues to be one of our fastest growing services, delivering
revenue growth of 34.9% in FY'22. It is an increasingly important part of our
business, delivering $64.4bn of annual transaction value and accounting for
11.7% of total revenue in FY'22.
Mobile money ARPU increased by 12.2% in FY'22, driven by increased transaction
values and higher contributions from merchant payments, cash transactions, P2P
transfers and mobile services recharges through Airtel Money.
Win with cost
Our operating cost model is focused on enhancing cost efficiency through
changes in the operating design and digitalisation initiatives. We embrace
robust cost discipline and continuously seek to improve our processes to
reduce operating costs, delivering one of the highest underlying EBITDA
margins in the industry. We also use 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.
As we continued to expand our business, various cost efficiency initiatives
were undertaken during the period, relating mainly to:
(i) reduced operating costs at sites due to single RAN; (ii) optimisation of
incremental network/site requirements through efficient spectrum utilisation
(iii) remodelling our managed services through diversification of supply; and
(iv) bandwidth capacity optimisation and implementation of dynamic and
contextual interactive voice recognition ('IVR') for more efficient customer
interactions.
These have contributed to an expansion of our underlying EBITDA margin by 294
basis points in reported currency and 296 basis points in constant currency.
Our underlying EBITDA margin was 49.0% for FY'22, and our operating
expenditure as a percentage of revenue improved by 3.0 percentage points.
Win with people
Our values of being Alive, Inclusive and Respectful, underpin our vision of
being a responsible employer. We work in highly collaborative teams across the
18 countries in which we have operations or offices, and with 35 different
nationalities represented.
Our talented and diverse people have continued to demonstrate incredible
dedication and resilience. Their commitment to our business and customers has
been a key driver to our long-term growth and as we continue to transform
lives in the markets we serve.
Diversity and inclusion remain a key focus area for our business. We made
further progress this year with 28% of our ExCo (including OpCos) now being
women, up by 5.0 percentage points, with women representing 26% of our total
workforce. And we continued to expand financial and digital inclusion to the
communities we serve.
Investing in opportunities for learning and development of our people across
all our operations has been accelerated through the launch of several digital
platforms. Building and maintaining strong functional expertise and capability
is a key driver of our performance.
We are committed to employee engagement and upward feedback through regular
market visits, town-halls and open mic sessions, which enable us to understand
issues that really matter to our colleagues, our workplaces and business
operations.
Our reward system is based on simple and consistent metrics that drive a
high-performance culture and our people performance metrics are aligned to our
business priorities.
We continue to make strides to be an employer of choice with a diverse and
inclusive work environment.
Financial review for the year ended 31 March 2022
Nigeria
Description Unit of Year ended Quarter ended
measure
Mar-22 Mar-21 Reported currency Constant currency Mar-22 Mar-21 Reported currency Constant currency
change %
change %
change %
change %
Summarised statement of operations
Revenue $m 1,878 1,552 21.0% 27.7% 507 422 20.0% 24.2%
Voice revenue (1) $m 985 897 9.8% 15.9% 268 240 11.7% 15.6%
Data revenue $m 734 549 33.7% 41.1% 194 152 28.0% 32.5%
Other revenue (1) $m 159 106 50.0% 58.2% 44 30 46.0% 51.1%
Underlying EBITDA $m 1,037 839 23.6% 30.4% 279 232 20.6% 24.8%
Underlying EBITDA margin % 55.2% 54.1% 115 bps 114 bps 55.1% 54.8% 27 bps 25 bps
Depreciation and amortisation $m (268) (236) 13.2% 19.5% (71) (60) 19.8% 23.8%
Operating exceptional items $m - - - - - - - -
Operating profit $m 769 602 27.8% 34.8% 208 172 21.4% 25.7%
Capex $m 251 275 (8.8%) (8.8%) 69 97 (28.9%) (28.9%)
Operating free cash flow $m 786 564 39.3% 50.7% 210 135 56.2% 64.3%
Operating KPIs
ARPU $ 3.8 3.0 26.1% 33.0% 3.9 3.3 18.7% 22.9%
Total customer base million 44.4 42.0 5.8% 44.4 42.0 5.8%
Data customer base million 20.3 17.7 14.9% 20.3 17.7 14.9%
((1)) Voice revenue includes inter-segment revenue of $1m and other revenue
includes inter-segment revenue of $2m in the year ended 31 March 2022.
Excluding inter-segment revenue, voice revenue was $984m and other revenue was
$157m in the year ended 31 March 2022.
Reported currency revenue grew by 21.0% to $1,878m with constant currency
growth of 27.7%. The differential in growth rates was due to devaluation of
the Nigerian naira by 5.6%. The constant currency revenue growth of 27.7% was
driven by both customer base growth of 5.8% and ARPU growth of 33.0% largely
driven by higher data and voice usage.
Voice revenue grew by 15.9%, driven by an increase in voice usage per customer
of 20.8% which led to an ARPU increase of 20.7%. Customer base growth was
affected by the NIN-SIM linkage regulations in Nigeria during the first half
of the year but returned to growth, adding 4 million customers in the second
half of the year, achieving net growth of 2.4 million customers over the full
year. The number of regulatory approved outlets expanded to over 19,100 as of
31 March 2022.
Data revenue grew by 41.1% in constant currency, driven by data customer base
growth of 14.9% and data ARPU growth of 37.6%, led by growth in data usage per
customer to 4.0 GB per month (from 2.8 GB in the prior year). Our continued 4G
network expansion and increased smartphone penetration has supported data
usage growth. Almost 99% of our sites in Nigeria are now delivering 4G, and
smartphone penetration of our customers has increased by almost 1 percentage
point. Data revenue accounted for 39.1% of total revenue in Nigeria in the
year, up by 3.7% on the prior year. For Q4'22, 43.6% of our data customer base
were 4G users, contributing to 76.0% of total data usage. Data usage per
customer reached 4.2 GB per month and 4G data usage per customer reached 6.5
GB per month, a significant increase on the 4.6 GB usage per customer per
month of Q4'21.
Other revenue grew by 58.2%, with the main contribution coming from the growth
in value added services revenue, led by airtime credit services.
Underlying EBITDA was $1,037m, growing by 23.6% in reported currency and
representing constant currency growth of 30.4%. Underlying EBITDA margin
improved to 55.2%, an increase of 115 basis points in reported currency and
114 basis points in constant currency, as a result of improvements in
operational efficiency.
Operating free cash flow was $786m, up by 50.7%, due to the expansion of
underlying EBITDA.
East Africa(1)
Description Unit of Year ended Quarter ended
measure
Mar-22 Mar-21 Reported currency Constant currency Mar-22 Mar-21 Reported currency Constant currency
change %
change %
change %
change %
Summarised statement of operations
Revenue (2) $m 1,717 1,381 24.3% 22.7% 436 358 21.9% 17.9%
Voice revenue (3) $m 783 650 20.3% 19.2% 196 164 19.4% 16.3%
Data revenue $m 457 354 29.1% 27.4% 118 92 28.1% 24.2%
Mobile money revenue (4) $m 411 291 41.5% 37.1% 111 79 39.9% 31.5%
Other revenue (3) $m 152 150 1.1% 1.6% 34 38 (10.0%) (10.7%)
Underlying EBITDA $m 848 631 34.4% 31.6% 218 168 29.4% 23.8%
Underlying EBITDA margin % 49.4% 45.7% 369 bps 331 bps 49.9% 47.0% 291 bps 238 bps
Depreciation and amortisation $m (240) (221) 8.7% 7.9% (60) (57) 6.4% 4.1%
Operating exceptional items (5) $m (32) - - - (32) - - -
Operating profit $m 576 408 41.0% 36.8% 126 111 12.6% 4.6%
Capex $m 271 249 8.8% 8.8% 111 81 36.5% 36.5%
Operating free cash flow $m 577 382 51.1% 46.8% 107 87 22.8% 11.6%
Operating KPIs
ARPU $ 2.5 2.3 12.2% 10.7% 2.6 2.3 12.5% 8.8%
Total customer base million 57.2 53.1 7.8% 57.2 53.1 7.8%
Data customer base million 18.3 16.2 12.9% 18.3 16.2 12.9%
Mobile money customer base million 21.7 18.0 20.5% 21.7 18.0 20.5%
((1)) The East Africa business region includes Kenya, Malawi, Rwanda,
Tanzania, Uganda and Zambia.
((2)) Revenue includes intra-segment eliminations of $85m for the year ended
31 March 2022 and $64m for the prior year.
((3)) Voice revenue includes inter-segment revenue of $1m and other revenue
includes inter-segment revenue of $6m in the year ended 31 March 2022.
Excluding inter-segment revenue, voice revenue was $782m and other revenue was
$146m in the year ended 31 March 2022.
((4)) Mobile money revenue post intra-segment eliminations with mobile
services was $326m for the year ended 31 March 2022 and $227m for the prior
year.
((5 )) Operating exceptional items of $32m in the year ended 31 March 2022
consist of $12m provision for expected settlement of a contractual dispute in
which one of the Group's subsidiaries is a party and $20m cost of agreeing
historical spectrum fees in one of the Group's subsidiaries.
East Africa revenue in reported currency grew by 24.3% to $1,717m with
constant currency revenue growth of 22.7%. This growth was delivered across
all key services; voice revenue grew by 19.2%, data revenue by 27.4% and
mobile money revenue by 37.1% in constant currency. Reported currency revenue
growth was slightly higher than constant currency rates due to currency
appreciation in the Ugandan shilling and Zambian kwacha, partially offset by
currency devaluation in the Malawian kwacha.
Voice revenue grew by 19.2%, driven by both customer base growth of 7.8% and
voice ARPU growth of 7.5%. The customer base growth was largely driven by
expansion of both network coverage and the distribution network. Voice usage
per customer increased by 5.8% to 349 minutes per customer per month, thereby
driving voice ARPU growth of 7.5%.
Data revenue grew by 27.4%, largely driven by data customer base growth of
12.9% and data ARPU growth of 5.6%. We continued to invest in our network and
expanded our 4G network infrastructure which helped us to grow both data usage
and the data customer base. The data customer base increased 12.9% to 18.3
million, with 4G customers accounting for 40.5% of our total data customer
base and contributing 60.2% of total data usage. 85.8% of our total sites are
now on 4G, compared with 76.4% at the end of the prior year. Data usage per
customer reached 3.3 GB per customer per month, up by 22.1%.
Mobile money revenue was up by 37.1%, largely driven by growth in Zambia,
Uganda and Malawi. The mobile money customer base grew by 20.5% and mobile
money ARPU increased by 14.5%, due largely to expansion of our distribution
network. The transaction value per customer reached $183 per customer per
month, up by 16.0% from $153 per customer per month in the prior year. The
slowdown in mobile money revenue growth was due to implementation of
additional levies by the Government of Tanzania on mobile money withdrawal and
P2P transactions from July 2021, which were subsequently revised downwards in
early September 2021.
The underlying EBITDA margin reached 49.4%, an improvement of 331 basis points
in constant currency, as a result of strong revenue growth and improvements in
operating efficiency.
Operating free cash flow was $577m, up by 46.8% due largely to the expansion
of underlying EBITDA.
Francophone Africa(1)
Description Unit of Year ended Quarter ended
measure
Mar-22 Mar-21 Reported currency Constant currency Mar-22 Mar-21 Reported currency Constant currency
change %
change %
change %
change %
Summarised statement of operations
Underlying revenue (2) $m 1,131 964 17.2% 17.2% 282 260 8.4% 12.2%
Voice revenue (3) $m 594 541 9.9% 10.0% 148 143 3.3% 7.3%
Data revenue $m 334 254 31.5% 31.0% 84 70 18.9% 22.6%
Mobile money revenue (4) $m 142 110 29.0% 29.6% 36 31 17.7% 22.6%
Other revenue (3) $m 104 96 8.9% 8.3% 26 25 3.6% 5.3%
Underlying EBITDA $m 464 364 27.6% 27.7% 118 110 7.4% 10.8%
Underlying EBITDA margin % 41.0% 37.7% 332 bps 337 bps 41.7% 42.1% (39) bps (53) bps
Depreciation and amortisation $m (203) (207) (2.0%) (2.1%) (48) (52) (8.6%) (5.8%)
Operating exceptional item (5) $m 0 14 - - 0 1 - -
Operating profit (5) $m 261 170 53.7% 54.6% 70 59 20.1% 24.8%
Capex $m 125 88 42.0% 42.0% 42 32 30.5% 30.5%
Operating free cash flow $m 339 276 23.0% 23.1% 76 78 (2.1%) 2.6%
Operating KPIs
ARPU $ 3.7 3.8 (1.9%) (1.9%) 3.6 3.9 (8.2%) (5.0%)
Total customer base million 26.8 23.1 15.9% 26.8 23.1 15.9%
Data customer base million 8.2 6.7 21.3% 8.2 6.7 21.3%
Mobile money customer base million 4.4 3.6 21.8% 4.4 3.6 21.8%
((1)) The Francophone Africa business region includes Chad, Democratic
Republic of the Congo, Gabon, Madagascar, Niger, Republic of the Congo, and
Seychelles.
((2)) Underlying revenue includes intra-segment eliminations of $44m for the
year ended 31 March 2022 and $36m for the prior year. It also excludes
one-time exceptional revenue of $20m relating to a settlement in Niger in the
year ended 31 March 2021.
((3)()) Voice revenue includes inter-segment revenue of $2m in the year ended
31 March 2022. Excluding inter-segment revenue, voice revenue was $592m in the
year ended 31 March 2022.
((4)()) Mobile money revenue post intra-segment eliminations with mobile
services was $98m in the year ended 31 March 2022 and $74m in the prior year.
((5)) Operating exceptional items in the prior year include exceptional
revenue relating to a one-time settlement in Niger for $20m partially offset
by one-off cost of $6m in Francophone Africa.
Underlying revenue grew by 17.2% both in reported currency and in constant
currency. This growth was largely driven by DRC, Chad, Niger and Gabon. The
slight currency devaluation of the Central African franc was offset by
appreciation in the Seychelles rupee.
Voice underlying revenue grew by 10.0% in constant currency, driven by
customer base growth of 15.9% partially offset by voice ARPU decline of 7.9%.
The ARPU decline was mainly driven by reductions in international call revenue
and local incoming call revenue (the latter due to changes in local
interconnect rates in Gabon, Niger and Republic of the Congo). The customer
base growth was driven by expansion of both network coverage and distribution
infrastructure.
Data revenue grew by 31.0% in constant currency, supported by both customer
base growth of 21.3% and data ARPU growth of 1.3%. We continued to expand our
4G network (65.3% of sites now on 4G) and data network coverage, and we
enhanced our distribution infrastructure supporting further growth of the data
customer base. 30.5% of the Francophone Africa customer base now use data
services. 4G data usage contributes 64.1% of total data usage and 44.8% of
data users were 4G customers. Data usage per customer was 2.4 GB per month (up
23.1% on the prior year) while 4G data usage per customer reached 4.5 GB (up
3.4%).
Mobile money revenue grew by 29.6% in constant currency, driven by both
customer base growth of 21.8% and mobile money ARPU growth of 5.2%. The mobile
money ARPU growth was driven by an increase in the transaction value per
customer of 8.3%, now at $422 per customer per month. Expansions of our
exclusive distribution network and the number of agents helped us to grow the
mobile money customer base by 21.8%.
Underlying EBITDA grew by 27.6% with a margin of 41.0%, an improvement of 332
basis points in reported currency and 337 basis points in constant currency.
This underlying EBITDA growth was driven by both revenue growth and increased
efficiency in operating expenses.
Operating free cash flow was $339m, up 23.1%, due to the expansion in
underlying EBITDA.
Mobile services
Description Unit of Year ended Quarter ended
measure
Mar-22 Mar-21 Reported currency Constant currency Mar-22 Mar-21 Reported currency Constant currency
change %
change %
change %
change %
Summarised statement of operations
Underlying revenue (1) $m 4,294 3,592 19.6% 22.0% 1,112 955 16.5% 18.3%
Underlying EBITDA $m 2,077 1,639 26.8% 29.7% 542 456 18.9% 20.4%
Underlying EBITDA margin % 48.4% 45.6% 276 bps 286 bps 48.7% 47.7% 100 bps 86 bps
Depreciation and amortisation $m (697) (654) 6.5% 8.4% (176) (165) 6.5% 8.3%
Operating exceptional items (2) $m (32) 14 - - (32) 1 - -
Operating profit $m 1,348 995 35.5% 39.0% 335 292 14.8% 16.1%
Capex $m 621 580 7.1% 7.1% 217 185 17.1% 17.1%
Operating free cash flow $m 1,456 1,059 37.6% 42.6% 325 271 20.0% 22.9%
Operating KPIs
Mobile voice
Voice revenue $m 2,358 2,083 13.2% 15.4% 611 547 11.8% 13.6%
Customer base million 128.4 118.2 8.7% 128.4 118.2 8.7%
Voice ARPU $ 1.6 1.5 5.9% 8.0% 1.6 1.5 3.9% 5.6%
Mobile data
Data revenue $m 1,525 1,157 31.8% 34.6% 397 315 26.0% 27.9%
Data customer base million 46.7 40.6 15.2% 46.7 40.6 15.2%
Data ARPU $ 2.9 2.5 16.1% 18.6% 2.9 2.6 10.5% 12.1%
( (1)) Mobile service revenue after inter-segment eliminations was $4,290m in
the year ended 31 March 2022 and $3,587m in the prior year. Underlying revenue
for Mobile service excludes one-time exceptional revenue of $20m relating to a
settlement in Niger in the year ended 31 March 2021.
((2)) Operating exceptional items of $32m in the year ended 31 March 2022
consist of a $12m provision for expected settlement of a contractual dispute
in which one of the Group's subsidiaries is a party and $20m costs of agreeing
historical spectrum fees in one of the Group's subsidiaries. The prior year
operating exceptional items include exceptional revenue on account of a
one-time settlement in Niger amounting to $20m, partially offset by one-off
costs of $6m in Francophone Africa.
Mobile services underlying revenue in reported currency grew by 19.6%, with
constant currency growth of 22.0%, supported by growth in both voice and data
services.
Voice underlying revenue grew by 15.4% in constant currency, supported by
customer base growth of 8.7% and voice ARPU growth of 8.0%. The customer base
growth was driven by expansion of our network and distribution infrastructure.
The slowdown in customer base growth was due to the introduction of new SIM
registration regulations in Nigeria. Excluding Nigeria, the customer base grew
by 10.2%. In Nigeria, our customer base returned to growth in the second half
of the year, adding a net 2.4 million customers for the full year. Voice
minutes per customer reached 257 minutes per month, up by 9.8%, resulting in
voice ARPU growth of 8.0%. Total network minutes increased by 17.3%.
Data revenue continued to be a key driver of growth, up by 34.6% in constant
currency. This was driven by data customer base growth of 15.2% and data ARPU
growth of 18.6%. Our continued investment in our network and expansion of our
4G network infrastructure helped us to expand our data customer base. 87.6% of
our Group sites are now operating on 4G, compared with 76.5% in the prior
year. 36.4% of our total customer base were data users, up from 34.3% in the
prior year. 4G data usage per customer increased to 5.5 GB per month compared
with 5.0 GB in the prior year. 4G data usage reached 5.9 GB per customer per
month for Q4'22. Total data usage per customer reached 3.4 GB per month, up
31.0% from the 2.6 GB of the prior year. At the end of the year, 42.6% of the
total data customer base were 4G data customers, up from 36.4% in the prior
year. The increase in 4G data customer penetration has helped to drive data
ARPU growth.
Data revenue contribution reached 32.3% of total Group revenue in the year, up
from 29.8% in the prior year.
Mobile money
Description Unit of Year ended Quarter ended
measure
Mar-22 Mar-21 Reported currency Constant currency Mar-22 Mar-21 Reported currency Constant currency
change %
change %
change %
change %
Summarised statement of operations
Revenue (1) $m 553 401 37.9% 34.9% 147 110 33.6% 29.0%
Underlying EBITDA $m 270 195 38.1% 34.2% 72 54 33.6% 27.9%
Underlying EBITDA margin % 48.7% 48.7% 5 bps (27) bps 48.7% 48.7% 0 bps (39) bps
Depreciation and amortisation $m (14) (10) 34.8% 30.9% (4) (4) (4.6%) (7.4%)
Operating profit $m 256 185 38.3% 34.4% 68 50 36.5% 30.5%
Capex $m 25 32 (19.9%) (19.9%) 5 25 (79.8%) (79.8%)
Operating free cash flow $m 245 163 49.6% 44.8% 67 29 129.7% 122.3%
Operating KPIs
Mobile money key KPIs
Transaction value $m 64,436 46,009 40.1% 37.0% 16,792 12,538 33.9% 29.2%
Active customers million 26.2 21.7 20.7% 26.2 21.7 20.7%
Mobile money ARPU $ 1.9 1.7 14.7% 12.2% 1.9 1.7 12.7% 8.7%
( (1)) Mobile money service revenue post inter-segment eliminations with
mobile services was $424m in the year ended 31 March 2022 and $301m in the
prior year.
Reported currency mobile money revenue grew by 37.9% with a constant currency
growth of 34.9%. The slowdown in mobile money revenue growth since July 2021
has been due to the implementation of levies by the Government of Tanzania on
mobile money withdrawal and P2P transactions (subsequently revised downwards
in early September 2021). Excluding Tanzania, revenue grew by 41.6% in
constant currency. The constant currency revenue growth of 34.9% was driven by
both customer base growth of 20.7% and ARPU growth of 12.2%. The mobile money
customer base growth was due to the expansion of our distribution network,
particularly our exclusive channels of Airtel money branches and kiosks. We
continued to expand our mobile money portfolio through partnerships with
leading financial institutions, and the expansion of our merchant ecosystem
further strengthened our mobile money propositions. The increase in
transaction value per customer to $223 per month, up by 13.9%, led to mobile
money ARPU growth of 12.2%.
Q4'22 annualised transaction value reached $67.2bn in reported currency, with
mobile money revenue contributing 12.0% of total revenue in the quarter.
The mobile money customer base grew by 20.7% to 26.2 million in the year.
Mobile money customer base penetration reached 20.4%, an increase of 2
percentage points. The ARPU growth of 12.2% was largely driven by an increase
in transaction values and higher contributions from cash transactions,
merchant payments, P2P transfers and mobile service recharges through Airtel
Money.
Underlying EBITDA was $270m, up by 38.1% in reported currency, with a constant
currency growth of 34.2%. The reported currency growth rate was higher than
the constant currency growth rate due to appreciation in the Zambian kwacha.
The underlying EBITDA margin for the year was 48.7%, broadly in line with the
prior year.
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 underlying performance of the business.
Consolidated Financial Statements
Consolidated Statement of Comprehensive Income
(All amounts are in US Dollar Millions; unless stated otherwise)
Notes For the year ended
31 March 2022 31 March 2021
Income
Revenue 5 4,714 3,908
Other income 10 11
4,724 3,919
Expenses
Network operating expenses 817 694
Access charges 407 376
License fee and spectrum usage charges 244 198
Employee benefits expense 297 275
Sales and marketing expenses 224 187
Impairment loss on financial assets 5 7
Other operating expenses 451 382
Depreciation and amortisation 744 681
3,189 2,800
Operating profit 1,535 1,119
Finance costs 441 432
Finance income (19) (9)
Other non-operating income (111) -
Share of profit from associate (0) (1)
Profit before tax 1,224 697
Income tax expense 7 469 282
Profit for the year 755 415
Profit before tax (as presented above) 1,224 697
Less: Exceptional items (net) 6 (60) (14)
Underlying profit before tax 1,164 683
Profit after tax (as presented above) 755 415
Less: Exceptional items (net) 6 (62) (50)
Underlying profit after tax 693 365
Notes For the year ended
31 March 2022 31 March 2021
Profit for the year (continued from previous page) 755 415
Other comprehensive income ('OCI')
Items to be reclassified subsequently to profit or loss:
Loss due to foreign currency translation differences (4) (147)
Tax (expense)/credit on above (3) 9
Share of OCI of associate 1 0
Net loss on net investments hedge (8) (11)
(14) (149)
Items not to be reclassified subsequently to profit or loss:
Re-measurement loss on defined benefit plans (0) (0)
Tax credit on above 0 0
(0) (0)
Other comprehensive loss for the year (14) (149)
Total comprehensive income for the year 741 266
Profit for the year attributable to: 755 415
Owners of the Company 631 339
Non-controlling interests 124 76
Other comprehensive loss for the year attributable to: (14) (149)
Owners of the Company (12) (140)
Non-controlling interests (2) (9)
Total comprehensive income for the year attributable to: 741 266
Owners of the Company 619 199
Non-controlling interests 122 67
Earnings per share
Basic 8 16.8c 9.0c
Diluted 8 16.8c 9.0c
Consolidated Statement of Financial Position Notes As of
(All amounts are in US Dollar Millions; unless stated otherwise)
31 March 2022 31 March 2021
Assets
Non-current assets
Property, plant and equipment 9 2,214 2,066
Capital work-in-progress 9 189 166
Right of use assets 1,109 799
Goodwill 10 & 11 3,827 3,835
Other intangible assets 632 558
Intangible assets under development 2 177
Investment in associate 6 4
Financial assets
- Investments 0 0
- Derivative instruments 3 6
- Others 7 17
Income tax assets (net) 22 33
Deferred tax assets (net) 222 314
Other non-current assets 134 112
8,367 8,087
Current assets
Inventories 3 7
Financial assets
- Derivative instruments 3 6
- Trade receivables 123 113
- Cash and cash equivalents 12 638 813
- Other bank balances 12 378 282
- Balance held under mobile money trust 513 440
- Others 124 66
Other current assets 215 147
Assets of disposal group classified as held for sale - 31
1,997 1,905
Total assets 10,364 9,992
Notes As of
31 March 2022 31 March 2021
Current liabilities
Financial liabilities
- Borrowings 13 786 1,468
- Lease liabilities 323 240
- Derivative instruments 9 7
- Trade payables 404 366
- Mobile money wallet balance 496 432
- Others 428 448
Provisions 69 65
Deferred revenue 162 135
Current tax liabilities (net) 220 173
Other current liabilities 176 151
Liabilities of disposal group classified as held for sale - 19
3,073 3,504
Net current liabilities (1,076) (1,599)
Non-current liabilities
Financial liabilities
- Borrowings 13 1,486 1,871
- Lease liabilities 1,337 1,037
- Put option liability 4(g) 579 -
- Derivative instruments - 6
- Others 88 91
Provisions 20 25
Deferred tax liabilities (net) 114 81
Other non-current liabilities 18 24
3,642 3,135
Total liabilities 6,715 6,639
Net Assets 3,649 3,353
Equity
Share capital 14 3,420 3,420
Retained earnings 3,436 2,975
Other reserves (3,354) (2,990)
Equity attributable to owners of the company 3,502 3,405
Non-controlling interests ('NCI') 147 (52)
Total equity 3,649 3,353
The consolidated financial statements (company registration number: 11462215)
were approved by the Board of directors and authorised for issue on 10 May
2022 and were signed on its behalf by:
Olusegun Ogunsanya
Chief
Executive Officer
10
May 2022
Consolidated Statement of Changes in Equity (All amounts are in US Dollar
Millions; unless stated otherwise)
Equity attributable to owners of the company Non-controlling interests (NCI) Total
equity
Share Capital Retained earnings Other reserves Equity attributable to owners of the company
No of shares((2)) Amount Transactions with NCI reserve Other components of equity
As of 1 April 2020 6,839,896,081 3,420 2,805 (585) (2,252) 3,388 (107) 3,281
Profit for the year - - 339 - - 339 76 415
Other comprehensive loss - - (0) - (140) (140) (9) (149)
Total comprehensive income - - 339 - (140) 199 67 266
Transaction with owners of equity
Employee share-based payment reserve - - (0) - 0 0 - 0
Purchase of own shares - - - - (4) (4) - (4)
Transactions with NCI - - - (9) - (9) 1 (8)
Dividend to owners of the company - - (169) - - (169) - (169)
Dividend (including tax) to NCI (1) - - - - - - (13) (13)
As of 31 March 2021 6,839,896,081 3,420 2,975 (594) (2,396) 3,405 (52) 3,353
Profit for the year - - 631 - - 631 124 755
Other comprehensive loss - - (0) - (12) (12) (2) (14)
Total comprehensive income - - 631 - (12) 619 122 741
Transaction with owners of equity
Employee share-based payment reserve - - (1) - 3 2 - 2
Purchase of own shares - - - - (6) (6) - (6)
Transactions with NCI [Note 4 (g) & (h)] - - - (348) (1) (349) 153 (196)
Dividend to owners of the company [Note 4 (a) & (b)] - - (169) - - (169) - (169)
Dividend (including tax) to NCI (1) - - - - - - (76) (76)
As of 31 March 2022 6,839,896,081 3,420 3,436 (942) (2,412) 3,502 147 3,649
(1) Dividend to NCI includes tax of USD 4m (March 2021: USD
0m).
(2) Includes ordinary and deferred shares.
Consolidated Statement of Cash Flows (All amounts are in US Dollar Millions;
unless stated otherwise)
For the year ended
31 March 2022 31 March 2021
Cash flows from operating activities
Profit before tax 1,224 697
Adjustments for -
Depreciation and amortization 744 681
Finance income (19) (9)
Finance cost(s) 441 432
Share of profit of associate (0) (1)
Other non-operating income adjustment [refer to note 4(c) and (f)] (111) -
Other non-cash adjustments((1)) (6) (15)
Operating cash flow before changes in working capital 2,273 1,785
Changes in working capital
Increase in trade receivables (18) (8)
Decrease / (Increase) in inventories 4 (4)
Increase / (Decrease) in trade payables 34 (38)
Increase in mobile money wallet balance 64 139
Increase in provisions 14 1
Increase in deferred revenue 27 17
Decrease in income received in advance - (1)
Increase in other financial and non financial liabilities 50 18
Increase in other financial and non financial assets (144) (48)
Net cash generated from operations before tax 2,304 1,861
Income taxes paid (293) (195)
Net cash generated from operating activities (a) 2,011 1,666
Cash flows from investing activities
Purchase of property, plant and equipment and capital (717) (645)
work-in-progress
Proceeds from sale of tower assets [refer to note 4(c) and (d)] 171 -
Purchase of intangible assets (22) (270)
Maturity of deposits with bank 301 -
Investment in deposits with bank((2)) (388) (257)
Proceeds from sale of tower subsidiary (net of cash acquired) [note 79 -
4(e) and (f)]
Interest received 19 14
Net cash used in investing activities (b) (557) (1,158)
Cash flows from financing activities
Proceeds from sale of shares to non-controlling interests [refer to 550 -
note 4(g)]
Acquisition of non-controlling interests [refer to note 4(h)] (164) (7)
Purchase of own shares by ESOP trust (6) (4)
Proceeds from issue of share to non-controlling interests 2 -
Proceeds from borrowings 973 407
Repayment of borrowings (2,115) (265)
Repayment of lease liabilities (251) (208)
Dividend paid to non-controlling interests (48) (9)
Dividend paid to owners of the Company (169) (169)
Interest on borrowings and lease liabilities and other finance (370) (317)
charges
Payment on maturity of derivatives (9) (3)
Net cash used in financing activities (c) (1,607) (575)
Decrease in cash and cash equivalents during the year (a+b+c) (153) (67)
Currency translation differences relating to cash and cash equivalents (3) (17)
Cash and cash equivalent as at beginning of the year 1,003 1,087
Cash and cash equivalents as at end of the year (Note 12) ((3)) 847 1,003
1. For the year ended 31 March 2022, this mainly includes
movement in trade receivables impairment and other provisions. For the year
ended 31 March 2021, this mainly includes recognition of revenue pertaining to
earlier years on a cumulative catch-up basis, arising out of a non-cash
settlement agreement entered with a customer in one of the Group's
subsidiaries in Niger.
2. Includes investment in deposits with original maturity of
more than 3 months and deposits placed against certain borrowings. These are
included within other bank balances in the consolidated statement of financial
position.
3. Includes balance held under mobile money trust of USD 513m
(2021: USD 440m) 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 Dollar Millions; unless stated otherwise)
1. Corporate information
Airtel Africa plc ('the company') is a public company limited by shares
incorporated in the United Kingdom 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 listed on the London Stock Exchange (LSE) on 3
July 2019 and on the Nigerian Stock Exchange (NGX) on 9 July 2019. 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 and its associate consist of the provision of telecommunications and
mobile money services.
2. Basis of preparation
The results for the year ended 31 March 2022 are an abridged statement of the
full annual report which was approved by the Board of Directors on 10 May 2022
and signed on its behalf on 10 May 2022. 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 2022 and 2021, but is derived
from those accounts. Statutory accounts for March 2021 have been delivered to
the Registrar of Companies and those for 2022 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 2022.
All the amounts included in the financial statements are reported in United
States dollars, with all values rounded to the nearest millions (USD 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.
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 to June 2023 under both base and reasonable worst case
scenarios taking into considerations its principal risks and uncertainties
including a reduction in revenue and EBITDA and a significant 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 USD 424m expiring beyond the going
concern assessment period (total committed undrawn facilities as of the date
of authorisation of these consolidated financial statements are USD 587m),
which will fulfil the Group's cash flow requirement under both the base and
reasonable worst case scenarios.
Having considered all the factors above impacting the Group's businesses, the
impact of downside sensitivities, and the mitigating actions available
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 and
company only financial statements.
4. Significant transactions/new developments
a) The directors recommended and shareholders approved a final
dividend of 2.5 cents per ordinary share for the year ended 31 March 2021,
which was paid on 23 July 2021 to the holders of ordinary shares on the
register of members at the close of business on 25 June 2021.
b) The interim dividend of 2 cents per share was approved by the
Board on 27 October 2021 and paid on 10 December 2021 to the holders of
ordinary shares on the register of members at the close of business on 12
November 2021.
c) On 2 June 2021, the Group signed an agreement to sell 1,445
towers in Tanzania to a joint venture company owned by a wholly-owned
subsidiary of SBA Communications Corporation as majority owner and by Paradigm
Infrastructure Limited, for a gross consideration of USD 177m. The first close
of such sale was completed on 4 January 2022 and a portion of consideration
amounting USD 160m was received. The Group has leased back a portion of such
tower assets and thus a corresponding portion of the total gain on the sale
has been recognized as a deduction in the cost of the Right of Use assets for
the assets leased back. The resultant remaining gain (amounting to USD 83m)
has been recorded as 'other non-operating income' and presented as an
exceptional item (refer to Note 6(1)). The Group has recognised Right of Use
assets and Lease Liabilities for the portion of towers leased back by the
Group.
Consequent to the completion of this sale, as per the settlement
agreement with Government of Tanzania (GOT), shareholder loans payable by
Airtel Tanzania (a subsidiary of the Group) to Bharti Airtel Tanzania BV
('BATBV') and Bharti Airtel International (Netherlands) B.V. ('BAIN') (other
subsidiaries of the Group) amounting to USD 408m were forgiven after repayment
of a part of the shareholder loan amounting USD 107m by Airtel Tanzania to
BATBV. A portion of the impact of this waiver pertaining to the
non-controlling holders has been allocated to non-controlling interest in the
consolidated financial statements.
As per the settlement agreement, Airtel Tanzania also paid a
special dividend of USD 18m to its 49% shareholder, Government of Tanzania.
The reduction in net assets of Airtel Tanzania (subsidiary) due to this
distribution has been allocated to owners of the Company and non-controlling
interests in the consolidated financial statements in proportion of their
respective shareholdings.
d) In line with the agreement to sell 162 towers in Rwanda, signed
by the Group on 22 February 2021 with IHS Rwanda Ltd, during the year ended 31
March 2022, the Group completed the first and second close of the sale of
telecommunication tower assets and received a consideration of USD 11m. Since
the Group has leased back a portion of such tower assets, a corresponding
portion of the total gain on the sale has been recognized as a deduction in
the cost of the Right of Use asset for the assets leased back with the
remaining gain (amounting to USD 4m) recorded as 'other non-operating income'
and presented as an exceptional item (refer to Note 6(1)). The Group has
recognised Right of Use assets and Lease Liabilities for the portion of towers
leased back by the Group.
e) In line with the agreement to sell, signed by the Group on 23
March 2021 with Helios Towers for gross consideration of USD 52m, during the
year ended 31 March 2022, the Group completed the first and second close of
the sale of the Group's subsidiary which holds tower assets in Madagascar and
received consideration of USD 46m. Since the Group has leased back a portion
of such tower assets, a corresponding portion of the total gain on the sale
has been recognized as a deduction in the cost of the Right of Use asset for
the assets leased back with the remaining gain (amounting to USD 5m) recorded
as 'other non-operating income' and presented as an exceptional item (refer to
Note 6(1)). The Group has recognised Right of Use assets and Lease Liabilities
for the portion of towers leased back by the Group.
The details of the consideration received, assets and
liabilities over which control was lost and gain recorded during the year are
as follows:
As of
A. Consideration received 2 November 2021
Fair value of consideration (first and subsequent closings) 49
B. Net assets disposed
Non-current assets
Property Plant and Equipment 18
Others 2
Current Assets
Cash and Cash Equivalents 2
Others 1
Total Assets 23
Current Liabilities
Trade Payables 4
Non-Current Liabilities
Others 2
Total Liabilities 6
Net Assets 17
C. Gain on Disposal((1)) 5
D. Net Cash inflow on disposal
Consideration received in Cash and Cash Equivalents (at first and second 46
close)
((1)) Gain on disposal has been computed after adjusting
foreign currency translation losses reclassified to the statement of
comprehensive income amounting to USD 6m and a gain amounting to USD 21m
pertaining to the portion of assets leased back by the Group which has been
recognized as a deduction in the right of use asset.
f) In line with the agreement to sell, signed by the Group on 23
March 2021 with Helios Towers for gross consideration of USD 55m, the Group
completed the first close of the sale of the Group's subsidiary which holds
tower assets in Malawi on 24 March 2022 and received a portion of
consideration amounting to USD 34m. Since the Group has leased back a portion
of such tower assets, a corresponding portion of the total gain on the sale
has been recognized as a deduction in the cost of the Right of Use assets for
the assets leased back with the remaining gain (amounting to USD 19m) recorded
as 'other non-operating income' and presented as an exceptional item (refer to
Note 6(1)). The Group has recognised Right of Use assets and Lease Liabilities
for the portion of towers leased back by the Group.
The details of the consideration received, assets and
liabilities over which control was lost and gain recorded during the year is
as follows:
As of
A. Consideration received 24 March 2022
Fair value of consideration received (first and subsequent close) 51
B. Net assets disposed:
Non-current assets
Property Plant and Equipment 31
Right of use assets 3
Others 2
Current Assets
Cash and Cash Equivalents 2
Others 2
Total Assets 40
Current Liabilities
Trade Payables 5
Others 2
Non-Current Liabilities
Deferred tax liability 2
Others 3
Total Liabilities 12
Net Assets 28
C. Gain on Disposal((1)) 19
D. Net Cash inflow on disposal
Consideration received in Cash and Cash Equivalents 34
(1) Gain on disposal has been computed after adjusting
Foreign Currency Translation gains reclassified to the statement of
comprehensive income amounting to USD 11m and a gain amounting to USD 15m
pertaining to the portion of assets leased back by the Group which has been
recognized as a deduction in the right of use
asset.
g) In March 2021, the Group had entered into agreements with TPG's
The Rise Fund and Mastercard for the sale of non-controlling interests in one
of the Group's subsidiaries (AMC BV) by way of secondary sale of AMC BV's
shares.
On 02 August 2021, the Group completed the first close of the
transaction, whereby The Rise Fund and Mastercard invested USD 150m and USD
75m respectively.
On 30 July 2021, the Group further entered into an agreement with
Qatar Holdings LLC for the sale of further non-controlling interests in AMC BV
and completed the first close of the transaction on 19 August 2021 receiving
USD 150m from Qatar Holdings LLC.
On 16 November 2021, the Group completed the second close of the above
transactions whereby The Rise Fund and Qatar Holdings LLC each invested a
further USD 50m, and Mastercard a further USD 25m.
On 15 December 2021, the Group further entered into an agreement with
Chimetech Holding Limited for the sale of further non-controlling interests in
AMC BV and received USD 50m from Chimetech Holding Limited.
While the Group continues to control AMC BV, for all the above-mentioned
investments, the Group has recorded a non-controlling interest including
shares held within Escrow. These shares may transfer to the investors at the
end of a restructuring period as per the terms of the agreements. The Group
has concluded that it does not control the shares placed in Escrow and hence
has recorded these shares as part of the Group's non-controlling interests.
Under the terms of the transaction, and in very limited
circumstances (including in the event that there is no Initial Public Offering
of shares in AMC BV within four years of first close), The Rise Fund and
Mastercard would have the option, so as to provide liquidity to them, to sell
its shares in AMC BV to Airtel Africa or its affiliates at fair market value
(determined by a mutually agreed merchant bank using an agreed internationally
accepted valuation methodology). The Group has determined that successfully
executing the IPO is not within complete control of the Group and has thus
recorded a put option liability at the present value of the expected buy-back
amount which is also the maximum amount, by debiting 'transactions with NCI
reserve'. Subsequent re-measurement of this liability has been recognised as a
finance cost.
h) On 1 December 2021, Airtel Nigeria completed the buy-back of
8.22% non-controlling interest (out of existing 8.26%) from its
non-controlling shareholders at a total cost of NGN 67.6 billion
(approximately USD 163m) including directly attributable transaction costs.
The difference between such cost and the carrying value of such
non-controlling interest, has been recorded in 'Transaction with NCI reserve'
as part of owner's equity.
i) On 7 March 2022, Bharti Airtel International (Netherlands)
B.V., a subsidiary of the Group, completed early repayment of its USD 505m,
5.125% Guaranteed Senior Notes, with original maturity due in March 2023 using
cash balances available at the Group level. The settlements included all
outstanding accrued interest up to the redemption date and an applicable
premium. The difference of USD 19m between the carrying value of such bonds
and the total consideration paid has been recognized as a finance cost in the
statement of comprehensive income and presented as an exceptional item.
j) During the year ended 31 March 2022, Airtel Kenya Networks
Limited ('Airtel Kenya'), a subsidiary of the Group, entered into an agreement
with the Communications Authority of Kenya regarding its 2015-2025 operating
and spectrum licence. Under this agreement, Airtel Kenya agreed to pay a total
of USD 20m in four instalments over the next three years. The first instalment
of USD 5m has been paid and for the balance amount, a deferred payment
liability has been recognized in the consolidated financial statements. This
cost has been charged to the statement of comprehensive income and presented
as an exceptional item.
5. Segmental Information
The group's segment information is provided on the basis of geographical
clusters to the group's chief executive officer i.e. chief operating decision
maker (CODM) for the purposes of resource allocation and assessment of
performance. The group's reporting segments are as follows:
Nigeria
East Africa - Comprising operations in Kenya, Malawi, Rwanda, Tanzania, Uganda
and Zambia
Francophone Africa - Comprising operations in Chad, Congo B, DRC, Gabon,
Madagascar, Niger and Seychelles
Each segment derives revenue from mobile services, mobile money and other
services. Expenses, assets and liabilities primarily related to the corporate
headquarters 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 i.e. earnings before interest, tax,
depreciation and amortisation before exceptional items. In March 2021,
Underlying EBITDA was also adjusted for charitable donations. This is the
measure reported to the CODM for the purpose of resource allocation and
assessment of segment performance.
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 change occurs.
The 'Eliminations/Adjustments' column comprises inter-segment revenues
eliminated upon consolidation and Group accounting policy alignments.
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 are reflected
in the 'elimination /adjustment' column.
Summary of the segmental information and disaggregation of revenue for the
year ended and as of 31 March 2022 is as follows:
Unallocated Eliminations
Nigeria East Africa Francophone Africa Total
Revenue from external customers
Voice revenue 984 782 592 - - 2,358
Data revenue 734 457 334 - - 1,525
Mobile money revenue((1)) 0 326 98 - - 424
Other revenue((2)) 157 146 104 - - 407
1,875 1,711 1,128 - - 4,714
Inter-segment revenue 3 6 3 - (12) -
Total revenue 1,878 1,717 1,131 - (12) 4,714
Segment results: Underlying EBITDA 1,037 848 464 (38) (0) 2,311
Less:
Depreciation and amortisation 268 240 203 33 0 744
Finance costs 441
Finance income (19)
Other non-operating Income, (net) (111)
Share of profit of associate (0)
Exceptional items pertaining to operating profit - 32 - - 32
Profit before tax 1,224
Other segment items
Capital expenditure 251 271 125 9 - 656
As of 31 March 2022
Segment assets 2,254 2,394 1,720 27,422 (23,426) 10,364
Segment liabilities 1,437 2,869 2,495 14,491 (14,577) 6,715
Investment in associate (included in segment assets above) - - 6 - - 6
(1) intra-segment elimination of USD 129m adjusted with Mobile money revenue.
It includes USD 85m pertaining to East Africa and balance USD 44m pertaining
to Francophone Africa.
(2) it 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 and as of 31 March 2021 is as follows:
Francophone Africa Unallocated Eliminations
Nigeria East Africa Total
Revenue from external customers
Voice revenue 896 649 558 0 - 2,103
Data revenue 549 354 254 - - 1,157
Mobile money revenue ((1)) 0 227 74 - - 301
Other revenue ((2)) 104 147 96 - - 347
1,549 1,377 982 0 - 3,908
Inter-segment revenue 3 4 3 - (10) -
Total revenue 1,552 1,381 985 0 (10) 3,908
Segment results: Underlying EBITDA 839 631 364 (42) - 1,792
Less:
Depreciation and amortisation 236 221 207 17 - 681
Finance costs 432
Finance income (9)
Share of profit of associate (1)
Charitable donation 1 2 1 2 - 6
Exceptional items pertaining to operating profit - - (14) - - (14)
Profit before tax 697
Other segment items
Capital expenditure 275 249 88 2 - 614
As of 31 March 2021
Segment assets 1,889 2,042 1,791 29,207 (24,937) 9,992
Segment liabilities 1,192 2,989 2,715 16,907 (17,164) 6,639
Investment in associate (included in segment assets above) - - 4 - - 4
(1) intra-segment elimination of USD 100m adjusted with mobile money revenue.
It includes USD 64m pertaining to East Africa and balance USD 36m pertaining
to Francophone Africa.
(2) it includes messaging, value added services, enterprise, site sharing and
handset sale revenue.
Geographical information disclosure on non-current assets (PPE, CWIP, ROU,
Intangible assets including goodwill and intangible assets under development):
As of
31 March 2022 31 March 2021
United Kingdom 1 1
Nigeria 1,670 1,455
Netherlands (including goodwill) 3,773 3,805
Others 2,529 2,341
Total 7,973 7,602
Additional product related information:
Currently, based on the information provided to the CODM for the purposes of
resource allocation and assessment of performance, Group's segments are
geographical clusters in which the Group operates. The Group also presents
additional product-wise information to investors on a regular basis, however
products do not currently meet the requirements of being operating segments
for the Group. Given the increasing focus of the Group on mobile money
services, the Directors have decided to provide additional disclosure on a
product basis within this operating segment note, consistent with the
information provided within the strategic report. The Group will continue
re-assess its definition and presentation of operating segments, particularly
in respect of mobile money as the size and importance to the Group grows.
For the year ended
31 March 2022 31 March 2021
Mobile Services Mobile Money Eliminations/ Total Mobile Services Mobile Money Eliminations/ Total
Adjustment Adjustment
Revenue 4,294 553 (133) 4,714 3,612 401 (105) 3,908
Underlying EBITDA 2,077 270 (36) 2,311 1,639 195 (42) 1,792
Depreciation and amortization 697 14 33 744 654 10 17 681
Capital Expenditure 621 25 10 656 580 32 2 614
6. Exceptional items
Underlying profit before tax excludes the following exceptional items:
For the year ended
31 March 2022 31 March 2021
Profit before tax 1,224 697
Add: Exceptional items
- Gain on sale of tower assets ((1)) (111) -
- Spectrum fee agreement cost ((2)) 20 -
- Bond prepayment cost ((3)) 19 -
- Provision for settlement of contractual dispute ((4)) 12 -
- Service revenues ((5)) - (20)
- Employee restructuring cost ((6)) - 6
(60) (14)
Underlying profit before tax 1,164 683
(1) Represents the gain on the sale of telecommunication tower assets
in the Group's subsidiaries in Tanzania, Rwanda, Madagascar, and Malawi,
(refer to Note 4(c) to 4(f)), as part of the Group's strategic asset
monetisation programme recognised in other non-operating income.
(2) Represents cost of agreeing historical spectrum fees in one of
the Group's subsidiaries (refer to Note 4(j)) recognised in license fees and
spectrum usage charges.
(3) Comprises cost of prepaying USD 505m bonds with original maturity
of March 2023 (refer to Note 4(i)) recognised in finance costs.
(4) Represents provision for expected settlement of a contractual
dispute in which one of the Group's subsidiaries is a party recognised in
other operating expenses.
(5) Represents recognition of revenue pertaining to earlier years on a
cumulative catch-up basis, arising out of a settlement agreement entered with
a customer in one of the Group's subsidiaries in Niger.
(6) Comprises the cost of employee restructuring completed during the
year ended 31 March 2021 in one of the Group's subsidiaries, including
settlement of severance pay defined benefit plans recognised in employee
benefit expenses.
Underlying profit after tax excludes the following exceptional items:
For the year ended
31 March 2022 31 March 2021
Profit after tax 755 415
-Exceptional items (as above) (60) (14)
- Tax on above exceptional items (2) -
- Deferred tax asset recognition ((1)) - (36)
(62) (50)
Underlying profit after tax 693 365
(1) During the year ended 31 March 2021, the Group recognised deferred tax
assets in Airtel Tanzania. Airtel Tanzania had carried forward losses and
temporary differences on which deferred tax was not recognised in the past.
Considering that Airtel Tanzania has been in continuous and cumulative profits
and on the basis of likely timing and the level of future taxable profits, the
Group has determined that it is now probable that taxable profits will be
available against which the tax losses and temporary differences can be
utilised in the foreseeable future. Consequently, the deferred tax asset
recognition criteria are met, leading to recognition of USD 36m during the
year ended 31 March 2021.
Profit attributable to non-controlling interests include benefit of USD 33m
and USD 19m during the year ended 31 March 2022 and 2021 respectively,
relating to the above exceptional items.
7. Income tax
The tax expense is as follows:
For the year ended
31 March 2022 31 March 2021
Current tax 347 242
Deferred tax 122 40
Income Tax expense 469 282
8. Earnings per share ('EPS')
For the year ended
31 March 2022 31 March 2021
Profit for the year attributable to owners of the Company 631 339
Weighted average ordinary shares outstanding for basic EPS 3,754,179,962 3,757,550,081
Basic EPS 16.8c 9.0c
The details used in the computation of diluted EPS:
For the year ended
31 March 2022 31 March 2021
Profit for the year attributable to owners of the Company 631 339
Weighted average ordinary shares outstanding for diluted EPS((1)(2)) 3,760,109,303 3,759,122,452
Diluted EPS 16.8c 9.0c
(1) The difference between the basic and diluted number of shares at
the end of March 2022 being 5,929,341 (March 2021: 1,572,371) relates to
awards committed but not yet issued under the Group's share-based payment
schemes.
(2) Deferred shares have not been considered for EPS computation as
they do not have right to participate in profits.
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 2022 and 31 March 2021:
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 2020 50 47 26 2,408 25 24 37 661 3,278 259
Additions / capitalization 1 1 0 648 14 0 9 26 699 611
Disposals / adjustments (1) (1) (0) (0) (32) (1) (0) (0) (0) (34) (696)
Transferred to assets held for sale - - - (77) - 0 - (0) (77) (0)
Foreign currency translation impact 0 (2) 1 (89) (1) 0 (1) (11) (103) (8)
Balance as of 31 March 2021 50 46 27 2,858 37 24 45 676 3,763 166
Additions / capitalization 1 0 2 543 28 0 14 38 626 653
Disposals / adjustments (1) (0) (0) (2) (285) (2) (2) (4) (1) (296) (627)
Foreign currency translation impact (2) 1 (1) (71) (1) (0) 0 (10) (84) (3)
Balance as of 31 March 2022 49 47 26 3,045 62 22 55 703 4,009 189
Accumulated Depreciation
Balance as of 1 April 2020 42 15 1 722 9 22 19 616 1,446 -
Charge 2 3 0 341 6 1 9 27 389 -
Disposals / adjustments (1) (0) (0) 0 (28) (0) (1) (0) 1 (28) -
Transferred to assets held for sale - - - (58) - (0) - (0) (58)
Foreign currency translation impact 0 (1) (0) (41) (0) 0 (1) (9) (52) -
Balance as of 31 March 2021 44 17 1 936 15 22 27 635 1,697 -
Charge 1 3 0 364 10 0 9 31 418 -
Disposals / adjustments (1) 0 (0) (1) (241) (2) (2) (3) (3) (252) -
Foreign currency translation impact (1) 0 (0) (56) (0) (0) (1) (10) (68) -
Balance as of 31 March 2022 44 20 0 1,003 23 20 32 653 1,795 -
Net carrying value
As of 1 April 2020 8 32 25 1,686 16 2 18 45 1,832 259
As at 31 March 2021 6 29 26 1,922 22 2 18 41 2,066 166
As at 31 March 2022 5 27 26 2,042 39 2 23 50 2,214 189
(1) Related to the reversal of gross carrying value and accumulated
depreciation on retirement of PPE and reclassification from one category of
asset to another.
(2) Includes PPE pledged against the Group's Borrowings outstanding
of USD 50m as at 31 March 2022 and 31 March 2021.
(3) The carrying value of capital work-in-progress as at 31 March
2022 and 2021 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 2022 and 31 March 2021:
Goodwill
Balance as of 1 April 2020 3,943
Foreign currency translation impact (108)
Balance as of 31 March 2021 3,835
Balance as of 1 April 2021 3,835
Foreign currency translation impact (8)
Balance as of 31 March 2022 3,827
11. Impairment review
The carrying amount of goodwill is attributed to the following groups of CGUs:
As of
31 March 2022 31 March 2021
Nigeria 1,275 1,298
East Africa 1,835 1,821
Francophone Africa 717 716
3,827 3,835
The Group tests goodwill for impairment annually on 31 December. The carrying
amount of goodwill as of 31 December 2021 was USD 1,277m, USD 1,861m and USD
719m for Nigeria, East Africa and Francophone Africa 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 purpose 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
market is underpenetrated 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 licences and network assets
are at an average of ten years, 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 impact the
headroom by more than 5% in any of the group of CGUs as compared to the
headroom 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.
In assessing the Group's prospects, the Directors considered 5G cellular
network potential in the markets which the Group operates. The Group's first
endeavour is to secure spectrum for 5G launch and roll out 5G network in key
markets. Given the relatively low 4G customer penetration in the countries
where it operates, the Group will continue to focus on its strategy to expand
its data services and increase data customer penetration by leveraging and
expanding its leading 4G network.
During the year, the Central Bank of Nigeria gave Airtel Africa's subsidiary
Smartcash Payment Service Bank Limited (Smartcash) approval in principle to
operate a payment service bank (PSB) business in Nigeria. The PSB licence
allows Smartcash to accept deposits from individuals and small businesses,
carry out payment and remittance services within Nigeria, and issue debit and
prepaid cards among other activities set out by the Central Bank of Nigeria
(CBN). As of the date of impairment testing, the Group had in-principle
approval of such licence in hand. Subsequent to the year end, in April 2022,
the Group has received the final approval from the Central Bank of
Nigeria for a full PSB licence affording the Group the opportunity to
deliver a full suite of mobile money services in Nigeria.
Management is in early stages of considering the impact of climate change.
Based on the analysis conducted so far, the Group is satisfied that the impact
of climate change does not lead to an impairment as at 31 December 2021 and is
adequately covered as part of the sensitivities disclosed below.
The 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 2021
were as follows:
Assumptions Nigeria East Africa Francophone Africa
Pre tax Discount Rate 24.35% 16.17% 15.43%
Capital expenditure (as % of Revenue) 8% - 15% 7% - 15% 7% - 12%
Long term growth rate 2.65% 5.31% 5.46%
At 31 December 2021, 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 Discount rate reflects the market assessment of the risks specific to the
group of CGUs and estimated based on the weighted average cost of capital for
each respective group of CGUs.
Capital expenditures The cash flow forecasts of capital expenditure are based on experience after
considering the capital expenditure required to meet coverage and capacity
requirements relating to voice, data and mobile money services.
Growth rates The growth rates used are in line with the 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.
At 31 December 2021, the 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 USD 5,579m for East Africa (173%) and USD 2,559m for
Francophone Africa (160%). For Nigeria, the recoverable amount exceeds the
carrying amount by USD 2,842m (104%) including the cash flows of PSB licence
which was received subsequent to the impairment testing date. Excluding such
cash-flows did not result in any impairment in Nigeria. The Group therefore
concluded that no impairment was required to the Goodwill held against each
group of CGUs.
• 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
CGU's:
Nigeria East Africa Francophone Africa
Pre tax Discount Rate 43.70% 34.34% 32.63%
The table below presents the increase in isolation in 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 East Africa Francophone Africa
Capital expenditure 9.64% 13.99% 11.06%
No reasonably possible change in the terminal growth rate would cause the
carrying amount to exceed the recoverable amount.
12. Cash and bank balances
Cash and cash equivalents As of
31 March 2022 31 March 2021
Balances with banks
- On current accounts 267 486
- Bank deposits with original maturity of three months or less 281 290
Cheques on hand - 0
Balance held in wallets 89 36
Cash on hand 1 1
638 813
Other bank balances
As of
31 March 2022 31 March 2021
-Term deposits with banks with original maturity of 220 257
More than three months but less than 12 months
-Margin money deposits ((1)) 158 25
-Unpaid dividend 0 0
378 282
(1) Margin money deposits represent amount given as collateral
for legal cases and/or bank guarantees for disputed matters, deposit against
derivative contracts and deposits given against borrowings in one of the
Group's subsidiaries.
For the purpose of the statement of cash flows, cash and cash equivalents are
as follows:
As of
31 March 2022 31 March 2021
Cash and cash equivalents as per balance sheet 638 813
Balance held under mobile money trust 513 440
Bank overdraft (304) (251)
Cash and cash equivalents classified as held for sale - 1
847 1,003
13. Borrowings
Non-current
As of
31 March 2022 31 March 2021
Secured
Term loans 50 50
Less: Current portion (A) (50) (50)
- -
Unsecured
Term loans 655 544
Non- convertible bonds 1,015 2,403
1,670 2,947
Less: Current portion (B) (184) (1,076)
1,486 1,871
1,486 1,871
Current
As of
31 March 2022 31 March 2021
Unsecured
Term loans((1)) 248 92
Bank overdraft 304 250
552 342
Current maturities of long-term borrowings (A+B) 234 1,126
786 1,468
((1)) Term loans as at 31 March 2022, include borrowings against which certain
deposits (included in other bank balances in statement of financial position)
have been placed.
14. Share capital
As of
31 March 2022 31 March 2021
Authorised shares
3,758,151,504 Ordinary shares of USD 0.5 each 1,879 1,879
(March 2021: 3,758,151,504)
3,081,744,577 Deferred shares of USD 0.5 each 1,541 1,541
(March 2021:3,081,744,577)
3,420 3,420
Issued, Subscribed and fully paid-up shares
3,758,151,504 Ordinary shares of USD 0.5 each (March 2021: 3,758,151,504) 1,879 1,879
3,081,744,577 Deferred shares of USD 0.5 1,541 1,541
each
(March 2021: 3,081,744,577)
3,420 3,420
Terms/rights attached to equity shares
The company has the following two classes of ordinary shares:
• Ordinary shares having par value of USD 0.5 per share. Each holder of
equity shares is entitled to cast one vote per share and carries a right to
dividends.
• Deferred shares of USD 0.5 each. These deferred shares are not listed and
are intended to be cancelled in due course. No share certificates are to be
issued in respect of the deferred shares. These are not freely transferable
and would not affect the net assets of the Company. The deferred shareholders
shall have no right to receive any dividend or other distribution or return
whether of capital or income. On a return of capital in a liquidation, the
deferred shareholders shall have the right to receive the nominal amount of
each deferred share held, but only after the holder of each 'Other' share
(i.e. shares other than the deferred shares) in the capital of the Company
shall have received the amount paid up on each such Other share held and the
payment in cash or in specie of £100,000 (or its equivalent in any other
currency) on each such Other shares held. The Company shall have an
irrevocable authority from each holder of the deferred shares at any time to
purchase all or any of the deferred shares without obtaining the consent of
the deferred shareholders in consideration of the payment of an amount not
exceeding one US cent in respect of all the deferred shares then being
purchased.
15. Contingent liabilities and commitments
Contingent liabilities As of
31 March 2022 31 March 2021
(a) Taxes, Duties and Other demands (under adjudication / appeal / dispute)
-Income tax 18 23
- Value added tax 30 30
-Customs duty & Excise duty 9 8
-Other miscellaneous demands 6 9
(b) Claims under legal and regulatory cases including 82 87
arbitration matters ((1) (2))
145 157
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. Other than amounts provided
where the Group believes there is a probable settlement and contingent
liabilities where the Group has assessed the additional possible amounts,
there are no other legal, tax or regulatory obligations which may be expected
to be material to the financial statements.
The movement in contingent liabilities during the year ended 31 March 2022 of
USD 12m primarily comprise a reduction on account of settlement of an Income
tax assessment amounting to approximately USD3m, closure of other
miscellaneous demand amounting to approximately USD3m and rest of the cases
are individually immaterial.
((1)) 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 UDS 0.8m). In 2014, the vendor-initiated arbitration
proceedings claiming a sum of approximately CFA 1.9 billion (approximately UDS
3.2m). In mid-May 2019, lower courts imposed a penalty of CFA 35 billion
(approximately UDS 60m), 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 honourable judge has
further re-examined the facts from the representatives of subsidiary against
this case. The court will provide further update on the upcoming proceedings
in due course.
((2)) One of the subsidiaries of the Group is involved in a dispute with one
of its distributors, with respect to alleged unpaid commissions, bonuses and
benefits, totalling approximately USD 12m, over a period of around 11 years of
its business relationship with the subsidiary. In March 2012, the distributor
filed a claim against the subsidiary in the High Court. On 4 October 2016, the
High Court ruled against the subsidiary and ordered to pay the claimed amount
of approximately USD 12m to the distributor. On 5 October 2016, the subsidiary
filed an appeal in the Court of Appeal against the order of the High Court,
which on 24 July 2020 was ruled against the subsidiary. On 7 August 2020, the
subsidiary filed an appeal against the decision of the Court of Appeal, in the
Supreme Court. Record of appeal has been transmitted to the Supreme Court and
briefs of argument are currently being prepared.
Despite the strength of the subsidiary's line of defence, as both the High
Court and Court of Appeal have ruled against the subsidiary, it is appropriate
to disclose this matter as contingent liability for USD 12m, pending the
decision of the Supreme Court. No provision has been made against the said
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 2022 and 31 March 2021 amounting to USD
8m and USD 12m 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, the
amounts with respect to these have been disclosed under capital commitments,
contingencies and liabilities, as applicable.
(ii) Commitments
Capital Commitments
The Group has contractual commitments towards capital expenditure (net of
related advances paid) of
USD 295m and USD 232m as of 31 March 2022 and 31 March 2021 respectively.
16. Related Party disclosure
List of related parties
i) Parent company
Airtel Africa Mauritius Limited
ii) Intermediate parent entity
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) 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
Airtel Ghana Limited (till 12 October 2021)
Singapore Telecommunication Limited
vi) Key Management Personnel ('KMP')
a. Executive director
Olusegun Ogunsanya (since October 2021)
Raghunath Venkateswarlu Mandava (till September 2021)
Jaideep Paul (since June 2021)
b. Non-Executive directors
Sunil Bharti Mittal
Awuneba Ajumogobia
Douglas Baillie
John Danilovich
Andrew Green
Akhil Gupta
Shravin Bharti Mittal
Annika Poutiainen
Ravi Rajagopal
Arthur Lang (till October 2020)
Kelly Bayer Rosmarin (since October 2020)
Tsega Gebreyes (since October 2021)
c. Others
Olusegun Ogunsanya (till September 2021)
Jaideep Paul (till May 2021)
Ian Ferrao
Michael Foley
Razvan Ungureanu
Luc Serviant
Daddy Mukadi
Neelesh Singh
Ramakrishna Lella
Olivier Pognon (till 15 October 2021)
Edgard Maidou (since 16 October 2021)
Rogany Ramiah
Stephen Nthenge
Vimal Kumar Ambat (since February 2021)
Ashish Malhotra (since October 2020)
Vinny Puri (since March 2021)
C Surendran (since August 2021)
Olubayo Adekanmbi (since December 2021)
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 2022 and 2021
respectively, are described below:
The summary of transactions with the above-mentioned parties is as follows:
For the year ended
31 March 2022 31 March 2021
Relationship Parent company Intermediate parent entity Fellow subsidiaries Associates Other related parties Parent company Intermediate parent entity Fellow subsidiaries Associates Other related parties
Sale / rendering of services - 13 59 - 0 - 6 66 - 1
Purchase / receiving of services - 19 54 0 0 - 17 52 1 0
Rent and other charges - 1 - - - - 1 - - -
Guarantee and collateral fee paid - 6 - - - - 10 - - -
Purchase of assets - - 2 - - - 0 0 - -
Dividend Paid 95 - - - - 95 - - - -
The outstanding balance of the above mentioned related parties are as follows:
Relationship Parent company Intermediate parent entity Fellow subsidiaries Joint venture Associate Other related parties
As of 31 March 2022
Trade payables - 10 33 - 0 -
Trade receivables - 5 36 - - -
Corporate guarantee fee payable - 3 - - - -
Guarantees and collaterals taken (including performance guarantees) - 2,000 - - - -
Reimbursement asset - 25 - - - -
As of 31 March 2021
Trade payables - 9 29 - 1 2
Trade receivables - 3 37 - - 3
Corporate guarantee fee payable - 2 - - - -
Guarantees and collaterals taken (including performance guarantees) - 7,056 - - - -
Key management compensation
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 key management personnel
were as follows:
For the year ended
31 March 2022 31 March 2021
Short-term employee benefits 10 8
Performance linked incentive 3 3
Share-based payment 2 1
Other long term benefits 2 4
Other benefits 1 1
18 17
17. Fair Value of financial assets and liabilities
The category wise 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 2022 31 March 2021 31 March 2022 31 March 2021
Financial assets
FVTPL
Derivatives
- Forward and option Level 2 2 12 2 12
contracts
- Currency swaps and Level 2 3 0 3 0
interest rate swaps
- Cross currency swaps Level 3 1 1 1 1
Other bank balances Level 2 16 - 16 -
Investments Level 2 0 0 0 0
Amortised cost
Trade receivables 123 113 123 113
Cash and cash equivalents 638 813 638 813
Other bank balances 362 282 362 282
Balance held under mobile money trust 513 440 513 440
Other financial assets 131 83 131 83
1,789 1,744 1789 1,744
Financial liabilities
FVTPL
Derivatives
- Forward and option Level 2 4 6 4 6
contracts
- Currency swaps and Level 2 0 2 0 2
interest rate swaps
- Cross currency swaps Level 3 4 3 4 3
- Embedded derivatives Level 2 1 1 1 1
Amortised cost
Borrowings - fixed rate Level 1 1,015 2,403 1,016 2,479
Borrowings - fixed rate Level 2 267 100 264 98
Put option liability Level 3 579 - 579 -
Borrowings 990 836 990 836
Trade payables 404 366 404 366
Mobile money wallet balance 496 432 496 432
Other financial liabilities 516 539 516 539
4,276 4,688 4,274 4,762
The following methods/assumptions were used to estimate the fair values:
· The carrying value of bank deposits, trade receivables, trade
payables, 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 to buy back the stake
held by non-controlling interest in AMC BV (refer to Note 4(g)) 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 and applying a cap thereon.
During the year ended 31 March 2022 and year ended 31 March 2021 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 financial assets/liabilities as
of 31 March 2022 and 31 March 2021:
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
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 2022 31 March 2021
Opening Balance (3) -
Issuance((1)) - -
Recognised in finance costs in profit and loss(unrealized)((2)) 0 (3)
Closing Balance (3) (3)
(1) The Group during the year ended 31 March 2021 had entered into a Cross
Currency Swap (CCS) in one of its subsidiaries, which was accounted for as
FVTPL. The fair value of CCS was 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 was
not available, the interest rates were considered to be significant
unobservable inputs to the valuation of this CCS.
(2) These amounts represent the amounts recognised in the financial statements
during the year excluding the initial recognition deferment impact.
· Put option liability (refer to note 4(g))
For the year ended
31 March 2022 31 March 2022
Opening Balance - -
Liability recognized by debiting transaction with NCI reserve 575 -
Recognized in finance costs in profit and loss (unrealized) 4 -
Closing Balance 579 -
18. Assets and Liabilities held for sale
Assets and liabilities of disposal groups held for sale at 31 March 2021
related to our telecommunication tower subsidiary in Madagascar (part of
Francophone Africa segment) and 162 towers and related liabilities in Rwanda
(part of East Africa segment).
During the year ended 31 March 2022, the sale of 162 towers in Rwanda and
tower company in Madagascar has been completed and thus the related assets and
liabilities held for sale have been de-recognised.
The disposal groups were stated at their carrying
values and comprised the following assets and liabilities:
As of
31 March 2022 31 March 2021
Assets of disposal group classified as held for sale
Property, plant and equipment - 19
Capital work-in-progress - 0
Right of use assets - 5
Income tax assets - 0
Deferred tax assets - 2
Trade receivables - 0
Cash and cash equivalents - 1
Loans and security deposits - 0
Other current assets - 4
- 31
Liabilities of disposal group classified as held for sale
Lease liabilities - 7
Provisions - 1
Deferred tax liabilities - 1
Trade payables - 2
Other current liabilities - 8
- 19
As of 31 March 2022, the cumulative other comprehensive income relating to the
disposal group classified as held for sale is Nil (as of 31 March 2021: other
comprehensive loss of USD 4m).
19. 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 cents per share on 10
May 2022.
· In April 2022, one of the Group's subsidiaries, SMARTCASH Payment
Service Bank limited, has received the final approval from the Central Bank
of Nigeria for a full Payment Service Bank (PSB) licence affording the Group
the opportunity to deliver a full suite of mobile money services in Nigeria
· In April 2022, one of the Group's subsidiaries, Airtel Mobile
Commerce Nigeria Ltd, has been awarded with full super agent licence by the
Central Bank of Nigeria. The licence allows the Group to create an agency
network that can service the customers of licenced Nigerian banks, payment
service banks and licenced mobile money operators in Nigeria.
Appendix
Additional information pertaining to three months ended March 31, 2022
Consolidated Statement of Comprehensive Income (unaudited)
(All amounts are in US Dollar Millions; unless stated otherwise)
For three months ended
31 March 2022 31 March 2021
Income
Revenue 1,222 1,038
Other income 2 1
1,224 1,039
Expenses
Network operating expenses 213 183
Access charges 104 97
License fee and spectrum usage charges 78 53
Employee benefits expense 77 67
Sales and marketing expenses 60 50
Impairment loss on financial assets (1) (1)
Other expenses 115 97
Depreciation and amortisation 188 174
834 720
Operating profit 390 319
Finance costs 136 106
Finance income (5) (2)
Other non-operating income (101) -
Share of profit for associate 0 (0)
Profit before tax 360 215
Tax expense / (credit) 120 61
Profit for the period 240 154
Profit before tax (as presented above) 360 215
Add: Exceptional items (net) (51) (1)
Underlying profit before tax 309 214
Profit after tax (as presented above) 240 154
Add: Exceptional items (net) (52) (22)
Underlying profit after tax 188 132
Other comprehensive income ('OCI')
Items to be reclassified subsequently to profit or loss:
Net losses due to foreign currency translation differences (39) (94)
Share of OCI of associate 1 -
Net loss on net investments hedge - 9
(38) (85)
Items not to be reclassified subsequently to profit or loss:
Re-measurement gain on defined benefit plans 0 (0)
Tax expense on above (0) 0
0 (0)
Other comprehensive loss for the period (38) (85)
For three months ended
31 March 2022 31 March 2021
Total comprehensive income for the period 202 69
Profit for the period attributable to: 240 154
Owners of the Company 190 132
Non-controlling interests 50 22
Other comprehensive loss for the period attributable to: (38) (85)
Owners of the Company (38) (80)
Non-controlling interests (0) (5)
Total comprehensive income for the period attributable to: 202 69
Owners of the Company 152 52
Non-controlling interests 50 17
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
Table reference(1)
Underlying revenue Revenue · Exceptional items The Group defines underlying revenue as revenue for the period adjusted for
exceptional items.
The directors view underlying revenue to be a meaningful measure to analyse
the Group's revenue, excluding exception items.
Table A Exceptional items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder comparison of the
Group's performance on a period to period basis and could distort the
understanding of our performance for the period and the comparability between
periods and hence are adjusted to arrive at underlying revenue.
Underlying EBITDA and margin Operating profit · Depreciation and amortisation The Group defines underlying EBITDA as operating profit/(loss) for the period
before depreciation and amortisation and adjusted for exceptional items.
· Exceptional items
The Group defines underlying EBITDA margin as underlying EBITDA divided by
underlying revenue.
Underlying 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. Underlying 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, underlying
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
Table B that a measure which removes this volatility improves comparability of the
Group's results period on period and hence is adjusted to arrive at underlying
EBITDA and margin.
Exceptional items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder comparison of the
Group's performance on a period-to-period basis and could distort the
understanding of our performance for the period and the comparability between
periods and hence are adjusted to arrive at underlying EBITDA and margin.
Underlying profit / (loss) before tax Profit / (loss) before tax · Exceptional items 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.
Table C Exceptional items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder comparison of the
Group's performance on a period-to-period basis and could distort the
understanding of our performance for the period and the comparability between
periods and hence are adjusted to arrive at underlying profit/(loss) before
tax.
Effective tax rate Reported tax rate · Exceptional items 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.
Exceptional tax items or any tax arising on exceptional items are additional
specific items that because of their size, nature or incidence in the results,
are considered to hinder comparison of the Group's performance on a
period-to-period basis and could distort the understanding of our performance
for the period and the comparability between periods and hence are adjusted to
Table D arrive at effective tax rate.
Foreign exchange rate movements are specific items that are non-tax deductible
in a few of the entities which are loss making and where DTA is not yet
triggered and hence are considered to hinder comparison of the Group's
effective tax rate on a period-to-period basis and therefore excluded to
arrive at effective tax rate.
One-off tax impact on account of prior period adjustment, any tax litigation
settlement and tax impact on permanent differences are additional specific
items that because of their size and frequency in the results, are considered
to hinder comparison of the Group's effective tax rate on a period-to-period
basis.
Underlying profit/(loss) after tax Profit/(loss) for the period · Exceptional items 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.
Table E Exceptional items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder comparison of the
Group's performance on a period-to-period basis and could distort the
understanding of our performance for the period and the comparability between
periods and hence are adjusted to arrive at underlying profit/(loss) after
tax.
Earnings per share before exceptional items EPS · Exceptional items 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.
Table F Exceptional items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder comparison of the
Group's performance on a period-to-period basis and could distort the
understanding of our performance for the period and the comparability between
periods and hence are adjusted to arrive at earnings for the purpose of
earnings per share before exceptional items.
Operating 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 and exceptional items, less 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 Table G
· Exceptional items
· 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 underlying EBITDA.
· Term deposits with banks
The directors view net debt and the leverage ratio to be meaningful measures
· Deposits given against borrowings/ non-derivative financial instruments Table H 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 to arrive at underlying EBIT The Group defines return on capital employed ('ROCE') as underlying EBIT
divided by average capital employed.
The directors view ROCE as a financial ratio that measures the Group's
profitability and the efficiency with which its capital is being utilised.
The Group defines underlying EBIT as operating profit/(loss) for the period
adjusted for exceptional items.
Exceptional items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder comparison of the
Group's performance on a period-to-period basis and could distort the
Table I understanding of our performance for the period and the comparability between
periods and hence are adjusted to arrive at Underlying EBIT.
Capital employed is defined as sum of equity attributable to owners of the
company, non-controlling interests and net debt. Average capital employed is
average of capital employed at the closing and beginning of the relevant
period.
For quarterly computations, ROCE is calculated by dividing underlying EBIT for
the preceding 12 months by the average capital employed (being the average of
the capital employed averages for the preceding four quarters).
(1 Refer "Reconciliation between GAAP and Alternative Performance Measures"
for respective table.)
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 2021. Reported currency percentage change is derived
on the basis of the average actual periodic exchange rates for that financial
period. Variances between constant currency and reported currency percentages
are due to exchange rate movements between the previous financial reporting
period and the current period.
Changes to APMs
Charity and donations are not related to the trading performance of the Group
and hence were adjusted to arrive at underlying EBITDA and margin till
previous periods. However, with launch of our sustainability strategy in
current year, wherein "Access to educational goal" is one of the key goals,
hence, the Group has revisited the definition to include the CSR expense as
part of the underlying EBITDA, margin and operating free cash flow. Given the
size in prior years, no changes have been made to the prior year figures.
During the year following APMs have been removed:
· Free cash flows - since the Group's dividends are no longer
linked to such metric.
· Restated EPS - as this is no longer valid, as there has been no
significant change in the number of shares issued between the current and
previous financial reporting periods.
· Adjusted effective tax rate - since adjustments related to any
tax arising on exceptional items or any exceptional tax items are now adjusted
in arriving at the effective tax rate, the separate APM for adjusted effective
tax rate has been removed.
Reconciliation between GAAP and Alternative Performance Measures
Table A: Underlying revenue
Description Unit of measure Year ended
March 2022 March 2021
Revenue $m 4,714 3,908
Less:
Exceptional items $m - (20)
Underlying revenue $m 4,714 3,888
Table B: Underlying EBITDA and margin
Description Unit of measure Year ended
March 2022 March 2021
Operating profit $m 1,535 1,119
Add:
Depreciation and amortisation $m 744 681
Charity and donation (1) $m - 6
Exceptional items $m 32 (14)
Underlying EBITDA $m 2,311 1,792
Underlying revenue $m 4,714 3,888
Underlying EBITDA margin (%) % 49.0% 46.1%
((1)) Refer changes to APMs in Alternative performance measure (APMs) section.
Table C: Underlying profit / (loss) before tax
Description Unit of measure Year ended
March 2022 March 2021
Profit / (loss) before tax $m 1,224 697
Exceptional items (net) $m (60) (14)
Underlying profit / (loss) before tax $m 1,164 683
Table D: Effective tax rate
Description Unit of measure Year ended
March 2022 Mar
ch
202
1
Profit before taxation Income tax expense Tax rate % Profit before taxation Income tax expense Tax rate %
Reported effective tax rate $m 1,224 469 38.3% 697 282 40.5%
Adjusted for:
Exceptional items (provided below) $m (60) 2 (14) 36
Foreign exchange rate movements for non-DTA operating companies & holding $m 50 - 42 -
companies
One-off adjustment and tax on permanent differences $m (12) (2) - (5)
Effective tax rate $m 1,202 469 39.0% 725 313 43.2%
Exceptional items
1. Deferred tax asset recognition $m - - - 36
2. Service Revenues $m - - (20) -
3. Gain on sale of tower assets $m (111) 0 - -
4. Employee restructuring cost $m - - 6 -
5. Bonds prepayment cost $m 19 - - -
6. Provision for settlement of contractual dispute $m 12 2 - -
7. Spectrum fee agreement cost $m 20 - - -
Total $m (60) 2 (14) 36
Table E: Underlying profit / (loss) after tax
Description Unit of measure Year ended
March 2022 March 2021
Profit / (loss) after tax $m 755 415
Exceptional items $m (62) (50)
Underlying profit / (loss) after tax $m 693 365
Table F: Earnings per share before exceptional items
Description Unit of Year ended
measure
March 2022 March 2021
Profit for the period attributable to owners of the company $m 631 339
Operating and Non-operating exceptional items $m (60) (14)
Tax exceptional items $m (2) (36)
Non-controlling interest exceptional items $m 33 19
Profit for the period attributable to owners of the company- $m 602 308
before exceptional items
Weighted average number of ordinary shares in issue during the financial Million 3,754 3,758
period.
Earnings per share before exceptional items Cents 16.0 8.2
Table G: Operating free cash flow
Description Unit of measure Year ended
March 2022 March 2021
Net cash generated from operating activities $m 2,011 1,666
Add: Income tax paid $m 293 195
Net cash generation from operation before tax $m 2,304 1,861
Less: Changes in working capital
Increase in trade receivables $m 18 8
(Decrease)/Increase in inventories $m (4) 4
(Increase)/Decrease in trade payables $m (34) 38
Increase in mobile money wallet balance $m (64) (139)
Increase in provisions $m (14) (1)
Increase in deferred revenue $m (27) (17)
Decrease in income received in advance $m - 1
Increase in other financial and non-financial liabilities $m (50) (18)
Increase in other financial and non-financial assets $m 144 48
Operating cash flow before changes in working capital $m 2,273 1,785
Other non-cash adjustments $m 6 15
Charity and donation (1) $m - 6
Operating exceptional items $m 32 (14)
Underlying EBITDA $m 2,311 1,792
Less: Capital expenditure $m (656) (614)
Operating free cash flow $m 1,655 1,178
((1)) Refer changes to APMs in Alternative performance measure (APMs) section.
Table H: Net debt and leverage
Description Unit of measure As at As at
March 2022 March 2021
Long term borrowing, net of current portion $m 1,486 1,871
Short-term borrowings and current portion of long-term borrowing $m 786 1,468
Add: Processing costs related to borrowings $m 5 5
Add/(less): Fair value hedge adjustment $m (16) (21)
Less: Cash and cash equivalents $m (638) (813)
Less: Term deposits with banks $m (220) (257)
Less: Deposits given against borrowings/ non-derivative financial instruments $m (122) -
Add: Lease liabilities $m 1,660 1,277
Net debt $m 2,941 3,530
Underlying EBITDA (LTM) $m 2,311 1,792
Leverage (LTM) times 1.3x 2.0x
Table I: Return on capital employed
Description Unit of Year ended
measure
March 2022 March 2021
Operating profit $m 1,535 1,119
Less:
Operating exceptional items $m 32 (14)
Underlying EBIT $m 1,567 1,105
Equity attributable to owners of the Company $m 3,502 3,405
Non-controlling interests (NCI) $m 147 (52)
Net debt (refer Table H) $m 2,941 3,530
Capital employed $m 6,590 6,883
Average capital employed ((1)) $m 6,736 6,705
Return on capital employed % 23.3% 16.5%
((1)) Average capital employed is calculated as average of capital employed at
closing and opening of relevant period. Capital employed at the beginning of
year ended 31 March 2022 and 2021 is $ 6,883m and $ 6,528m respectively.
Glossary
Technical and Industry Terms
4G data customer A customer having a 4G handset and who has used at least 1 MB on any of the
Group's GPRS, 3G & 4G network in the last 30 days.
Airtel Money (mobile money) Airtel Money is the brand name for Airtel Africa's mobile money products and
services. The term is used interchangeably with 'mobile money' when referring
to our mobile money business, finance, operations and activities.
Airtel Money ARPU Mobile money average revenue per user per month. This is derived by dividing
total mobile money revenue during the relevant period by the average number of
active mobile money customers and dividing the result by the number of months
in the relevant period.
Airtel Money customer base Total number of active subscribers who have enacted any mobile money usage
event in last 30 days.
Airtel Money customer penetration The proportion of total Airtel Africa active mobile customers who use mobile
money services. Calculated by dividing the mobile money customer base by the
Group's total customer base.
Airtel Money transaction value Any financial transaction performed on Airtel Africa's mobile money platform.
Airtel Money transaction value per customer per month Calculated by dividing the total mobile money transaction value on the Group's
mobile money platform during the relevant period by the average number of
active mobile money customers and dividing the result by the number of months
in the relevant period.
Airtime credit service A value-added service where the customer can take an airtime credit and
continue to use our voice and data services, with the credit recovered through
subsequent customer recharge. This is classified as a Mobile Services product
(not a Mobile Money product).
ARPU Average revenue per user per month. This is derived by dividing total revenue
during the relevant period by the average number of customers during the
period and dividing the result by the number of months in the relevant period.
Average customers The average number of active customers for a period. Derived from the monthly
averages during the relevant period. Monthly averages are calculated using the
number of active customers at the beginning and the end of each month.
Capital expenditure An alternative performance measure (non-GAAP). Defined as investment in gross
fixed assets (both tangible and intangible but excluding spectrum and
licences) plus capital work in progress (CWIP), excluding provisions on CWIP
for the period.
Constant currency The Group has presented certain financial information that is calculated by
translating the results for the current financial year and previous financial
years at a fixed 'constant currency' exchange rate, which is done to measure
the organic performance of the Group. Growth rates for reporting regions and
service segments are in constant currency as it better represents the
underlying performance of the business. Constant currency growth rates for
prior periods are calculated using closing exchange rates as at the end of
prior period.
Customer Defined as a unique active subscriber with a unique mobile telephone number
who has used any of Airtel's services in the last 30 days.
Customer base The total number of active subscribers that have used any of our services
(voice calls, SMS, data usage or mobile money transaction) in the last 30
days.
Data ARPU Data average revenue per user per month. Data ARPU is derived by dividing
total data revenue during the relevant period by the average number of data
customers and dividing the result by the number of months in the relevant
period.
Data customer base The total number of subscribers who have consumed at least 1 MB on the Group's
GPRS, 3G or 4G network in the last 30 days.
Data customer penetration The proportion of customers using data services. Calculated by dividing the
data customer base by the total customer base.
Data usage per customer per month Calculated by dividing the total MBs consumed on the Group's network during
the relevant period by the average data customer base over the same period and
dividing the result by the number of months in the relevant period.
Digitalisation We use the term digitalisation in its broadest sense to encompass both
digitisation actions and processes that convert analogue information into a
digital form and thereby bring customers into the digital environment, and the
broader digitalisation processes of controlling, connecting and planning
processes digitally; the processes that effect digital transformation of our
business, and of industry, economics and society as a whole through bringing
about new business models, socio-economic structures and organisational
patterns.
Diluted earnings per share Diluted EPS is calculated by adjusting the profit for the year attributable to
the shareholders and the weighted average number of shares considered for
deriving basic EPS, for the effects of all the shares that could have been
issued upon conversion of all dilutive potential shares. The dilutive
potential shares are adjusted for the proceeds receivable had the shares
actually been issued at fair value. Further, the dilutive potential shares are
deemed converted as at beginning of the period, unless issued at a later date
during the period.
Earnings per share (EPS) EPS is calculated by dividing the profit for the period attributable to the
owners of the company by the weighted average number of ordinary shares
outstanding during the period.
Foreign exchange rate movements for non-DTA operating 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
underlying 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 underlying EBITDA (LTM) An alternative performance measure (non-GAAP) Calculated by dividing net debt
as at the end of the relevant period by underlying 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 underlying EBITDA.
Operating leverage An alternative performance measure (non-GAAP). Operating leverage is a measure
of the operating efficiency of the business. It is calculated by dividing
operating expenditure (excluding regulatory charges) by total revenue.
Operating profit Operating profit is a GAAP measure of profitability. Calculated as revenue
less operating expenditure (including depreciation and amortisation and
operating exceptional items).
Other revenue Other revenue includes revenues from messaging, value added services (VAS),
enterprise, site sharing and handset sale revenue.
Reported currency Our reported currency is US dollars. Accordingly, actual periodic exchange
rates are used to translate the local currency financial statements of OpCos
into US dollars. Under reported currency the assets and liabilities are
translated into US dollars at the exchange rates prevailing at the reporting
date whereas the statements of profit and loss are translated into US dollars
at monthly average exchange rates.
Smartphone A smartphone is defined as a mobile phone with an interactive touch screen
that allows the user to access the internet and additional data applications,
providing additional functionality to that of a basic feature phone which is
used only for making voice calls and sending and receiving text messages.
Smartphone penetration Calculated by dividing the number of smartphone devices in use by the total
number of customers.
Total MBs on network Total MBs consumed (uploaded & downloaded) by customers on the Group's
GPRS, 3G and 4G network during the relevant period.
Underlying EBIT Defined as operating profit/(loss) for the period adjusted for exceptional
items.
Underlying EBITDA An alternative performance measure (non-GAAP). Defined as operating profit
before depreciation, amortisation and exceptional items.
Underlying EBITDA margin An alternative performance measure (non-GAAP). Calculated by dividing
underlying EBITDA for the relevant period by revenue for the relevant period.
Underlying Revenue An alternative performance measure (non-GAAP). Defined as revenue before
exceptional items.
Unstructured Supplementary Service Data Unstructured Supplementary Service Data (USSD), also known as "quick codes" or
"feature codes", is a communications protocol for GSM mobile operators,
similar to SMS messaging. It has a variety of uses such as WAP browsing,
prepaid callback services, mobile-money services, location-based content
services, menu-based information services, and for configuring phones on the
network.
Voice minutes of usage per customer per month Calculated by dividing the total number of voice minutes of usage on the
Group's network during the relevant period by the average number of customers
and dividing the result by the number of months in the relevant period.
Weighted average number of shares The weighted average number of shares is calculated by multiplying the number
of outstanding shares by the portion of the reporting period those shares
covered, doing this for each portion and then summing the total.
Abbreviations
2G Second-generation mobile technology
3G Third-generation mobile technology
4G Fourth-generation mobile technology
ARPU Average revenue per user
bn Billion
bps Basis points
CAGR Compound annual growth rate
Capex Capital expenditure
CSR Corporate social responsibility
DTA Deferred Tax Asset
EBIT Earnings before interest and tax
EBITDA Earnings before interest, tax, depreciation and amortisation
EPS Earnings per share
FPPP Financial position and prospects procedures
GAAP Generally accepted accounting principles
GB Gigabyte
HoldCo Holding company
IAS International accounting standards
ICT Information and communication technologies
ICT (Hub) Information communication technology (Hub) IFRS
IFRS International financial reporting standards
IMF International monetary fund
IPO Initial public offering
KPIs Key performance indicators
KYC Know your customer
LTE Long-term evolution (4G technology)
LTM Last 12 months
m Million
MB Megabyte
MI Minority interest (non-controlling interest)
NGO Non-governmental organisation
OpCo Operating company
P2P Person to person
PAYG Pay-as-you-go
QoS Quality of service
RAN Radio access network
SIM Subscriber identification module
Single RAN Single radio access network
SMS Short messaging service
TB Terabyte
Telecoms Telecommunications
UoM Unit of measure
USSD Unstructured supplementary service data
Risk Factors
The Group's business and the industry in which it operates, together with all
other information contained in this document, including, in particular, the
risk factors summarised below. Additional risks and uncertainties relating to
the Group that are not currently known to the Group, or that the Group
currently deem immaterial, may individually or cumulatively also have a
material adverse effect on the Group's business, results of operations and
financial condition.
Principal risks summarised
1. We operate in a competitive environment with the potential for
aggressive competition by existing players, or the entry of new players, which
could both put a downward pressure on prices, adversely affecting our revenue
and profitability.
2. Failure to innovate through simplifying the customer experience,
developing adequate digital touchpoints in line with changing customer needs
and competitive landscape could lead to loss of customers and market share.
3. An inability to invest and upgrade our network and IT
infrastructure could affect our ability to compete effectively in the market.
4. Cybersecurity threats through internal or external sabotage or
system vulnerabilities could potentially result in customer data breaches
and/or service downtimes.
5. Adverse changes in our external business environment,
macro-economic conditions and/or supply chain processes could lead to a
significant increase in our operating cost structure and negatively impact
profitability.
6. Shortages of skilled telecommunications professionals in some
markets and the inability to identify and develop successors for key
leadership positions could both lead to disruptions in the execution of our
corporate strategy.
7. Our internal control environment is subject to the risk that
controls may become inadequate due to changes in internal or external
conditions, new accounting requirements, delays, or inaccuracies in reporting.
8. Our telecommunications networks are subject to the risks of
technical failures, aging infrastructure, human error, wilful acts of
destruction or natural disasters.
9. Our multinational footprint means we are exposed to the risks of
currency fluctuations including the availability of funds for repatriation to
the Group company triggered by adverse macroeconomic conditions in the markets
where we operate.
10. We operate in a diverse and dynamic legal, tax and regulatory
environment. A failure to comply with relevant laws and regulations could lead
to penalties, sanctions, and reputational damage.
11. Continued disruptions and uncertainties caused by the Covid-19 pandemic
may impact the Group's ability to operate its business effectively and to
achieve its objectives.
1 Alternative performance measures (APM) are described on page 51.
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