REG - Airtel Africa PLC - Half Year Results
25/10/2024 07:15
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RNS Number : 6573J Airtel Africa PLC 25 October 2024
Airtel Africa plc
Results for half year ended 30 September 2024
25 October 2024
Sustained operating momentum reflecting continued execution against
significant growth opportunity
Operating highlights
· Total customer base grew by 6.1% to 156.6 million. Data customer
penetration continues to rise, driving a 10.4% increase in data customers to
66.0 million. Data usage per customer increased by 30.9% to 6.6 GBs, with
smartphone penetration increasing 5.3% to reach 42.9%.
· Mobile money subscribers of 41.5 million, increased by 13.4%
reflecting our continued investment into distribution to support increased
financial inclusion across our markets. Transaction value increased by 30.1%
in constant currency(2) with annualised transaction value of $128bn.
· Data ARPU growth of 13.5% and mobile money ARPU growth of 10.9% in
constant currency continued to support overall ARPU's which rose 11.1% YoY in
constant currency.
· Customer experience remains core to our strategy with sustained
network investment during the period. Data capacity across our network has
increased by 20% with the rollout of over 2,800 sites and around 3,500 kms of
fibre.
Financial performance
· Revenue in constant currency grew by 19.9% in H1'25 with growth
accelerating to 20.8% in Q2'25 driven by an acceleration of growth in Nigeria
to 38.2% and in Francophone Africa to 9.0%. Across the Group mobile services
revenue grew by 18.4% and Mobile Money revenue grew by 28.8% in constant
currency. Reported currency revenues declined by 9.7% to $2,370m reflecting
the impact of currency devaluation, particularly in Nigeria.
· A substantial increase in fuel prices across our markets and the
lower contribution of Nigeria to the Group after the naira devaluation
contributed to a decline in EBITDA margins to 45.8% from 49.6% in H1'24. In
Q2'25, EBITDA margin at 46.4% improved sequentially from 45.3% in Q1'25
reflecting the initial successes in our cost efficiency programme launched
earlier in the year. Constant currency EBITDA increased 13.5% whilst reported
currency EBITDA declined by 16.5% to $1,087m for H1'25.
· Profit after tax of $79m was impacted by $151m of exceptional
derivative and foreign exchange losses (net of tax), arising from the further
depreciation in the Nigerian naira during the period.
· EPS before exceptional items declined from 7.0 cents in the prior
period to 4.9 cents, primarily reflecting the translation impact of currency
devaluation. Basic EPS of 0.8 cents compares to negative (1.5 cents) in the
prior period, predominantly reflecting the $471m exceptional derivative and
foreign exchange losses in the prior period, compared to $231m in the current
period.
Capital allocation
· Capex at $316m was 1.3% higher compared to prior period. Capex
guidance for the full year remains between $725m and $750m as we continue to
invest for future growth.
· Over the year we have significantly reduced our foreign currency debt
exposure, having paid down $809m of foreign currency debt. 89% of our OpCo
debt (excl. lease liabilities) is now in local currency, up from 71% a year
ago.
· To secure beneficial contract structures and further enhance our
partnership with ATC, we have extended our tower lease agreements for
approximately 7,100 sites in four markets for a further 12-year period. The
new agreements have a focus on renewable energy investment which will drive
operating cost efficiencies over the medium-term and will have a neutral to
positive impact on near-term free cash flow. The renewals has resulted in a
$1.2bn increase in lease liabilities, which has been the primary driver of the
increase in leverage to 2.3x from 1.6x in the previous quarter. No further
material change in leverage should be expected from further renewals in the
near-to-medium term.
· The Board has declared an interim dividend of 2.6 cents per share, an
increase of 9%, in-line with our progressive dividend policy. The $100m share
buyback continues, with 61m shares purchased for a consideration of $88m as at
the end of September 2024.
Sunil Taldar, Chief executive officer, on the trading update:
"The sustained operating momentum over the period is testament to our teams'
ability to execute our strategy brilliantly. During the period we refined our
strategy to significantly increase our focus on delivering best in class
experience to our customers. To meet our customer's expectations, we will
strengthen our 'go-to-market' through enhanced distribution, simplified
customer journeys and best in class network experience. This will further
unlock the significant opportunity Africa offers and will provide the
foundation of strong growth across our markets and our business segments,
especially as we build and scale up the B2B and home broadband segments.
The scale of the opportunity across our markets remains substantial. A young
and fast-growing population, combined with low levels of SIM and banking
penetration on one hand, and increasing smartphone and digital payment
adoption across our existing base on the other, provides a unique opportunity
to leverage our extensive infrastructure for sustained growth in Sub-Saharan
Africa.
We have already seen strong progress, with an acceleration in constant
currency revenue growth over the last quarter as demand for our services
remains strong, reflected in the 48% growth in data volumes over the first
half of the year, despite the challenging backdrop in some of our markets.
Furthermore, we have seen our cost optimisation programme already show initial
green shoots, which combined with operational leverage, has contributed to an
expansion of our EBITDA margins in Q2'25 compared to the previous quarter.
Foreign currency debt has fallen to just 11% of market debt at the end of
September which reflects the work we have undertaken to de-risk the balance
sheet.
We remain absolutely focussed on executing against our strategy to efficiently
and effectively deliver essential services to improve the lives, communities
and economies we serve. The growth opportunity across our markets remains
compelling and we continue to focus on margin improvement."
GAAP measures
(Half year ended)
Description Sep-24 Sep-23 Reported
currency
$m $m change
Revenue 2,370 2,623 (9.7%)
Operating profit 706 885 (20.3%)
Profit/(Loss) after tax 79 (13) 726.3%
Basic EPS ($ cents) 0.8 (1.5) 156.4%
Net cash generated from operating activities 979 1,121 (12.7%)
Alternative performance measures (APM) (1)
(Half year ended)
Description Sep-24 Sep-23 Reported Constant
currency
currency
$m $m change change
Revenue 2,370 2,623 (9.7%) 19.9%
EBITDA 1,087 1,302 (16.5%) 13.5%
EBITDA margin 45.8% 49.6% (378) bps (258) bps
EPS before exceptional items ($ cents) 4.9 7.0 (30.3%)
Operating free cash flow 771 990 (22.2%)
(1) Alternative performance measures (APM) are described on page
46
(2) An explanation of constant currency adjustments is described
on page 48
About Airtel Africa
Airtel Africa is a leading provider of telecommunications and mobile money
services, with a presence in 14 countries in Africa, primarily in East Africa
and Central and West Africa.
Airtel Africa offers an integrated suite of telecoms solutions to its
subscribers, including mobile voice and data services as well as mobile money
services, both nationally and internationally. We aim to continue providing a
simple and intuitive customer experience through streamlined customer
journeys.
Enquiries
Airtel Africa - Investor Relations
Alastair Jones +44 7464 830 011
Investor.relations@africa.airtel.com +44 207 493 9315
(mailto:Investor.relations@africa.airtel.com)
Hudson Sandler
Nick Lyon
Emily Dillon
airtelafrica@hudsonsandler.com (mailto:airtelafrica@hudsonsandler.com) +44 207 796 4133
Conference call
Management will host an analyst and investor conference call at 13:00pm UK
time (BST), on Friday 25th October 2024, including a Question-and-Answer
session.
To receive an invitation with the dial in numbers to participate in the event,
please register beforehand using the following link:
Conference call registration link
(https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=8372360&linkSecurityString=22a3ca6050)
Key consolidated financial information
Description Unit of measure Half year ended Quarter ended
Sep-24 Sep-23 Reported currency Constant currency Sep-24 Sep-23 Reported currency Constant currency
change %
change %
change %
change %
Profit and loss summary
Revenue (1) $m 2,370 2,623 (9.7%) 19.9% 1,214 1,246 (2.6%) 20.8%
Voice revenue $m 960 1,169 (17.9%) 9.4% 484 548 (11.6%) 9.3%
Data revenue $m 844 915 (7.7%) 28.4% 435 429 1.4% 30.2%
Mobile money revenue (2) $m 466 416 11.9% 28.8% 244 215 13.5% 29.1%
Other revenue $m 205 216 (5.2%) 25.4% 105 102 3.0% 27.8%
Expenses $m (1,295) (1,337) (3.1%) 25.5% (654) (635) 3.0% 24.8%
EBITDA (3) $m 1,087 1,302 (16.5%) 13.5% 564 620 (9.1%) 15.6%
EBITDA margin % 45.8% 49.6% (378) bps (258) bps 46.4% 49.8% (334) bps (208) bps
Depreciation and amortisation $m (381) (417) (8.7%) 21.3% (193) (197) (2.1%) 22.2%
Operating profit $m 706 885 (20.3%) 9.7% 371 423 (12.3%) 12.5%
Other finance cost - net of finance income (4) $m (297) (402) (26.1%) (158) (190) (17.3%)
Finance cost - exceptional items (5) $m (231) (471) (50.9%) (109) - 0.0%
Total finance cost $m (528) (873) (39.5%) (267) (190) 40.2%
Profit before tax $m 178 12 1370.1% 104 233 (55.3%)
Tax $m (179) (179) 0.1% (94) (95) (1.1%)
Tax - exceptional items (5) $m 80 154 (48.0%) 38 - 0.0%
Total tax charge $m (99) (25) (298.4%) (56) (95) (41.0%)
Profit/(Loss) after tax $m 79 (13) 726.3% 48 138 (65.0%)
Non-controlling interest $m (48) (42) 16.6% (24) (23) 6.5%
Profit attributable to owners of the company - before exceptional items $m 182 262 (30.8%) 95 115 (17.2%)
Profit/(Loss) attributable to owners of the company $m 31 (55) 156.1% 24 115 (78.9%)
EPS - before exceptional items cents 4.9 7.0 (30.3%) 2.6 3.1 (16.4%)
Basic EPS cents 0.8 (1.5) 156.4% 0.6 3.1 (79.1%)
Weighted average number of shares million 3,727 3,751 (0.6%) 3,717 3,751 (0.9%)
Capex $m 316 312 1.3% 169 172 (1.6%)
Operating free cash flow $m 771 990 (22.2%) 395 448 (12.0%)
Net cash generated from operating activities $m 979 1,121 (12.7%) 565 541 4.6%
Net debt $m 5,155 3,327 5,155 3,327
Leverage (net debt to EBITDA) times 2.3x 1.3x 2.3x 1.3x
Return on capital employed % 19.8% 24.7% (489) bps 21.8% 23.7% (189) bps
Operating KPIs
ARPU $ 2.6 3.0 (16.3%) 11.1% 2.6 2.9 (8.9%) 13.0%
Total customer base million 156.6 147.7 6.1% 156.6 147.7 6.1%
Data customer base million 66.0 59.8 10.4% 66.0 59.8 10.4%
Mobile money customer base million 41.5 36.5 13.4% 41.5 36.5 13.4%
( (1)) Revenue includes inter-segment eliminations of $105m for the half year
ended 30 September 2024 and $93m for the prior period.
((2)) Mobile money revenue post inter-segment eliminations with mobile
services were $361m for the half year ended 30 September 2024, and $323m for
the prior period.
((3)) EBITDA includes other income of $12m for the half year ended 30
September 2024 and $16m for the prior period.
((4)) Other finance cost - net of finance income of $297m for the half year
ended 30 September 2024 and $402m in the prior period includes derivative and
foreign exchange losses of $29m and $183m in the respective periods which have
not been treated as exceptional items. Excluding these losses, other finance
cost - net of finance income was $268m for the half year ended 30 September
2024 and $219m for the prior period.
((5)) Finance cost - exceptional items of $231m for the half year ended 30
September 2024 and $471m for the prior period relates to derivative and
foreign exchange losses following the devaluation of the Nigerian naira, which
resulted in an exceptional tax gain of $80m and $154m, respectively. As a
result, there was a $151m negative impact on profit after tax in half year
ended 30 September 2024 and $317m in the prior period.
( )
( )
( )
( )
Financial review for the half year ended 30 September 2024
Revenue
Group revenue in reported currency declined by 9.7% to $2,370m, with constant currency growth of 19.9%. Group mobile services revenue grew by 18.4% in constant currency, with voice revenue growth of 9.4% and data revenues increasing by 28.4% over the period. In Q2'25, constant currency revenue growth accelerated to 20.8% from 19.0% in Q1'25 primarily driven by 38.2% growth in Nigeria and Francophone Africa revenue growth of 9.0% in Q2'25 respectively. In H1'25, mobile money revenue grew by 28.8% in constant currency, primarily driven by continued strong growth in East Africa.
Reported currency revenue growth was particularly impacted by significant currency devaluations in Nigeria, Malawi, Zambia and Tanzania. In particular, the naira devalued from a weighted average NGN/USD rate of 610 in the prior half-year period to NGN/USD 1,484 in the current period.
EBITDA
Reported currency EBITDA declined by 16.5% to $1,087m reflecting the impact of currency devaluation over the period, particularly in Nigeria. In constant currency, EBITDA increased by 13.5% with EBITDA margins of 45.8%, a decline of 378bps. The lower contribution of Nigeria following the significant naira depreciation and a significant increase in fuel prices (mainly in Nigeria by around 90%), were the primary drivers of the margin decline over the last year. Mobile services EBITDA increased 9.9% in constant currency with EBITDA margin at 45.1%, whilst mobile money EBITDA margins of 53.0%, increased 167bps in constant currency, supporting growth of 33.0%.
Following the launch of a comprehensive cost efficiency programme, EBITDA margins in Q2'25 increased to 46.4% from 45.3% in the previous quarter (Q1'25).
Finance costs
Total finance costs for the half year ended 30 September 2024 was $528m,
primarily impacted by $260m of derivative and foreign exchange losses
(reflecting the revaluation of US dollar balance sheet liabilities and
derivatives following currency devaluation), of which $231m was classified as
exceptional following the naira devaluation 1 (#_ftn1) . Finance costs
excluding exceptional items and derivative and foreign exchange losses
increased from $219m to $268m in the current period primarily on account of
higher market debt and shift of foreign currency debt to local currency debt
in the operating entities carrying a higher average interest rate.
Profit/(Loss) before tax
Profit before tax at $178m during the half year ended 30 September 2024 was
largely impacted by the $260m derivative and foreign exchange losses as
discussed above and lower EBITDA due to significant currency devaluation
across key markets.
Taxation
Total tax charges were $99m as compared to a $25m in the prior period. Total
tax charges in the current period reflected an exceptional gain of $80m and
$154m in the prior period following the Nigerian naira devaluation. Tax
charges excluding exceptional items were $179m in the current as well as in
the prior period.
Tax charge of $99m during the half year ended 30 September 2024, on a profit
before tax of $178m was largely due to profit mix between various OpCo's and
withholding taxes.
Profit/(Loss) after tax
Profit after tax of $79m during the half year ended 30 September 2024 was
primarily impacted by the $151m of exceptional derivative and foreign exchange
losses (net of tax) and lower EBITDA due to significant currency devaluation
across key markets.
Basic EPS
Basic EPS at 0.8 cents during the half year ended 30 September 2024 was
impacted by the exceptional derivative and foreign exchange losses as
explained above. EPS before exceptional items and derivative and foreign
exchange losses for the half year ended 30 September 2024 was 5.4 cents as
compared to 10.5 cents in the prior period, reflecting the impact of
significant currency devaluation across key markets on EBITDA.
Leverage
We have continued to improve our debt structure over the last year, having
repaid the outstanding $550m of HoldCo debt in May 2024, and increased the
proportion of local currency OpCo debt (excluding lease liabilities) on our
balance sheet from 71% a year ago to 89% as of 30 September 2024. In total, we
have paid down $809m of US dollar debt over the last year.
As explained in 'Other significant updates' on page 7, we have extended our
tower lease agreements with ATC for approximately 7,100 sites in Nigeria,
Uganda, Kenya and Niger for a further 12-year period. Under IFRS16 accounting
standards, the extension of these tower lease agreements by 12 years has
resulted in an approximate $1.2bn increase in lease liabilities, resulting in
approximately 0.6x increase in the Group's leverage ratio. Leverage was
further impacted by the decrease in reported currency EBITDA following the
naira devaluation, resulting in Group leverage of 2.3x as of 30 September
2024. No further material change in leverage should be expected from further
renewals.
GAAP measures
Revenue
Reported revenue of $2,370m, declined by 9.7% in reported currency, and grew
by 19.9% in constant currency driven by both customer base growth of 6.1% and
ARPU growth of 11.1%. The gap between constant currency and reported currency
revenue growth was due to the average currency devaluations between the
periods, mainly in the Nigerian naira, the Malawian kwacha, the Zambian
kwacha, and the Tanzanian shilling partially offset by an appreciation in the
Kenya shilling.
Reported mobile services revenue at $2,013m, declined 12.6%, and grew by 18.4%
in constant currency. Mobile money revenue grew by 11.9% in reported currency.
In constant currency, mobile money revenue grew by 28.8%, driven by revenue
growth in East Africa of 31.4% and Francophone Africa of 20.2%.
Operating profit
Operating profit in reported currency declined by 20.3% to $706m as currency
headwinds offset the 9.7% growth of operating profit in constant currency.
Total finance costs
Total finance costs of $528m for the half year ended 30 September 2024, was
lower by $345m over the prior period. Current and prior period finance costs
were primarily impacted by $231m and $471m of exceptional derivative and
foreign exchange losses respectively, following the significant devaluation in
Nigerian Naira. Excluding exceptional items, finance cost was lower by $105m
primarily on account of lower derivative and foreign exchange losses,
partially offset by higher interest on market debt due to increase in market
debt and shift of foreign currency debt to local currency debt in the
operating entities carrying a higher average interest rate.
The Group's effective interest rate increased to 13.2% compared to 8.8% in the
prior period, largely driven by higher local currency debt at the OpCo level,
in line with our strategy of localising debt at OpCo, and the repayment of
$550m of HoldCo debt which carried a lower-than-average interest rate.
Taxation
Total tax charges of $99m compares to $25m in the prior period. Total tax
charges in the current period reflected an exceptional gain of $80m and $154m
in the prior period on account of the Nigerian naira devaluation. Tax charges
excluding exceptional items were $179m in current as well as in the prior
period.
Basic EPS
Basic EPS at 0.8 cents during the half year ended 30 September 2024 was
impacted by the derivative and foreign exchange losses as explained above.
Net cash generated from operating activities
Net cash generated from operating activities was $979m, lower by 12.7% as
compared to $1,121m in the prior period.
Alternative performance measures 2
EBITDA
EBITDA of $1,087m, declined by 16.5% in reported currency, and increased by 13.5% in constant currency. Growth in constant currency EBITDA was led by revenue growth and supported by continued improvement in operating efficiencies offset by the impact that inflationary cost pressures in a number of markets. The EBITDA margin declined by 378 basis points in reported currency to 45.8% reflecting the impact of lower contribution of Nigeria post significant naira devaluation and inflationary cost pressures.
The gap between constant currency and reported currency EBITDA growth was due to the currency devaluations between the periods, mainly in the Nigerian naira, the Malawian kwacha, the Zambian kwacha, and the Tanzanian shilling partially offset by an appreciation in the Kenyan shilling.
Tax
The effective tax rate was 40.3%, compared to 39.0% in the prior period. The
effective tax rate is higher than the weighted average statutory corporate tax
rate of approximately 32%, largely due to increase in income tax rate in one
of the subsidiaries, the profit mix between various OpCos and withholding
taxes on dividends by subsidiaries.
Exceptional items
The exceptional item of $231m in the current period and $471m in the prior
period relates to derivative and foreign exchange losses following the
devaluation of the Nigerian naira. These losses resulted in an exceptional tax
gain of $80m and $154m respectively.
EPS before exceptional items
EPS before exceptional items of 4.9 cents as compared to 7.0 cents in the
prior period was primarily impacted by the significant currency headwinds
impacting reported currency results. EPS before exceptional items and
derivative and foreign exchange losses was 5.4 cents compared to 10.5 cents in
the prior period.
Operating free cash flow
Operating free cash flow was $771m, lower by 22.2%, as a result of lower
EBITDA due to currency devaluation over the period particularly in Nigeria.
Other significant updates
Renewal of tower lease agreements with ATC
On 30 September 2024, the Company renewed tower lease agreements with American
Tower Corporation (ATC) for approximately 7,100 sites across Nigeria, Uganda,
Kenya and Niger which were set to expire over the next 12 to 24 months, for a
period of 12 years. The tower lease agreements with ATC were initially entered
as a sale and leaseback transaction over the period of 2015-16, for ten years.
The renewals ensure we continue to benefit from contract structures, including
the proportion that is linked to foreign currency.
Integral to the contractual terms is the focus on renewable energy solutions
across a significant number of sites, particularly in Nigeria. This is
expected to benefit the Company's operating costs in the medium term as the
reliance on diesel is reduced, while also advancing Airtel Africa's ambition
to drive reduced GHG emissions across the footprint, which remains a key
priority for its sustainability agenda.
Under IFRS16 accounting standards, the extension of these tower lease
agreements to 12 years will result in an approximate $1.2bn increase in lease
liabilities, resulting in an approximate 0.6x increase in the Company's
leverage ratio as of 30 September 2024. No further material change in
leverage from further renewals is expected in the near-to-medium term.
In addition, there will be increased finance costs in the early years of the
contract term and a marginal increase in depreciation due to the recognition
of the right-of-use asset on renewal. The impact from these contract renewals
on profit after tax in the first year is expected to be approximately $120m -
$130m, with 50% of this impact expected in FY'25. This impact is expected to
reduce over the term of the contract, in line with the IFRS16 lease accounting
methodology and as operating efficiencies materialise.
Importantly, there will be a neutral to positive impact on free cash flow for
the Company due to these renewals in the near-term.
The renewals reinforce our commitment to enhance network capacity and
reliability, enabling our ambition to offer a best-in-class network experience
to our customers.
Kenya license extension
On 6(th) September 2024, Airtel Kenya has received confirmation from the
regulator on extension of existing Network Facility Provider, Application
Service Provider, Content Service Provider and Internationally Gateway Station
and Service licence as well as its spectrum in 900 MHz, 1800 MHz and 2100 MHz
that were due for renewal in January 2025 for a period of 24 months effective
January 2025.
Repayment of remaining $550m bond achieving a zero-debt position at HoldCo
On 20 May 2024, the Company announced that it has repaid in full the 5.35%
Guaranteed Senior Notes maturing in May 2024. This bond repayment of $550m was
made exclusively out of the cash reserves at the HoldCo and is a continuation
of its strategy to reduce external foreign currency debt.
At the time of the IPO in June 2019, the Group had $2,719m of external debt at
HoldCo which resulted in significant exposure to currency fluctuations and the
reliance on upstreaming funds to cover both interest costs and the principal
repayment. Through a consistent execution of its strategy supporting strong
free cash flow generation, and continued upstreaming success, the Group has
been reducing Holdco debt over the past few years and has now reached the
significant milestone of a zero-debt position at HoldCo.
The current leverage and capital structure is a reflection of the Group's
successful capital allocation strategy that has been in place since our IPO,
and it will aim to continue reducing foreign currency debt obligations across
its OpCo's.
Update on share buy-back programme
On 1 February 2024, the Company announced that in light of the increase in
HoldCo cash, current leverage and the consistent strong operating cash
generation, the Board intended to launch a share buy-back programme of up to
$100m, over a 12-month period.
On 1 March 2024, Airtel Africa plc announced the commencement of its share
buyback programme. As at the end of September 2024, the Company has purchased
61 million shares for a total consideration of $88m.
Directorate changes
On 9 May 2024, Airtel Africa plc announced the appointment of Paul Arkwright,
CMG, as an independent non-executive director of the Company, with immediate
effect.
On 3 July 2024, following the conclusion of the AGM, John Danilovich retired
as an independent non-executive director of Airtel Africa plc.
Retirement of Airtel Africa plc CEO and appointment of Successor
On 2 January 2024, Airtel Africa plc announced the retirement of Chief
Executive Officer Olusegun "Segun" Ogunsanya and the appointment of Sunil
Taldar, who joined Airtel Africa in October 2023 as Director - Transformation,
as Chief Executive Officer (CEO). Following a transition period, Sunil Taldar
has been appointed to the Board as an Executive Director and has assumed the
role of CEO on 1 July 2024, at which time Segun retired from the Board and the
Company. Following his retirement from Airtel Africa, Segun will be available
to advise the Chairman, the Airtel Africa Board and Chief Executive Officer
for a 12-month period and appointed as Airtel Africa Charitable Foundation's
inaugural Chair.
Nigerian Communications Commission directive on subscriber registration
compliance
In December 2023, the Nigerian Communications Commission (NCC) informed Airtel
Nigeria, in an industry-wide directive, to undertake full network barring of
all SIMs that have failed to submit their National Identity Numbers (NIN) on
or before 28 February 2024. Likewise, customers that have submitted their
NINs, but remain unverified are to be barred by 31 July 2024 (earlier deadline
was 15 April 2024). Furthermore, guidelines were issued whereby no customer
can have more than 4 active SIMs and all such excess SIMs must be barred by 29
March 2024. This directive is part of the ongoing Federal Government NIN-SIM
harmonisation exercise requiring all subscribers to provide valid NIN
information to update SIM registration records.
Airtel Nigeria has complied with the directives issued and barred all
customers without NINs as well as customers with more than 4 active SIMs which
had a negligible impact on revenue.
Chad License Renewal
In July 2024, Airtel Tchad S.A ("Airtel Tchad"), a subsidiary of the Group was
issued with a National Telecom Operator licence for 2G/3G and 4G network. This
licence renewal is with effect from April 2024 and is for a period of 10 years
for a gross consideration of CFA54bn (approximately $90m).
Dividend payment timetable
The board has declared an interim dividend of 2.6 cents for the half year
ended 30 September 2024, payable on 13 December 2024 to shareholders recorded
in the register at the close of business on 8 November 2024.
London Stock
Exchange
Nigerian Stock Exchange
Last day to trade shares cum dividend 6
November 2024 5 November
2024
Shares commence trading ex-dividend 7
November 2024 6 November
2024
Record
date
8 November 2024 8
November 2024
Last date for currency
election
25 November 2024 25 November
2024
Payment
date
13 December 2024 13
December 2024
Information on additional KPIs
An investor relations pack with information on the additional KPIs and balance
sheet is available to download on our website at airtel.africa/investors
(http://www.airtel.africa/investors)
Strategic overview
The Group provides telecom and mobile money services in 14 emerging markets of
Sub-Saharan Africa. Our markets are characterised by young and rapidly growing
population, low smartphone penetration, and relatively large unbanked
populations. Unique mobile user penetration across the Group's footprint is
around 48%, and banking penetration remains under 50%. These indicators
illustrate the significant opportunity still available to Airtel Africa to
enhance both digital and financial inclusion in the communities we serve,
enriching and transforming their lives through digitalisation, whilst at the
same time growing our revenues profitably across each of our key services of
voice, data and mobile money.
The Group continues to invest in its network and distribution infrastructure
to enhance both mobile connectivity and financial inclusion across our
countries of operation. In particular, we have continued to invest in
expanding our 4G and 5G network to increase data capacity, deploy new sites -
especially in rural areas - thereby enhancing coverage and connectivity.
Our refreshed strategy puts the customer at the core of our strategy. We
believe that by ensuring great customer experience across our network and
touchpoints we will deliver on our corporate purpose of transforming lives
across Africa. Our consumer centric strategy is anchored on our 6 new
strategic pillars - strengthening our 'go-to-market', delivering best in class
network experience, winning more in key markets, digitising and simplifying
processes across the business, accelerating Airtel Money and scaling our home
broadband business (HBB) and enterprise offerings.
Underpinning the Group's business strategy is our focus on cost optimisation,
our ongoing sustainability strategy and the investment into our people to
build and retain talent. Our sustainability strategy supports our
well-established corporate purpose of transforming lives, our continued
commitment to driving sustainable development and acting as a responsible
business. Our sustainability strategy sets out our goals and commitments to
foster financial inclusion, bridge the digital divide and serve more customers
in some of the least penetrated telecommunication markets in the world.
Strengthen 'Go-to-market'
We continue to strengthen our distribution footprint, especially our exclusive
channel of kiosks/mini-shops and Airtel Money Branches (AMB) along with
multi-brand outlets in both urban and rural markets. During the period, the
Group expanded its exclusive franchise stores, adding over 7,400 kiosks and
mini shops (taking the total to 88,300 kiosks and mini shops) and adding over
1,200 Airtel Money Branches (AMB). The Group also added over 36,000 activating
outlets, an increase of 11%, enabling continued expansion of our customer base
and strong growth in overall revenues.
We also continue to accelerate our data revenue growth through a combination
of higher mix of smartphones in our base and improving ARPUs. Our smartphone
penetration stands at 42.9%, an increase of 5.3% points from H1'24 driven by
our expansion of the 4G network and stronger execution. Our data consumption
has increased to 7.1 GB per data user, growing by over 36% in Q2'25 driven by
improved network experience and customer life-cycle management programs. A
notable development is our intervention in Rwanda where we have been able to
break barriers of affordability on both smartphone devices and data tariffs,
thereby enabling accelerated adoption of data services during the period.
Best in class network experience
The Group remains focused on delivering best-in-class services, enhancing our
4G network availability, along with expanding newly launched 5G technology in
key markets like Kenya, Nigeria, Tanzania, Uganda and Zambia. Reaching
underserved communities is a key priority and we continue to expand rural
coverage through new site rollouts and continue investing in spectrum and
technologies to support increased capacity to facilitate our corporate purpose
of transforming lives.
We have rolled out over 2,800 sites during the year and close to 4,200 4G
sites. 96.6% or our sites are now 4G enabled compared to 92.3% in prior period
and we have over 1,200 5G operational sites in five markets.
As part of ensuring our services are future ready, in addition to purchasing
spectrum, we grew our fibre infrastructure and 5G capabilities and remain
committed to our investment into data centres to further support digital
inclusion across our markets. We continued to strengthen our fibre business,
which is now delivering encouraging revenue growth. During the year we added a
further around 3,500 km of fibre, with a total of 77,100+ km now deployed.
Overall, the capacity investment has resulted in a 20.1% increase in data
capacity - reaching almost 34,000 terabytes (TB) per day, with peak hour data
utilisation steadily increasing as we optimise asset performance.
Must win markets
Winning customers across all the markets through micro marketing using network
and digital tools is fundamental to our strategy and will enable us to drive
both financial and digital inclusion. We win in every micro segment by
optimizing our network to improve customer experience or strengthen our
distribution where our network is strong so that we can acquire new customers
with speed and precision. There are clusters of opportunities which have been
identified across all opcos which have been called out as "must win
markets". To ensure that we win across all must win markets there is stepped
up investment on building people capabilities and driving a culture of
collaborative working across functions.
In the broader urban areas, including smaller towns and emerging suburban
peripheries, some of micromarketing actions include improving indoor coverage,
quality of network and delivering seamless experience by stitching our network
experience through principles of community of interest. This will allow us to
strengthen our position as a reliable network provider, attracting new
customers and retaining our existing base.
Rural markets present a big growth opportunity given low penetration of both
telecom and financial services. To tap the opportunity, our focus is on
improving coverage and distribution expansion across all formats. With
intensified network investment and focus on distribution excellence, we are
confident that rural markets will contribute to a significant portion of our
overall customer additions going forward.
Digitise and simplify
In line with our strategic pillar of "Digitize and Simplify," we have made
significant strides in streamlining our digital offerings and improving
customer experiences through innovative technologies. Our focus remains on
enhancing digital adoption and driving operational efficiencies to simplify
user journeys and unlock growth across all digital touchpoints.
The My Airtel App differentiates through a single-app strategy for both
telecommunications and wallet use cases and as a result has achieved
significant digital adoption and transaction growth. Over the last year we
have seen a 92% growth in monthly active users of the My Airtel App, with
transaction value on the app increasing by over 70%. This illustrates the
growth in customer self-service in performing core communication and wallet
related use cases such as airtime recharges, bundle purchase, peer-to-peer and
bill payments.
We believe continued investments in digital infrastructure will enable us to
accelerate productivity, while also improving experience for all stakeholders
positioning Airtel for greater scalability and faster growth.
Accelerate Airtel Money
The low penetration of traditional banking services across our footprint
leaves a large number of unbanked customers whose needs can be fulfilled
largely through mobile money services. Our goal is to accelerate the adoption
of Airtel Money across all regions, leveraging the success of our mobile money
business model to expand financial access and inclusion, particularly in some
of the world's most underserved communities.
During the period, our efforts were focused on expanding our ecosystem and
driving customer acquisition. We introduced new international money transfer
routes, rolled out new loan products, and continued to onboard more partners
into our ecosystem. Additionally, a key priority was to promote digital app
transactions, ensuring a seamless and more integrated experience for our
customers while enhancing the overall value of our mobile money services.
We continued to strengthen our exclusive distribution network of Airtel Money
Branches and Kiosks, ensuring service availability even in rural areas. The
number of kiosks and mini shops grew by 9.1%, while Airtel Money branches saw
an increase of over 6.7%. In addition, our non-exclusive mobile money agent
network expanded by 40%, driven by the successful implementation of our
digital onboarding process. These distribution efforts, combined with enhanced
product offerings, led to a 13.4% growth in our mobile money customer base,
which now serves 41.5 million customers, representing 26.5% of our total
customer base.
Mobile money has become an increasingly vital component of our business, with
an annual transaction value of $ 128 billion in reported currency. During the
period, mobile money revenue contributed 19.6% to the Group's overall
revenues.
Scale HBB and enterprise
Airtel's investment in 5G networks has helped power capacity to service
customer need for unlimited internet service across key cities in 5 markets.
The demand for these services is evident in the scale of usage, with customers
consuming, on average 250GB per month across Nigeria, Tanzania, Kenya, Uganda
and Zambia.
During the period we have increased our investment into dedicated outbound
sales teams which are focussed on-boarding high value customers on unlimited
play, utilising our expansive 4G network. Further investment in ensuring
customers have a seamless on-boarding to the home broadband service with the
My Airtel App has helped improve customer convenience, particularly in the
product use and recharges available across multiple integrated payment
channels.
Enterprise services remains a key opportunity and focus. In particular, Nxtra
by Airtel - our new data centre business - has broken ground in Nigeria and is
expected to deliver 38 megawatts of total capacity and host high density
racks, incorporating the latest best practice in construction design. This is
the first of five hyperscale data centres to be developed by Airtel Africa on
the continent. In addition, the launch of 'Telesonic' will leverage its fibre
infrastructure across the continent to meet the growing demand for wholesale
data in Africa by offering comprehensive fibre and submarine cable solutions.
Financial review for the half year ended 30 September 2024
Nigeria - Mobile services
Description Unit of Half year ended Quarter ended
measure
Sep-24 Sep-23 Reported Constant Sep-24 Sep-23 Reported Constant
currency currency currency currency
change
change
change
change
Summarised statement of
Operations
Revenue $m 489 878 (44.3%) 35.6% 234 350 (33.2%) 37.9%
Voice revenue $m 209 414 (49.6%) 23.0% 97 161 (39.7%) 24.5%
Data revenue $m 229 385 (40.5%) 44.4% 112 157 (28.6%) 47.3%
Other revenue (1) $m 51 79 (35.1%) 58.0% 25 32 (23.0%) 59.0%
EBITDA $m 238 474 (49.7%) 22.3% 115 190 (39.4%) 25.2%
EBITDA margin % 48.7% 54.0% (526) bps (531) bps 49.4% 54.4% (504) bps (500) bps
Depreciation and amortisation $m (92) (156) (41.1%) 40.7% (43) (66) (34.4%) 35.5%
Operating profit $m 155 298 (47.9%) 32.5% 72 116 (37.9%) 35.5%
Capex $m 75 109 (31.3%) (31.3%) 37 62 (40.3%) (40.3%)
Operating free cash flow $m 163 365 (55.2%) 73.7% 78 128 (38.9%) 104.1%
Operating KPIs
Total customer base million 48.7 48.6 0.2% 48.7 48.6 0.2%
Data customer base million 26.3 24.2 8.6% 26.3 24.2 8.6%
Mobile services ARPU $ 1.6 3.0 (45.8%) 31.8% 1.6 2.4 (34.0%) 36.2%
((1) )
Other revenue includes inter-segment revenue of $1m in the half year ended 30
September 2024 and in the prior period. Excluding inter-segment revenue, other
revenue was $50m in half year ended 30 September 2024 and $78m in the prior
period.
Revenue grew by 35.6% in constant currency, largely driven by continued
strength in the demand for data services across the country, with growth
accelerating to 37.9% in Q2'25 compared to 33.2% in Q1'25. In reported
currency, revenues declined by 44.3% to $489m on account of the significant
devaluation of the Nigerian naira. The constant currency revenue growth was
driven by ARPU growth of 31.8% while customer growth was relatively stable
following the disconnection of subscribers in compliance with the KYC
directives issued by the regulator.
Voice revenue grew by 23.0% in constant currency, driven by voice ARPU growth
of 19.6%.
Data revenue grew by 44.4% in constant currency, as a function of both data
customer and data ARPU growth of 8.6% and 30.5%, respectively. Data usage per
customer increased by 36.0% to 8.1 GB per month (from 5.9 GB in the prior
period), with smartphone penetration increasing 6.2% to reach 48.5%.
Smartphone data usage per customer reached 10.9 GB per month compared to 8.6
GB per month in the prior period.
EBITDA of $238m declined by 49.7% in reported currency but increased by 22.3%
in constant currency. The EBITDA margin declined by 526 basis points to 48.7%
reflecting continued inflationary pressures across the business, particularly
from the increase in diesel prices. Average diesel prices in Nigeria increased
by approximately 90% compared to the prior period. In Q2'25, EBITDA margin has
improved to 49.4% from 48.2% in Q1'25.
Operating free cash flow was $163m, up by 73.7% in constant currency, largely
due to the constant currency EBITDA growth and lower capex while in reported
currency, operating free cash flow declined by 55.2% due to lower reported
currency EBITDA following the significant naira devaluation over the year.
East Africa - Mobile services (1)
Description Unit of Half year ended Quarter ended
measure
Sep-24 Sep-23 Reported Constant Sep-24 Sep-23 Reported Constant
currency currency currency currency
change
change
change
change
Summarised statement of
operations
Revenue $m 883 822 7.5% 19.1% 461 424 8.6% 18.5%
Voice revenue (2) $m 439 441 (0.3%) 10.9% 229 229 (0.1%) 9.5%
Data revenue $m 355 309 14.7% 26.1% 185 158 16.9% 26.4%
Other revenue (3) $m 89 72 25.1% 38.9% 47 37 27.5% 39.6%
EBITDA $m 418 408 2.5% 14.2% 221 213 3.6% 13.9%
EBITDA margin % 47.3% 49.7% (233) bps (203) bps 47.9% 50.2% (232) bps (191) bps
Depreciation and amortisation $m (158) (145) 9.3% 16.9% (82) (71) 15.1% 21.5%
Operating profit $m 231 240 (3.9%) 10.8% 123 129 (4.6%) 8.4%
Capex $m 156 107 46.5% 46.5% 79 53 49.7% 49.7%
Operating free cash flow $m 262 301 (13.1%) 0.8% 142 160 (11.6%) 0.4%
Operating KPIs
Total customer base million 74.2 68.1 9.0% 74.2 68.1 9.0%
Data customer base million 28.8 25.7 12.1% 28.8 25.7 12.1%
Mobile services ARPU $ 2.0 2.1 (2.6%) 7.8% 2.1 2.1 (1.0%) 8.0%
((1) ) The East Africa business region includes Kenya, Malawi, Rwanda,
Tanzania, Uganda and Zambia.
((2) )
Voice revenue includes inter-segment revenue of $1m in the half year ended 30
September 2024 and in the prior period. Excluding inter-segment revenue, voice
revenue was $438m in half year ended 30 September 2024 and $440m in the prior
period.
((3) )
Other revenue includes inter-segment revenue of $6m in the half year ended 30
September 2024 and in the prior period. Excluding inter-segment revenue, other
revenue was $83m in half year ended 30 September 2024 and $66m in the prior
period.
East Africa revenue grew by 7.5% in reported currency to $883m, and by 19.1%
in constant currency. The constant currency growth was made up of voice
revenue growth of 10.9%, data revenue growth of 26.1% and other revenue growth
of 38.9%.
Voice revenues were supported by customer base growth of 9.0% while voice ARPU
was flat. Voice ARPU's were negatively impacted by reduction in interconnect
rate by regulator in Kenya, Tanzania, Uganda and Rwanda. The customer base
growth was largely driven by expansion of both increased network coverage and
the increasing scale of the distribution network.
Data customer base growth of 12.1% and data ARPU growth of 10.0% drove the
strong performance in data revenues. Our continued investment in the network
and expansion of 4G network infrastructure resulted in 98.8% of our East
Africa network sites on 4G, compared to 93.9% in the prior period.
Furthermore, 986 sites are 5G enabled in four markets. In the half year, total
data usage per customer increased to 5.9 GB per customer per month, up by
28.4%, with smartphone penetration increasing 4.9% to reach 40.2%. Smartphone
data usage per customer reached 7.4 GB per month compared to 6.1 GB per month
in the prior period.
EBITDA increased to $418m, up by 2.5% in reported currency and up by 14.2% in
constant currency. EBITDA margins of 47.3% declined by 233 basis points as a
result of rising fuel prices in several of our key markets. However, in Q2'25,
EBITDA margin improved as compared to Q1'25.
Operating free cash flow was $262m, up by 0.8% in constant currency, due
largely to EBITDA growth, partially offset by increased capex.
The differential in growth rates (between constant currency and reported
currency) is primarily contributed by the devaluation in the Zambian kwacha,
the Malawian kwacha, and the Tanzanian shilling, partially offset by the
Kenyan shilling appreciation.
Francophone Africa - Mobile services (1)
Description Unit of Half year ended Quarter ended
measure
Sep-24 Sep-23 Reported Constant Sep-24 Sep-23 Reported Constant
currency currency currency currency
change
change
change
change
Summarised statement of
operations
Revenue $m 636 605 5.2% 5.3% 329 306 7.4% 7.1%
Voice revenue (2) $m 313 317 (1.1%) (1.0%) 159 159 0.1% (0.3%)
Data revenue $m 260 221 17.9% 18.1% 138 114 21.2% 20.9%
Other revenue (3) $m 63 67 (6.7%) (6.7%) 32 33 (4.8%) (5.0%)
EBITDA $m 244 264 (7.8%) (7.7%) 130 133 (2.9%) (3.3%)
EBITDA margin % 38.3% 43.7% (538) bps (539) bps 39.4% 43.6% (418) bps (419) bps
Depreciation and amortisation $m (115) (103) 11.1% 11.2% (60) (53) 11.9% 11.4%
Operating profit $m 101 138 (26.8%) (26.8%) 55 68 (19.9%) (20.3%)
Capex $m 66 77 (13.8%) (13.8%) 43 46 (6.2%) (6.2%)
Operating free cash flow $m 178 187 (5.2%) (5.1%) 87 87 (0.9%) (1.7%)
Operating KPIs
Total customer base million 33.6 30.9 9.0% 33.6 30.9 9.0%
Data customer base million 10.9 9.9 10.6% 10.9 9.9 10.6%
Mobile services ARPU $ 3.2 3.4 (4.7%) (4.6%) 3.3 3.4 (2.1%) (2.4%)
((1)) The Francophone Africa business region includes Chad, Democratic
Republic of the Congo, Gabon, Madagascar, Niger, Republic of the Congo, and
Seychelles.
((2) )
Voice revenue includes inter-segment revenue of $2m in the half year ended 30
September 2023. Excluding inter-segment revenue, voice revenue was $315m in
the half year ended 30 September 2023.
((3) )
Other revenue includes inter-segment revenue of $2m in the half year ended 30
September 2024 and $1m in the prior period. Excluding inter-segment revenue,
other revenue was $61m in half year ended 30 September 2024 and $66m in the
prior period.
Revenue grew by 5.2% in reported currency and by 5.3% in constant currency.
Revenue growth remains impacted due to high inflation in key markets impacting
consumer spend, though it has improved from 3.6% in Q1'25 to 7.1% in Q2'25 on
constant currency basis.
Voice revenue declined by 1.0% in constant currency, as customer base growth
of 9.0% was more than offset by a decline in voice ARPU. Voice ARPU was
negatively impacted by a reduction in the interconnect rate by the regulator
in Congo B and Niger coupled with increased competitive intensity in pricing
in few markets. Customer base growth was supported by the expansion of both
network coverage and distribution infrastructure.
Data revenue grew by 18.1% in constant currency, supported by customer base
growth of 10.6%. Our continued 4G network rollout resulted in an increase in
total data usage of 41.8% and per customer data usage increase of 22.8%. Data
usage per customer increased to 5.1 GB per month (up from 4.2 GB in the prior
period), with smartphone penetration increasing 5.4% to reach 40.8%.
Smartphone data usage per customer reached 6.2 GB per month compared to 5.1 GB
per month in the prior period.
EBITDA at $244m, declined by 7.8% and 7.7% in reported and constant currency,
respectively. The EBITDA margin declined to 38.3%, a decline of 538 basis
points, impacted by an increase in fixed frequency fees in a key market,
rising energy costs combined with a slowdown in revenue growth in key markets.
In Q2'25, EBITDA margins increased to 39.4% from 37.1% in the previous
quarter.
Operating free cash flow was $178m, declined by 5.1% in constant currency, due
to the decline in EBITDA, partially offset by lower capex.
Mobile services
Description Unit of measure Half year ended Quarter ended
Sep-24 Sep-23 Reported Constant Sep-24 Sep-23 Reported Constant
currency currency currency currency
change
change
change
change
Summarised statement of operations
Revenue (1) $m 2,013 2,303 (12.6%) 18.4% 1,026 1,080 (5.0%) 19.3%
Voice revenue $m 960 1,169 (17.9%) 9.4% 484 548 (11.6%) 9.3%
Data revenue $m 844 915 (7.7%) 28.4% 435 429 1.4% 30.2%
Other revenue $m 209 219 (4.8%) 25.6% 107 103 3.6% 27.9%
EBITDA $m 907 1,149 (21.1%) 9.9% 469 538 (12.9%) 12.0%
EBITDA margin % 45.1% 49.9% (484) bps (347) bps 45.7% 49.8% (414) bps (299) bps
Depreciation and amortisation $m (365) (404) (9.6%) 20.7% (185) (190) (2.9%) 21.6%
Operating profit $m 494 678 (27.2%) 6.8% 254 315 (19.6%) 8.3%
Capex $m 297 293 1.7% 1.7% 159 160 (0.9%) (0.9%)
Operating free cash flow $m 610 856 (28.8%) 14.2% 310 378 (18.0%) 19.3%
Operating KPIs
Mobile voice
Customer base million 156.6 147.7 6.1% 156.6 147.7 6.1%
Voice ARPU $ 1.0 1.4 (23.9%) 1.4% 1.0 1.3 (17.3%) 2.2%
Mobile data
Data customer base million 66.0 59.8 10.4% 66.0 59.8 10.4%
Data ARPU $ 2.2 2.7 (18.4%) 13.5% 2.2 2.4 (8.6%) 17.4%
((1) ) Mobile service revenue after
inter-segment eliminations was $2,009m in the half year ended 30 September
2024 and $2,300m in the prior period.
Overall revenue from mobile services declined by 12.6% in reported currency
with growth of 18.4% in constant currency. In Q2'25, constant currency revenue
growth accelerated to 19.3% from 17.4% in the prior quarter. The constant
currency growth was evident across all regions and services.
Voice revenue grew by 9.4% in constant currency, was supported primarily by
the continued growth in the customer base as we continue to invest in our
network and enhance our distribution infrastructure. The voice ARPU growth of
1.4% was supported by an increase in voice usage per customer of 3.5%,
reaching 295 minutes per customer per month, with total minutes on the network
increasing by 11.6%.
Data revenue grew by 28.4% in constant currency, driven by both customer base
growth of 10.4% and data ARPU growth of 13.5%. The customer base growth was
recorded across all the regions supported by the expansion of our 4G network.
96.6% of our total sites are now on 4G, compared with 92.3% in the prior
period. 5G is operational across five countries, with 1,221 sites deployed.
Data usage per customer increased to 6.6 GB per customer per month (from 5.1
GB in the prior period), with smartphone penetration increasing 5.3% to reach
42.9%. Smartphone data usage per customer reached 8.5 GB per month compared to
6.9 GB per month in the prior period. Data revenue contributed to 41.9% of
total mobile services revenue, up from 39.7% in the prior period.
EBITDA was $907m, down 21.1% in reported currency, and up by 9.9% in constant
currency. In Q2'25, EBITDA margins increased to 45.7% from 44.4% in the prior
quarter on the back of improvements across all regions. The EBITDA margin
declined by 484 basis points YoY to 45.1%, a decline of 347 basis points in
constant currency, due largely to increase in fuel prices across key markets.
Operating free cash flow was $610m, up by 14.2% in constant currency, due to
the increased constant currency EBITDA, partially offset by higher capex.
Mobile money
Description Unit of measure Half year ended Quarter ended
Sep-24 Sep-23 Reported Constant Sep-24 Sep-23 Reported Constant
currency currency currency currency
change
change
change
change
Summarised statement of operations
Revenue (1) $m 466 416 11.9% 28.8% 244 215 13.5% 29.1%
Nigeria $m 2 1 - - 1 0 - -
East Africa $m 349 319 9.2% 31.4% 182 165 10.5% 31.1%
Francophone Africa $m 115 96 20.2% 20.2% 61 50 22.4% 21.9%
EBITDA $m 247 214 15.4% 33.0% 128 111 15.6% 32.0%
EBITDA margin % 53.0% 51.4% 162 bps 167 bps 52.6% 51.6% 93 bps 116 bps
Depreciation and amortisation $m (10) (9) 6.9% 29.3% (5) (5) 13.5% 34.6%
Operating profit $m 230 198 16.1% 33.7% 119 103 15.3% 32.1%
Capex $m 10 10 (3.2%) (3.2%) 6 7 (13.7%) (13.7%)
Operating free cash flow $m 237 204 16.3% 35.1% 122 104 17.5% 35.5%
Operating KPIs
Mobile money customer base million 41.5 36.5 13.4% 41.5 36.5 13.4%
Transaction value $bn 63.8 55.7 14.6% 30.1% 33.8 28.9 17.0% 31.5%
Mobile money ARPU $ 2.0 2.0 (3.7%) 10.9% 2.0 2.0 (0.7%) 12.9%
( (1)) Mobile money service revenue post inter-segment eliminations with
mobile services was $361m in the half year ended 30 September 2024 and $323m
in the prior year.
Mobile money revenue grew by 11.9% in reported currency, with constant
currency growth of 28.8%. The constant currency mobile money revenue growth
was driven by revenue growth in both East Africa and Francophone Africa of
31.4% and 20.2%, respectively. In Nigeria, we continue to focus on customer
acquisitions with 1.4 million of active customers registered for mobile money
services at the end of September 2024. Additionally, we added almost 117,000
agents during the year reaching over 231,000 agents as of 30 September 2024.
The constant currency revenue growth of 28.8% was driven by both our customer
base growth of 13.4% and mobile money ARPU growth of 10.9%. The expansion of
our distribution network, particularly our exclusive channels of Airtel Money
branches and kiosks, supported customer base growth of 13.4%. The mobile money
ARPU growth of 10.9% was driven by transaction value per customer growth of
12.1% in constant currency, to $268 per customer per month.
Annualised transaction value amounted to $128bn in reported currency, with
mobile money revenue contributing 19.6% of total Group revenue during the half
year ended 30 September 2024.
EBITDA was $247m, up by 15.4% and 33.0% in reported and constant currency,
respectively. The EBITDA margin reached 53.0%, an improvement of 167 basis
points in constant currency and 162 basis points in reported currency, driven
by continued operating leverage.
The differential in growth rates (between constant currency and reported
currency) is primarily as the result of devaluation in the Zambian kwacha, the
Malawi kwacha, and the Tanzanian shilling.
Regional performance
Nigeria
Description Unit of measure Half year ended Quarter ended
Sep-24 Sep-23 Reported Constant Sep-24 Sep-23 Reported Constant
currency currency currency currency
change
change
change
change
Revenue $m 490 879 (44.2%) 35.8% 234 350 (33.1%) 38.2%
Voice revenue $m 209 414 (49.6%) 23.0% 97 161 (39.7%) 24.5%
Data revenue $m 229 385 (40.5%) 44.4% 112 157 (28.6%) 47.3%
Mobile money revenue $m 2 1 - - 1 0 - -
Other revenue $m 51 79 (35.1%) 57.9% 25 32 (23.1%) 58.8%
EBITDA $m 237 470 (49.5%) 22.7% 115 189 (39.2%) 25.7%
EBITDA margin % 48.4% 53.5% (508) bps (517) bps 49.1% 54.0% (489) bps (486) bps
Operating KPIs
ARPU $ 1.6 3.0 (45.8%) 32.0% 1.6 2.4 (33.9%) 36.5%
East Africa
Description Unit of measure Half year ended Quarter ended
Sep-24 Sep-23 Reported Constant Sep-24 Sep-23 Reported Constant
currency currency currency currency
change
change
change
change
Revenue $m 1,159 1,075 7.8% 21.7% 605 556 8.8% 21.2%
Voice revenue $m 439 441 (0.3%) 10.9% 229 229 (0.1%) 9.5%
Data revenue $m 355 309 14.7% 26.1% 185 158 16.9% 26.4%
Mobile money revenue $m 349 320 9.2% 31.4% 182 165 10.5% 31.1%
Other revenue $m 87 69 25.4% 39.1% 45 36 27.5% 39.8%
EBITDA $m 609 580 4.9% 19.9% 320 301 6.1% 19.6%
EBITDA margin % 52.5% 53.9% (141) bps (79) bps 52.8% 54.2% (135) bps (70) bps
Operating KPIs
ARPU $ 2.7 2.7 (2.4%) 10.2% 2.8 2.8 (0.8%) 10.4%
Francophone Africa
Description Unit of measure Half year ended Quarter ended
Sep-24 Sep-23 Reported Constant Sep-24 Sep-23 Reported Constant
currency currency currency currency
change
change
change
change
Revenue $m 716 670 7.0% 7.1% 371 340 9.4% 9.0%
Voice revenue $m 313 317 (1.1%) (1.0%) 159 159 0.1% (0.3%)
Data revenue $m 260 221 17.9% 18.1% 138 114 21.2% 20.9%
Mobile money revenue $m 115 96 20.2% 20.2% 61 50 22.4% 21.9%
Other revenue $m 62 66 (7.2%) (7.1%) 31 33 (5.1%) (5.3%)
EBITDA $m 307 316 (2.9%) (2.8%) 163 161 1.2% 0.8%
EBITDA margin % 42.8% 47.2% (437) bps (438) bps 43.8% 47.3% (354) bps (355) bps
Operating KPIs
ARPU $ 3.6 3.7 (3.1%) (3.0%) 3.7 3.7 (0.3%) (0.7%)
Consolidated performance
Description UoM Half year ended September 2024 Half year ended September 2023
Mobile services Mobile money Unallocated Eliminations Total Mobile services Mobile money Unallocated Eliminations Total
Revenue $m 2,013 466 - (109) 2,370 2,303 416 - (96) 2,623
Voice revenue $m 960 - - 960 1,169 - - 1,169
Data revenue $m 844 - - 844 915 - - 915
Other revenue $m 209 - (4) 205 219 - (3) 216
EBITDA $m 907 247 (67) - 1,087 1,149 214 (61) - 1,302
EBITDA margin % 45.1% 53.0% 45.8% 49.9% 51.4% 49.6%
Depreciation and amortisation $m (365) (10) (6) - (381) (404) (9) (4) - (417)
Operating profit $m 494 230 (18) - 706 678 198 9 - 885
Related party transactions
Related party transactions are disclosed in note 16 to the condensed set of
financial statements.
There have been no material changes in the related party transactions
described in the last annual report.
Risk factors
The risk factors summarised below relate to the Group's business and industry
in which it operates. Additional risks and uncertainties relating to the Group
that are currently unknown to the Group, or those the Group currently deems
immaterial, may, individually or cumulatively, also have a material adverse
impact on the Group's business, results of operations and financial position.
The Group's principal and emerging risks and risk management process are
described in pages 72-79 of our 2024 Annual Report and Accounts. Based on the
Group's assessment, there has been no changes to the group's principal risks
in the period.
Summary of principal risks
The Group continually monitors its external and internal environment to
identify risks which have the ability to impact its operations, financial
performance or the achievement of its objectives.
1. We operate in a competitive environment with the potential for
aggressive competition by existing players, or the entry of new players, which
could both put a downward pressure on prices, adversely affecting our revenue
and profitability.
2. Failure to innovate through simplifying the customer experience,
developing adequate digital touchpoints in line with changing customer needs
and competitive landscape could lead to loss of customers and market share.
3. Global geopolitical and regional tensions have the potential to
impact our business directly and indirectly due to the interconnectedness of
the global supply chain. Relatedly, adverse macroeconomic conditions such as
rising inflation and increased cost of living not only puts pressure on the
disposable income of our customers but also increases the cost of inputs for
our business negatively impacting sales and profitability.
4. Cybersecurity threats through internal or external sabotage or system
vulnerabilities could potentially result in customer data breaches and/or
service downtimes.
5. Adverse changes in our external business environment and
macro-economic conditions such as supply chain disruptions, increase in global
commodity prices and inflationary pressures could lead to a significant
increase in our operating cost structure while also negatively impacting the
disposable income of consumers. These adverse economic conditions therefore
not only put pressure on our profitability but also on customer usage for our
services.
6. Shortages of skilled telecommunications professionals in some markets
and the inability to identify and develop successors for key leadership
positions could both lead to disruptions in the execution of our corporate
strategy.
7. Our internal control environment is subject to the risk that controls
may become inadequate due to changes in internal or external conditions, new
accounting requirements, delays, or inaccuracies in reporting.
8. Our ability to provide quality of service to our customers and meet
quality of service (QoS) requirements depends on the robustness and resilience
of our technology stack and ecosystem encompassing hardware, software,
products, services, and applications and our ability to respond appropriately
to any disruptions. However, telecommunications networks are subject to the
risks of technical failures, aging infrastructure, human error, wilful acts of
destruction or natural disasters.
9. We operate in a diverse and dynamic legal, tax and regulatory
environment. Adverse changes in the political, macro-economic and policy
environment could have a negative impact on our ability to achieve our
strategy. While the group makes every effort to comply with its legal and
regulatory obligations in all its operating jurisdictions in line with the
group's risk appetite, we are however continually faced with an uncertain and
constantly evolving legal, regulatory, and policy environment in some of the
markets where we operate.
10. Our multinational footprint means we are constantly exposed to the risk
of adverse currency fluctuations and the macroeconomic conditions in the
markets where we operate. We derive revenue and incur costs in local
currencies where we operate, but we also incur costs in foreign currencies,
mainly from buying equipment and services from manufacturers and technology
service providers. That means adverse movements in exchange rates between the
currencies in our OpCos and the US dollar could have a negative effect on our
liquidity and financial condition. In some markets, we face instances of
limited supply of foreign currency within the local monetary system. This not
only constrains our ability to fully benefit at Group level from strong cash
generation by those OpCos but also impacts our ability to make timely foreign
currency payments to our international suppliers.
Given the severity of this risk, specifically in some of our OpCos, the Group
management continuously monitors the potential impact of this risk of exchange
rate fluctuations based on the following methodology:
a) Comparing the average devaluation of each currency in the markets in
which the Group operates against US dollar on 3-year and 5-year historic basis
and onshore forward exchange rates over a 1-year period.
b) If either of the above devaluation is higher than 5% per annum,
management selects the highest of these exchange rates.
c) Management then uses this exchange rate to monitor the potential
impact of using such rate on the Group's income statement so that the Group
can actively monitor and assess the impact on the Group's financials due to
exchange rate fluctuations.
Additionally, for our Nigerian operations, management uses different
sensitivity analysis for scenario planning purposes which includes the recent
impact of the naira devaluation.
With respect to currency devaluation sensitivity going forward, on a 12-month basis assuming that the USD appreciation occurs at the beginning of the period, a further 1% USD appreciation across all currencies in our OpCos would have a negative impact of $41m - $43m on revenues, $19m - $20m on EBITDA and $27m - $29m on foreign exchange loss (excluding derivatives). Our largest exposure is to the Nigerian naira, for which on a similar basis, a further 1% USD appreciation would have a negative impact of $9m - $10m on revenues, $4m - $5m on EBITDA and $15m - $16m on foreign exchange loss (excluding derivatives).
This does not represent any guidance and is being used solely to illustrate
the potential impact of further currency devaluation on the Group for the
purpose of exchange rate risk management. The accounting under IFRS is based
on exchange rates in line with the requirements of IAS 21 'The Effect of
Changes in Foreign Exchange' and does not factor in the devaluation mentioned
above.
Based on above-mentioned specific methodology for the identified OpCos,
management evaluates specific mitigation actions based on available mechanisms
in each of the geographies. For further details on such mitigation action,
refer to the risk section of the Annual Report and Accounts 2023/24.
Going concern
As stated in note 3.1 to the condensed financial statements, the directors are
satisfied that the Group has sufficient resources to continue in operation for
the foreseeable future, a period of not less than 12 months from the date of
this report. Accordingly, they continue to adopt the going concern basis in
preparing the condensed financial statements.
Forward looking statements
This document contains certain forward-looking statements regarding our
intentions, beliefs or current expectations concerning, amongst other things,
our results of operations, financial condition, liquidity, prospects, growth,
strategies and the economic and business circumstances occurring from time to
time in the countries and markets in which the Group operates.
These statements are often, but not always, made through the use of words or
phrases such as "believe," "anticipate," "could," "may," "would," "should,"
"intend," "plan," "potential," "predict," "will," "expect," "estimate,"
"project," "positioned," "strategy," "outlook", "target" and similar
expressions.
It is believed that the expectations reflected in this document are
reasonable, but they may be affected by a wide range of variables that could
cause actual results to differ materially from those currently anticipated.
All such forward-looking statements involve estimates and assumptions that are
subject to risks, uncertainties and other factors that could cause actual
future financial condition, performance and results to differ materially from
the plans, goals, expectations and results expressed in the forward-looking
statements and other financial and/or statistical data within this
communication.
Among the key factors that could cause actual results to differ materially
from those projected in the forward-looking statements are uncertainties
related to the following: the impact of competition from illicit trade; the
impact of adverse domestic or international legislation and regulation;
changes in domestic or international tax laws and rates; adverse litigation
and dispute outcomes and the effect of such outcomes on Airtel Africa's
financial condition; changes or differences in domestic or international
economic or political conditions; the ability to obtain price increases and
the impact of price increases on consumer affordability thresholds; adverse
decisions by domestic or international regulatory bodies; the impact of market
size reduction and consumer down-trading; translational and transactional
foreign exchange rate exposure; the impact of serious injury, illness or death
in the workplace; the ability to maintain credit ratings; the ability to
develop, produce or market new alternative products and to do so profitably;
the ability to effectively implement strategic initiatives and actions taken
to increase sales growth; the ability to enhance cash generation and pay
dividends and changes in the market position, businesses, financial condition,
results of operations or prospects of Airtel Africa.
Past performance is no guide to future performance and persons needing advice
should consult an independent financial adviser. The forward-looking
statements contained in this document reflect the knowledge and information
available to Airtel Africa at the date of preparation of this document and
Airtel Africa undertakes no obligation to update or revise these
forward-looking statements, whether as a result of new information, future
events or otherwise. Readers are cautioned not to place undue reliance on such
forward-looking statements.
No statement in this communication is intended to be, nor should be construed
as, a profit forecast or a profit estimate and no statement in this
communication should be interpreted to mean that earnings per share of Airtel
Africa plc for the current or any future financial periods would necessarily
match, exceed or be lower than the historical published earnings per share of
Airtel Africa plc.
Financial data included in this document are presented in US dollars rounded
to the nearest million. Therefore, discrepancies in the tables between totals
and the sums of the amounts listed may occur due to such rounding. The
percentages included in the tables throughout the document are based on
numbers calculated to the nearest $1,000 and therefore minor rounding
differences may result in the tables. Growth metrics are provided on a
constant currency basis unless otherwise stated. The Group has presented
certain financial information on a constant currency basis. This is calculated
by translating the results for the current financial year and prior financial
year at a fixed 'constant currency' exchange rate, which is done to measure
the organic performance of the Group. Growth rates for our reporting regions
and service segments are provided in constant currency as this better
represents the performance of the business.
Airtel Africa plc
Results for the half year ended 30 September 2024
Consolidated Financial Statements
Interim Condensed Consolidated Statement of Comprehensive Income
(All amounts are in US$ millions unless stated otherwise)
Notes For the six months ended
30 September 2024 30 September 2023
Income
Revenue 5 2,370 2,623
Other income 12 16
2,382 2,639
Expenses
Network operating expenses 463 491
Access charges 122 179
License fee and spectrum usage charges 127 124
Employee benefits expense 148 152
Sales and marketing expenses 311 289
Impairment loss on financial assets 5 4
Other operating expenses 119 98
Depreciation and amortisation 381 417
1,676 1,754
Operating profit 706 885
Finance costs
- Derivative and foreign exchange losses
Nigerian naira 231 557
Other currencies 29 97
- Other finance costs 280 236
Finance income (12) (17)
Share of profit of associate and joint venture accounted for using (0) (0)
equity method
Profit before tax 178 12
Income tax expense 6 99 25
Profit/(loss) for the period 79 (13)
Profit before tax (as presented above) 178 12
Add: Exceptional items 7 231 471
Underlying profit before tax 409 483
Profit/(loss) after tax (as presented above) 79 (13)
Add: Exceptional items 7 151 317
Underlying profit after tax 230 304
Notes For the six months ended
30 September 2024 30 September 2023
Profit/(loss) for the period (continued from previous page) 79 (13)
Other comprehensive income ('OCI')
Items to be reclassified subsequently to profit or loss:
Loss due to foreign currency translation differences (3) (677)
Gain on debt instruments at fair value through other comprehensive income 0 -
Share of OCI of associate and joint venture accounted for using equity 0 (0)
method
Loss on cash flow hedges (0) -
Tax on above 2 4
(1) (673)
Items not to be reclassified subsequently to profit or loss:
Re-measurement loss on defined benefit plans (1) (0)
Tax on above 0 0
(1) (0)
Other comprehensive loss for the period (2) (673)
Total comprehensive income/ (loss) for the period 77 (686)
Profit/ (loss) for the period attributable to: 79 (13)
Owners of the company 31 (55)
Non-controlling interests 48 42
Other comprehensive loss for the period attributable to: (2) (673)
Owners of the company 2 (659)
Non-controlling interests (4) (14)
Total comprehensive income/(loss) for the period attributable to: 77 (686)
Owners of the company 33 (714)
Non-controlling interests 44 28
Earnings/(loss) per share
Basic 8 0.8 cents (1.5 cents)
Diluted 8 0.8 cents (1.5 cents)
Interim Condensed Consolidated Statement of Financial Position
(All amounts are in US$ millions unless stated otherwise)
Notes As of
30 September 2024 31 March 2024
Assets
Non-current assets
Property, plant and equipment 9 1,867 1,827
Capital work-in-progress 9 204 232
Right of use assets 2,713 1,483
Goodwill 10 2,531 2,569
Other intangible assets 739 725
Intangible assets under development 10 4
Investments accounted for using equity method 5 5
Financial assets
- Investments 0 0
- Derivative instruments 0 0
- Others 9 30
Income tax assets (net) 8 5
Deferred tax assets (net) 551 543
Other non-current assets 163 146
8,800 7,569
Current assets
Inventories 28 26
Financial assets
- Investments 1 2
- Derivative instruments 2 10
- Trade receivables 192 184
- Cash and cash equivalents 11 406 620
- Other bank balances 11 40 353
- Balance held under mobile money trust 830 737
- Others 76 106
Other current assets 274 254
1,849 2,292
Total assets 10,649 9,861
Notes As of
30 September 2024 31 March 2024
Liabilities
Current liabilities
Financial liabilities
- Borrowings 13 1,096 1,426
- Lease liabilities 16 231 357
- Put option liability 539 -
- Derivative instruments 68 144
- Trade payables 425 422
- Mobile money wallet balance 808 722
- Others 333 440
Provisions 71 78
Deferred revenue 123 123
Current tax liabilities (net) 58 119
Other current liabilities 205 215
3,957 4,046
Net current liabilities (2,108) (1,754)
Non-current liabilities
Financial liabilities
- Borrowings 13 1,123 947
- Lease liabilities 3,133 1,732
- Put option liability 16 - 552
- Derivative instruments 0 33
- Others 158 146
Provisions 24 22
Deferred tax liabilities (net) 77 67
Other non-current liabilities 7 16
4,522 3,515
Total liabilities 8,479 7,561
Net Assets 2,170 2,300
Equity
Share capital 12 1,849 1,875
Reserves and surplus 179 285
Equity attributable to owners of the company 2,028 2,160
Non-controlling interests ('NCI') 142 140
Total equity 2,170 2,300
The accompanying notes form an integral part of these interim condensed
consolidated financial statements.
For and on behalf of the Board of Airtel Africa plc
Sunil Taldar
Chief Executive Officer
24 October 2024
Interim Condensed Consolidated Statement of Changes in Equity
(All amounts are in US$ millions unless stated otherwise)
Equity attributable to owners of the company
Share Capital Reserves and Surplus Equity attributable to owners of the company
Amount Retained earnings Transactions with NCI reserve Other components of equity Non-controlling interests (NCI) Total
equity
No. of shares
Total
As of 1 April 2023 6,839,896,081 3,420 3,902 (929) (2,758) 215 3,635 173 3,808
(Loss)/profit for the period - - (55) - - (55) (55) 42 (13)
Other comprehensive loss - - (0) - (659) (659) (659) (14) (673)
Total comprehensive income/(loss) - - (55) - (659) (714) (714) 28 (686)
Transaction with owners of equity
Employee share-based payment reserve - - (0) - 2 2 2 - 2
Purchase of own shares (net) - - - - (1) (1) (1) - (1)
Cancellation of deferred shares (3,081,744,577) (1,541) 1,541 - - 1,541 - - -
Transactions with NCI - - - 10 - 10 10 2 12
Dividend to owners of the company - - (123) - - (123) (123) - (123)
Dividend (including tax) to NCI - - - - - - - (34) (34)
As of 30 September 2023 3,758,151,504 1,879 5,265 (919) (3,416) 930 2,809 169 2,978
(Loss)/Profit for the period - - (110) - - (110) (110) 34 (76)
Other comprehensive loss - - 0 - (482) (482) (482) (18) (500)
Total comprehensive income/(loss) - - (110) - (482) (592) (592) 16 (576)
Transaction with owners of equity
Employee share-based payment reserve - - (1) - - (1) (1) - (1)
Purchase of own shares (net) - - - - 2 2 2 - 2
Ordinary shares buy back programme (7,389,855) (4) (9) - (37) (46) (50) - (50)
Transactions with NCI - - - 81 - 81 81 (14) 67
Dividend to owners of the company - - (89) - - (89) (89) - (89)
Dividend (including tax) to NCI - - - - - - - (31) (31)
As of 31 March 2024 3,750,761,649 1,875 5,056 (838) (3,933) 285 2,160 140 2,300
Profit for the period - - 31 - - 31 31 48 79
Other Comprehensive income/(loss) - - (1) - 3 2 2 (4) (2)
Total comprehensive income - - 30 - 3 33 33 44 77
Transactions with owners of equity
Employee share-based payment reserve - - (3) - (2) (5) (5) - (5)
Purchase of own shares (net) - - - - 6 6 6 - 6
Ordinary shares buy back programme (53,159,199) (26) (79) - 55 (24) (50) - (50)
Transactions with NCI((1)) - - - 17 - 17 17 0 17
Dividend to owners of the company - - (133) - - (133) (133) - (133)
Dividend (including tax) to NCI - - - - - - - (42) (42)
As of 30 September 2024 3,697,602,450 1,849 4,871 (821) (3,871) 179 2,028 142 2,170
( )
(1) Transaction with NCI reserve increased mainly due to reversal
of put option liability by $15m for dividend distribution to put option NCI
holders. Any dividend paid to the put option NCI holders is adjustable against
the put option liability based on the put option arrangement.
Interim Condensed Consolidated Statement of Cash Flows For the six months ended
(All amounts are in US$ millions unless stated otherwise)
30 September 2024 30 September 2023
Cash flows from operating activities
Profit before tax 178 12
Adjustments for -
Depreciation and amortization 381 417
Finance income (12) (17)
Finance costs
- Derivative and foreign exchange losses
Nigerian naira 231 557
Other currencies 29 97
- Other finance costs 280 236
Loss on sale of property, plant and equipment, net - 0
Share of profit of associate and joint venture accounted for using (0) (0)
equity method
Other non-cash adjustments((1)) 7 (1)
Operating cash flow before changes in working capital 1,094 1,301
Changes in working capital
Increase in trade receivables (16) (38)
Increase in inventories (6) (7)
Increase in trade payables 17 8
Increase in mobile money wallet balance 89 139
Decrease in provisions (6) (18)
Increase in deferred revenue 4 10
Increase in other financial and non-financial liabilities 3 24
Increase in other financial and non-financial assets (0) (71)
Net cash generated from operations before tax 1,179 1,348
Income taxes paid (200) (227)
Net cash generated from operating activities (a) 979 1,121
Cash flows from investing activities
Purchase of property, plant and equipment and capital (412) (387)
work-in-progress
Purchase of intangible assets and intangible assets under development (100) (137)
Maturity of deposits with bank 360 340
Investment in deposits with bank (46) (581)
Sell/(Purchase) of other short term investment 1 (1)
Interest received 20 15
Net cash used in investing activities (b) (177) (751)
Cash flows from financing activities
Purchase of shares under buy-back programme (79) -
Purchase of own shares by ESOP trust (net) (2) (2)
Proceeds from sale of shares to NCI 2 -
Proceeds from borrowings 770 384
Repayment of borrowings (917) (249)
Repayment of lease liabilities (130) (165)
Dividend paid to non-controlling interests (51) (43)
Dividend paid to owners of the company (133) (123)
Payment of deferred spectrum liability (1) (3)
Interest on borrowings, lease liabilities and other liabilities (296) (211)
Outflow on maturity of derivatives (net) (116) (0)
Net cash used in financing activities (c) (953) (412)
Decrease in cash and cash equivalents during the period (a+b+c) (151) (42)
Currency translation differences relating to cash and cash equivalents 15 (64)
Cash and cash equivalent as at beginning of the period 900 841
Cash and cash equivalents as at end of the period (refer to Note 11) ((2)) 764 735
((1)) For the six months ended 30 September 2024 and 30 September 2023, this
mainly includes movement in impairment of trade receivables and other
provisions.
((2)) Includes balances held under mobile money trust of $830m (September
2023: $720m) on behalf of mobile money customers which are not available for
use by the Group.
Notes to Interim Condensed Consolidated Financial Statements
(All amounts are in US$ millions unless stated otherwise)
1. Corporate information
Airtel Africa plc ('the company') is a public company limited by shares
incorporated and domiciled in the United Kingdom (UK) under the Companies Act
2006 and is registered in England and Wales (registration number 11462215).
The registered address of the company is First Floor, 53/54 Grosvenor Street,
London, W1K 3HU, United Kingdom. The company is listed both on the London
Stock Exchange (LSE) and Nigerian Stock Exchange (NGX). The company is a
subsidiary of Airtel Africa Mauritius Limited ('the parent'), a company
registered in Mauritius. The registered address of the parent is c/o IQ EQ
Corporate Services (Mauritius) Ltd., 33, Edith Cavell Street, Port Louis,
11324, Mauritius.
The company, together with its subsidiary undertakings (hereinafter referred
to as 'the Group') has operations in Africa. The principal activities of the
Group, its associate and its joint venture primarily consist of the provision
of telecommunications and mobile money services.
2. Basis of preparation
These interim financial statements have been prepared in accordance with IAS
34 'Interim Financial Reporting' as issued by the International Accounting
Standards Board (IASB) and approved for use in the UK by the UK Accounting
Standards Endorsement Board (UKEB). Accordingly, the interim financial
statements do not include all the information required for a complete set of
financial statements and should be read in conjunction with the Group's annual
consolidated financial statements for the year ended 31 March 2024. Further,
selected explanatory notes have been included to explain events and
transactions that are significant for the understanding of the changes in the
Group's financial position and performance since the latest annual
consolidated financial statements.
These interim financial statements for the six months ended 30 September 2024
do not constitute statutory accounts as defined in section 434 of the UK
Companies Act 2006 and are unaudited. The information relating to the year
ended 31 March 2024 is an extract from the Group's published annual report for
that year, which has been delivered to the Companies House on 12 July 2024,
and on which the auditors' report was unqualified and did not contain any
emphasis of matter or statements under section 498(2) or 498(3) of the UK
Companies Act 2006.
These interim financial statements apply the same accounting policies,
presentation and methods of calculation as those followed in the preparation
of the Group's annual consolidated financial statements for the year ended 31
March 2024. Further, there have been no changes in critical accounting
estimates, assumptions and judgements. These interim financial statements of
the Group for the six months ended 30 September 2024 were authorised by the
Board of Directors on 24 October 2024.
3. Basis of measurement
The Interim financial statements have been prepared on the historical cost
basis except for financial instruments held at fair value and are presented in
United States Dollars (USD), with all values stated in US$ million and rounded
to the nearest million except when otherwise indicated. Further, amounts which
are less than half a million are appearing as '0'.
3.1 Going concern
These interim 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 December 2025 (going concern
assessment period) under both a base case and reasonable worst-case scenarios
including a reverse stress test.
This assessment takes into consideration its principal risks
and uncertainties including a reduction in revenue and EBITDA and a
devaluation of the various currencies in the countries in which the Group
operates including the Nigerian naira. This assessment also takes into
consideration the repayment of all liabilities that fall due over the going
concern period including the repayment of borrowings and other liabilities. 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 $313m expiring beyond the going concern assessment period, which
will fulfil the Group's cash flow requirement under both the base and
reasonable worst-case scenarios.
Having considered all the above-mentioned factors impacting
the Group's businesses, the impact of downside sensitivities, and the
mitigating actions available to the group including a reduction and deferral
of capital expenditure, the directors are satisfied that the Group has
adequate resources to continue its operational existence for the foreseeable
future. Accordingly, the directors continue to adopt the going concern basis
of accounting in preparing the consolidated financial statements.
4. Significant transactions/new developments
a) The directors recommended on 8 May 2024 and shareholders approved
on 03 July 2024, a final dividend of 3.57 cents per ordinary shares for the
year ended 31 March 2024, which was paid on 26 July 2024 to the holders of
ordinary shares on the register of members at the close of business on 21 June
2024.
b) On 20 May 2024, Bharti Airtel International (Netherlands) B.V.,
subsidiary of the Company repaid in full the 5.35% Guaranteed Senior Notes
amounting to $550m on its maturity date. The bond repayment was made
exclusively out of the cash reserves of the group.
c) During the half year ended September 2024, the Nigerian naira has
devalued against the US Dollar by approximately 28% (USD appreciation of 22%)
where the exchange rate moved to 1,669 naira per USD at the close of the
current half year as against the rate of 1,303 naira per USD at the close of
March 2024. This resulted in a material impact on the Group's financial
results arising from the translation of monetary items at closing exchange
rates in addition to the impact on the valuation of derivatives.
In line with the Group's policy on exceptional items and
alternative performance measures, the impact of the devaluation pertaining to
the quarters ended June 2024 and September 2024 for the Naira devaluation have
been presented as an exceptional item with the following impact:
· the derivative and foreign exchange losses amounting to $231m, and
· the corresponding tax impact of $80m.
d) On 01 March 2024, the Company announced the commencement of its
$100m share buy-back programme to be achieved in two tranches of maximum $50m
each. Following the completion of its first tranche of the buy-back, the
company has announced the commencement of its second tranche of the programme
on 19 August 2024. As part of the programme, the Company has entered into an
agreement with Citigroup Global Markets Limited ("Citi") to conduct the second
tranche of the buy-back amounting to a maximum of $50m and carry out on-market
purchases of its ordinary shares, with the Company subsequently purchasing its
ordinary shares from Citi. During the six months ended 30 September 2024, the
Company bought-back and cancelled 53,159,199 shares (28,194,416 and 24,964,783
against first and second tranche respectively), resulting in 3,697,602,450
ordinary shares outstanding as at 30 September 2024. The purchase price of the
shares bought-back was $79m and the Company carries a liability of $12m as
part of 'other financial liabilities' relating to the remaining buy-back
against the second tranche of agreement with Citi. The nominal value ($0.5 per
share) of the cancelled shares, amounting to $26m, has been transferred to the
capital redemption reserve.
e) During the period, the Group has renewed the tower lease agreements
with American Tower Corporation ('ATC') across four of its OpCos. The renewals
relate to approximately 7,100 sites across Nigeria, Uganda, Kenya and Niger
which were set to expire over the next 12 to 24 months and were renewed for a
period of 12 years.
These material lease extensions of the tower lease agreements represent a
modification in accordance with IFRS 16, accordingly, the company has applied
modification accounting by remeasuring the lease liability using the updated
lease payments over the revised lease term with a corresponding adjustment to
the ROU asset. This has resulted in an increase in both lease liabilities and
ROU assets by $ 1,225m.
5. Segmental information
The Group's segment information is provided on the basis of geographical
clusters and products to the Group's chief executive officer (chief operating
decision maker - 'CODM') for the purposes of resource allocation and
assessment of performance.
The Group's operating segments are as follows:
Nigeria Mobile Services - Comprising of mobile service operations in Nigeria;
East Africa Mobile Services - Comprising of mobile service operations in
Uganda, Zambia, Kenya, Tanzania, Malawi and Rwanda;
Francophone Africa Mobile Services - Comprising of mobile service operations
in DRC, Gabon, Chad, Niger, Congo B, Madagascar and Seychelles;
Mobile money services*- Comprising of mobile money services across the Group.
* Mobile money services segment consolidates the results of mobile money
operations from all operating entities within the Group. Airtel Money Commerce
B.V. (AMC BV) is the holding company for all mobile money services for the
Group, and as of 30 September 2024, it controls all mobile money operations
excluding operations in Nigeria. It is management's intention to continue work
to transfer the Nigerian mobile money services operations into AMC BV, subject
to local regulatory approvals.
Each segment derives revenue from the respective services housed within each
segment, as described above. Expenses, assets and liabilities primarily
related to the corporate headquarters and centralised functions of the Group
are presented as unallocated Items.
The amounts reported to CODM are based on the accounting principles used in
the preparation of the financial statements. Each segment's performance is
evaluated based on segment revenue and segment result.
The segment result is Underlying EBITDA (defined as operating profit/(loss)
for the period before depreciation, amortisation and exceptional items). This
is the measure reported to the CODM for the purpose of resource allocation and
assessment of segment performance. During the six months ended 30 September
2024 and 30 September 2023, , the definition of EBITDA is equal to underlying
EBITDA since there are no exceptional items pertaining to EBITDA and therefore
EBITDA is presented in the segment information below.
Inter-segment pricing and terms are reviewed and changed by management to
reflect changes in market conditions and changes to such terms are reflected
in the period in which the changes occur.
The 'Eliminations' column comprises inter-segment revenues eliminated upon
consolidation.
Segment assets and segment liabilities comprise those assets and liabilities
directly managed by each segment. Segment assets primarily include
receivables, property, plant and equipment, capital work in progress,
right-to-use assets, intangibles assets, inventories and cash and cash
equivalents. Segment liabilities primarily include operating liabilities.
Segment capital expenditure comprises investment in property, plant and
equipment, capital work in progress, intangible assets (excluding licenses)
and capital advances.
Investment elimination upon consolidation and resulting goodwill impacts are
reflected in the 'Eliminations' column.
Summary of the segmental information and disaggregation of revenue is as
follows:
For the six months ended 30 September 2024
Mobile money Others
Nigeria mobile services East Africa mobile services Francophone Africa mobile services (unallocated) Total
Eliminations
Revenue from external customers
Voice revenue 209 438 313 - - - 960
Data revenue 229 355 260 - - - 844
Mobile money revenue ((1)) - - - 361 - - 361
Other revenue ((2)) 50 83 61 - 11 - 205
Total revenue from external customers 488 876 634 361 11 - 2,370
Inter-segment revenue 1 7 2 105 4 (119) -
Total revenue 489 883 636 466 15 (119) 2,370
EBITDA 238 418 244 247 (60) - 1,087
Less:
Depreciation and amortisation 92 158 115 10 6 - 381
Finance costs
- Derivative and foreign exchange losses
Nigerian naira 231
Other currencies 29
- Other finance costs 280
Finance income (12)
Share of profit of associate and joint venture accounted for using equity (0)
method
Profit before tax 178
Other segment items
Capital expenditure 75 156 66 10 9 - 316
As of 30 September 2024
Segment assets 2,313 2,718 1,915 1,217 20,316 (17,830) 10,649
Segment liabilities 2,613 2,942 2,613 977 4,548 (5,214) 8,479
Investment in associate accounted for using equity method (included in segment - - 5 - - - 5
assets above)
((1)) Mobile money revenue is net of inter-segment elimination of $105m mainly
for commission on sale of airtime. It includes $71m pertaining to East Africa
mobile services and the balance $34m pertaining to Francophone Africa mobile
service.
((2)) Other revenue includes messaging, value added services, enterprise, site
sharing and handset sale revenue.
Summary of the segmental information and disaggregation of revenue is as
follows:
For the six months ended 30 September 2023
Mobile money Others
Nigeria mobile services East Africa mobile services Francophone Africa mobile services (unallocated) Total
Eliminations
Revenue from external customers
Voice revenue 414 440 315 - - - 1,169
Data revenue 385 309 221 - - - 915
Mobile money revenue ((1)) - - - 323 - - 323
Other revenue ((2)) 78 66 66 - 6 - 216
Total revenue from external customers 877 815 602 323 6 - 2,623
Inter-segment revenue 1 7 3 93 5 (109) -
Total revenue 878 822 605 416 11 (109) 2,623
EBITDA 474 408 264 214 (58) - 1,302
Less:
Depreciation and amortisation 156 145 103 9 4 - 417
Finance costs
- Derivative and foreign exchange losses
Nigerian naira 557
Other currencies 97
- Other finance costs 236
Finance income (17)
Share of profit of associate and joint venture accounted for using equity (0)
method
Profit before tax 12
Other segment items
Capital expenditure 109 107 77 10 9 - 312
As of 31 March 2024
Segment assets 1,675 2,336 1,647 1,151 20,774 (17,722) 9,861
Segment liabilities 1,890 2,569 2,346 929 9,338 (9,511) 7,561
Investment in associate accounted for using equity method (included in segment - 5 - - - 5
assets above)
((1)) Mobile money revenue is net of inter-segment elimination of $93m mainly
for commission on sale of airtime. It includes $63m pertaining to East Africa
mobile services and balance $30m pertaining to Francophone Africa mobile
services.
((2)) Other revenue includes messaging, value added services, enterprise, site
sharing and handset sale revenue.
6. Income tax
The major components of the income tax expense are:
For the six months ended
30 September 2024 30 September 2023
Current tax 136 197
Deferred tax (37) (172)
Income tax expense 99 25
The tax charge for the six months ended 30 September 2024 has been calculated
for each operating country by applying the best estimate of the effective rate
of tax expected to apply for the period ending 31 March 2025 on the pre-tax
profits of the six months period using rates substantively enacted by 30
September 2024.
The charge is adjusted for discrete items (if any) occurring in the interim
period as required by IAS 34 'Interim Financial Reporting'.
Tax charge for the six months ended 30 September 2024 also includes the
related tax impacts arising out of withholding tax ('WHT') on unremitted
earnings and cross charge to Group entities and deferred tax asset recognition
basis projected profitability in operating countries, wherever applicable.
7. Exceptional items
Underlying profit before tax excludes the following exceptional
items
For the six months ended
30 September 2024 30 September 2023
Profit before tax 178 12
Add: Exceptional items
Finance costs
- Derivative and foreign exchange losses
Nigerian naira (refer to note 4(c)) 231 471
231 471
Underlying profit before tax 409 483
Underlying profit after tax excludes the following exceptional items:
( )
For the six months ended
30 September 2024 30 September 2023
Profit/ (Loss) after tax 79 (13)
-Exceptional items (as above) 231 471
- Tax on above exceptional items
Nigerian naira (refer to note 4(c)) (80) (154)
151 317
Underlying profit after tax 230 304
Profit attributable to non-controlling interests include benefit of $0m and
$0m during the six months ended 30 September 2024 and 30 September 2023
respectively, relating to the above exceptional items.
8. Earnings per share ('EPS')
The details used in the computation of basic EPS:
For the six months ended
30 September 2024 30 September 2023
Profit/(loss) for the period attributable to owners of the company 31 (55)
Weighted average ordinary shares outstanding for basic EPS 3,726,752,375 3,751,042,649
Basic earnings/(loss) per share 0.8 cents (1.5 cents)
The details used in the computation of diluted EPS:
For the six months ended
30 September 2024 30 September 2023
Profit/(loss) for the period attributable to owners of the company 31 (55)
Weighted average ordinary shares outstanding for diluted EPS((1)(2)) 3,731,482,789 3,751,042,649
Diluted earnings/(loss) per share 0.8 cents (1.5 cents)
(1) The difference between the basic and diluted number of shares at the end
of September 2024 being 4,730,414 (September 2023: Nil) relates to awards
committed but not yet issued under the Group's share-based payment schemes.
(2) For the six months ended 30 September 2023, 5,714,418 shares granted
under different share-based plans are not included in the calculation of
diluted earnings per share as these are anti-dilutive on account of losses
during the previous period.
9. Property, plant and equipment ('PPE')
The following table presents the reconciliation of changes in the carrying
value of PPE for the six months ended 30 September 2024 and 30 September 2023:
Leasehold Improvements Building Land Plant and Equipment Furniture & Fixture Vehicles Office Equipment Computer Total Capital work in progress ((2))
Gross carrying value
Balance as of 1 April 2023
49 43 25 3,249 70 22 61 696 4,215 212
Additions / capitalization 0 0 - 241 5 0 9 22 277 304
Disposals / adjustments ((1)) (0) (1) - (20) (4) 0 1 0 (24) (277)
Foreign currency translation impact (5) (5) (2) (910) (8) (0) (10) (94) (1,034) (46)
Balance as of 30 September 2023 44 37 23 2,560 63 22 61 624 3,434 193
Balance as of 1 April 2024 44 33 24 2,382 61 21 57 593 3,215 232
Additions / capitalization 0 - - 271 2 0 10 33 316 306
Disposals / adjustments ((1)) (0) - - (4) (0) (0) (1) (1) (6) (316)
Foreign currency translation impact 0 (0) 0 (136) (0) 0 (2) (9) (147) (18)
Balance as of 30 September 2024 44 33 24 2,513 63 21 64 616 3,378 204
Accumulated Depreciation
Balance as of 1 April 2023 42 19 - 1,137 30 20 39 633 1,920 -
Charge 1 1 - 181 6 0 8 18 215 -
Disposals / adjustments ((1)) 0 (0) - (26) (4) 2 4 1 (23) -
Foreign currency translation impact (4) (3) - (507) (4) (1) (9) (85) (613) -
Balance as of 30 September 2023 39 17 - 785 28 21 42 567 1,499 -
Balance as of 1 April 2024 38 16 - 704 28 20 43 539 1,388 -
Charge 1 1 - 159 6 0 8 17 192 -
Disposals / adjustments ((1)) (0) - - (3) (0) (0) (2) (2) (7) -
Foreign currency translation impact 0 (0) - (55) 1 0 (1) (7) (62) -
Balance as of 30 September 2024 39 17 - 805 35 20 48 547 1,511 -
Net carrying value
As of 1 April 2023 7 24 25 2,112 40 2 22 63 2,295 212
As of 30 September 2023 5 20 23 1,775 35 1 19 57 1,935 193
As of 1 April 2024 6 17 24 1,678 33 1 14 54 1,827 232
As of 30 September 2024 5 16 24 1,708 28 1 16 69 1,867 204
-
(1) Related to the reversal of gross carrying value and accumulated
depreciation on retirement/ disposal of PPE and reclassification from one
category of asset to another.
(2) The carrying value of capital work-in-progress as of 30 September 2024
and 30 September 2023 mainly pertains to plant and equipment.
10. Goodwill
The following table presents the reconciliation of changes in the carrying
value of goodwill for the six months ended 30 September 2024 and 30 September
2023
Goodwill
Balance as of 1 April 2023 3,516
Foreign currency translation impact (527)
Balance as of 30 September 2023 2,989
Balance as of 1 April 2024 2,569
Foreign currency translation impact (38)
Balance as of 30 September 2024 2,531
11. Cash and bank balancess
Cash and cash equivalents As of
30 September 2024 31 March 2024
Balances with banks
- On current accounts 251 190
- Bank deposits with original maturity of three months or less 47 311
- On settlement account 6 2
Balance held in wallets 98 111
Remittance in transit 3 5
Cash on hand 1 1
406 620
Other bank balances
As of
30 September 2024 31 March 2024
-Term deposits with banks with original maturity of 31 344
more than three months but less than 12 months
-Margin money deposits ((1)) 9 9
-Unpaid dividend 0 0
40 353
(1) Margin money deposits represent amount given as collateral
for legal cases and/or bank guarantees for disputed matters.
For the purpose of the statement of cash flows, cash and cash equivalents are
as follows:
As of
30 September 2024 30 September 2023
Cash and cash equivalents as per statement of financial position 406 429
Balance held under mobile money trust 830 720
Bank overdraft (472) (414)
764 735
12. Share capital
As of
30 September 2024 31 March 2024
Issued, subscribed and fully paid-up shares (refer to note 4(d))
3,697,602,450 ordinary shares of $0.50 each 1,849 1,875
(March 2024: 3,750,761,649)
1,849 1,875
Terms/rights attached to equity shares
· Ordinary shares having par value of $0.50 per share. Each holder
of equity shares is entitled to cast one vote per share and carry a right to
dividends.
13. Borrowings
Non-current
As of
30 September 2024 31 March 2024
Secured
Term loans((1)) 171 124
171 124
Unsecured
Term loans((1)) 952 823
952 823
1,123 947
Current
As of
30 September 2024 31 March 2024
Secured
Term loans((1)) 66 15
66 15
Unsecured
Non- convertible bonds((1)(2)) - 550
Term loans((1)) 558 404
Bank overdraft 472 457
1,030 1,411
1,096 1,426
((1)) Includes debt origination costs.
((2)) It includes impact of fair value hedges.
14. Contingent liabilities and commitments
(i) Contingent liabilities
As of
30 September 2024 31 March 2024
(a) Taxes, duties and other demands (under adjudication / appeal / dispute)
-Income tax 20 13
-Value added tax 25 20
-Customs duty & Excise duty 8 9
-Other miscellaneous demands 10 7
(b) Claims under legal and regulatory cases including 79 76
arbitration matters
142 125
The increase of $17m in contingent liabilities during the six months ended 30
September 2024 is primarily on account of new demand on income tax, regulatory
cases and other taxes in some of the subsidiaries of the group.
Claims under legal and regulatory cases including arbitration matter
One of the subsidiaries of the Group is involved in a dispute with one of its
vendors, with respect to invoices for services provided to a subsidiary under
a service contract. The original order under the contract was issued by the
subsidiary for a total amount of Central African Franc (CFA) 473,800,000
(approximately $1m). After a dispute on the payable amount in 2014, the
vendor-initiated arbitration proceedings and was awarded CFA 1.9 billion
(approximately $3m) which was paid by bank. The vendor fraudulently claimed
not to have received the payment, and after multiple court proceeding from
2015 onwards and in mid-May 2019, the lower courts imposed a penalty of CFA 35
billion (approximately $58m), based on which certain banks of the subsidiary
were summoned to release the funds. The subsidiary immediately lodged an
appeal in the Supreme Court for a stay of execution which was granted.
Subsequently, the vendor filed an appeal before the Common Court of Justice
and Arbitration (CCJA). Quite unexpectedly, in April 2020, the CCJA lifted the
Supreme Court stay of execution. In May 2021, the Commercial Division of the
High Court maintained new seizures carried out by the vendor. 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
before the criminal chamber in the Court of Appeal where the honorable judge
has further re-examined the facts from the representatives of the subsidiary
against this case. A stay of execution was issued on 30 May 2022 by the
Chamber of Accusation in favour of subsidiary till the time criminal
investigation is completed. In October 2023, the criminal court ordered the
dismissal of the case despite evidence of initial payment provided to the
judge. The subsidiary has appealed to the Supreme Court, and a decision is
awaited.
The substantial appeal has been transferred to CCJA in February 2024, and all
Parties have filed their submissions. On 26 June 2024, the vendor filed their
last response at the CCJA. No further responses will be submitted by either
Party.
On 02 April 2024, Vendor notified the subsidiary with an injunction to pay CFA
54.7 billion (approximately $89m) which was not a court order, after which
multiple provisional enforcement measures were instituted against the
subsidiary in Apr 2024 including attachment of transferable securities and
negotiable instruments of Group entity, attachment for sale of movable assets
and attachment for sale of fixed assets. The subsidiary opposed the
attachments but the judge allowed their continuation, a decision which was
further appealed on 17 Jun 2024. No hearing date has been set.
Also on 12 June 2024, the subsidiary filed a request for a stay of execution
with the Supreme Court, pending the decision of the CCJA, which was declared
inadmissible on 5 July 2024.
The Group still awaits the decision from CCJA on the merits of the case, and
the outcome of the criminal investigations, and until that time has disclosed
this matter as Contingent Liability for $60m (included in the closing
contingent liability). No provision has been made against this claim.
In addition to the individual matters disclosed above, in the ordinary course
of business, the Group is a defendant or co-defendant in various litigations
and claims which are immaterial individually.
Guarantees:
Guarantees outstanding as of 30 September 2024 and 31 March 2024 amounting to
$12m and $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 and the
amounts with respect to these have been disclosed under capital commitments,
contingencies and liabilities, as applicable, in compliance with the
applicable accounting standards.
Commitments
Capital Commitments
The Group has contractual commitments towards capital expenditure (net of
related advances paid) of $314m and $317m as of 30 September 2024 and 31 March
2024 respectively.
15. Related Party disclosure
a) List of related parties
i) Parent company
Airtel Africa Mauritius Limited
ii) Intermediate parent entities
Network i2i Limited
Bharti Airtel Limited
Bharti Telecom Limited
iii) Ultimate controlling entity
Bharti Enterprises (Holding) Private Limited. It is held by private trusts of
Bharti family, with Mr. Sunil Bharti Mittal's family trust effectively
controlling the company.
iv) Associate:
Seychelles Cable Systems Company Limited
v) Joint Venture
Mawezi RDC S.A.
vi) Other entities with whom transactions have taken place during the
reporting period
a. Fellow subsidiaries
Nxtra Data Limited
Bharti Airtel Services Limited
Bharti International (Singapore) Pte Ltd
Bharti Airtel (UK) Limited
Bharti Airtel (France) SAS
Bharti Airtel Lanka (Private) Limited
Bharti Hexacom Limited
b. Other related parties
Singapore Telecommunication Limited
Bharti Global Limited
vii) Key Management Personnel ('KMP')
a. Executive directors
Olusegun Ogunsanya (till June 2024)
Sunil Taldar (w.e.f 01 July 2024)
Jaideep Paul
b. Non-Executive directors
Sunil Bharti Mittal
Awuneba Ajumogobia
Douglas Baillie (till October 2023)
John Danilovich (retired w.e.f. 3 July 2024)
Andrew James Green
Akhil Gupta
Shravin Bharti Mittal
Annika Poutiainen
Ravi Rajagopal
Kelly Bayer Rosmarin (till October 2023)
Tsega Gebreyes
Paul Thomas Arkwright (since May 2024)
c. Others
Ian Basil Ferrao
Michael Foley (till June 2023)
Razvan Ungureanu
Luc Serviant (till May 2023)
Daddy Mukadi Bujitu
Ramakrishna Lella
Edgard Maidou (till June 2023)
Rogany Ramiah
Stephen Nthenge
Anthony Shiner (since June 2024)
Apoorva Mehrotra
Oliver Fortuin (since June 2023)
Martin Frechette (since June 2023)
Carl Cruz (since May 2023)
Anwar Soussa (since August 2023)
Rohit Marwah (since April 2024)
Sunil Taldar (from October 2023 to June 2024)
Jacques Barkhuizen (since October 2023)
(b) The summary of significant transactions with the related parties for the
six months ended 30 September 2024 and 30 September 2023 respectively are
provided below:-
For the six months ended
30 September 2024 30 September 2023
Sales/rendering of services
Bharti Airtel (UK) Limited 38 42
Bharti Airtel Limited 1 5
Purchase/receiving of services
Bharti Airtel (France) SAS 8 9
Bharti Airtel (UK) Limited 15 19
Bharti Airtel Limited 5 6
Dividend paid
Bharti Airtel Mauritius Limited 75 69
(c) Key management compensation ('KMP')
KMP are those persons having authority and responsibility for planning,
directing and controlling the activities of the Group, directly or indirectly,
including any director, whether executive or otherwise. For the Group, these
include executive committee members. Remuneration to KMP were as follows:
For the six months ended
30 September 2024 30 September 2023
Short-term employee benefits 6 5
Performance linked incentive 2 2
Share-based payment 3 1
Other long term benefits 1 1
Other benefits 1 1
13 10
16. Fair Value of financial assets and liabilities
The details as to the carrying value, fair value and the level of fair value
measurement hierarchy of the group's financial instruments are as follows:
Carrying value as of Fair value as of
30 September 2024 31 March 2024 30 September 2024 31 March 2024
Financial assets
FVTPL
Derivatives
- Forward and option Level 2 2 10 2 10
contracts
Other bank balances Level 2 0 0 0 0
Investments Level 2 0 0 0 0
FVTOCI
Investments Level 2 1 2 1 2
Amortised cost
Trade receivables 192 184 192 184
Cash and cash equivalents 406 620 406 620
Other bank balances 40 353 40 353
Balance held under mobile money trust 830 737 830 737
Other financial assets 85 136 85 136
1,556 2,042 1,556 2,042
Financial liabilities
FVTPL
Derivatives
- Forward and option Level 2 6 22 6 22
contracts
- Cross currency swaps Level 3 62 155 62 155
- Embedded derivatives Level 2 0 0 0 0
Amortised cost
Long term borrowings - fixed rate Level 2 478 271 490 257
Long term borrowings - floating rate 645 676 645 676
Short term borrowings - fixed rate Level 1 - 550 - 549
Short term borrowings 1,096 876 1,096 876
Put option liability Level 3 539 552 539 552
Trade payables 425 422 425 422
Mobile money wallet balance 808 722 808 722
Other financial liabilities 491 586 491 586
4,550 4,832 4,562 4,817
The following methods/assumptions were used to estimate the fair values:
· The carrying value of bank deposits, trade receivables, trade
payables, balance held under mobile money trust, mobile money wallet balance,
short-term borrowings, other current financial assets and liabilities
approximate their fair value mainly due to the short-term maturities of these
instruments.
· Fair value of quoted financial instruments is based on quoted
market price at the reporting date.
· The fair value of non-current financial assets, long-term
borrowings and other financial liabilities is estimated by discounting future
cash flows using current rates applicable to instruments with similar terms,
currency, credit risk and remaining maturities.
· The fair values of derivatives are estimated by using pricing
models, wherein the inputs to those models are based on readily observable
market parameters. The valuation models used by the Group reflect the
contractual terms of the derivatives (including the period to maturity), and
market-based parameters such as interest rates, foreign exchange rates,
volatility etc. These models do not contain a high level of subjectivity as
the valuation techniques used do not require significant judgement and inputs
thereto are readily observable. For details pertaining to valuation of cross
currency swaps, please refer to level 3 details below.
· The fair value of the put option liability to buy back the stake
held by non-controlling interest in AMC BV is measured at the present value of
the redemption amount (i.e. expected cash outflows). Since, the liability will
be based on fair value of the equity shares of AMC BV (subject to a cap) at
the end of 48 months , the expected cash flows are estimated by determining
the projected equity valuation of the AMC BV at the end of 48 months expiring
in August 2025 and applying cap thereon.
During the six months ended 30 September 2024 and 31 March 2024 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 30 September 2024 and 31 March 2024:
Financial assets / liabilities Inputs used
- Currency swaps, forward and option contracts and other bank balances Forward foreign currency exchange rates, Interest rate
- Interest rate swaps Prevailing / forward interest rates in market, Interest rate
- Embedded derivatives Prevailing interest rates in market, inflation rates
- Other financial assets / fixed rate borrowing / other financial Prevailing interest rates in market, Future payouts, Interest rates
liabilities
Key inputs for level 3
The fair value of cross currency swap (CCS) has been estimated based on the
contractual terms of the CCS and parameters such as interest rates, foreign
exchange rates etc. Since the data from any observable markets in respect of
interest rates is not available, the interest rates are considered to be
significant unobservable inputs to the valuation of this CCS.
Reconciliation of fair value measurements categorised within level 3 of the
fair value hierarchy - Financial Assets/(Liabilities) (net)
• Cross Currency Swaps ('CCS')
For the six months ended
30 September 2024 30 September 2023
Opening Balance (155) (43)
Recognized in finance costs in profit and loss (unrealised) (38) (121)
Repayment of cross currency swap & interest 105 4
Foreign currency translation impact recognized in OCI 26 42
Closing Balance (62) (118)
• Put option liability
For the six months ended
30 September 2024 30 September 2023
Opening Balance 552 569
Liability de-recognized by crediting transaction with NCI reserve((1)) (15) (10)
Recognized in finance costs in profit and loss (unrealised) 2 3
Closing Balance 539 562
(1) Put option liability was reduced by $15m (30 September 2023 $10m) for
dividend distribution to put option NCI holders. Any dividend paid to the put
option NCI holders is adjustable against the put option liability based on put
option arrangement.
17. Events after the balance sheet date
No material subsequent events or transactions have occurred since the date of
statement of financial position except as disclosed below:
· The interim dividend of 2.60 cents per share was approved by the
Board on 24 October 2024 and has not been included as a liability as at 30
September 2024.
Appendix
Additional information pertaining to three months ended 30 September 2024
Condensed Consolidated Statement of Comprehensive Income
(All amounts are in US$ millions unless stated otherwise)
For three months ended
30 September 2024 30 September 2023
Income
Revenue 1,214 1,246
Other income 4 9
1,218 1,255
Expenses
Network operating expenses 232 223
Access charges 61 78
License fee and spectrum usage charges 65 60
Employee benefits expense 77 79
Sales and marketing expenses 161 149
Reversal of impairment loss on financial assets 1 1
Other expenses 57 45
Depreciation and amortisation 193 197
847 832
Operating profit 371 423
Finance costs
- Derivative and foreign exchange losses
Nigerian naira 109 34
Other currencies 15 50
- Other finance costs 147 115
Finance income (4) (9)
Share of profit for associate and joint venture accounted for using equity (0) (0)
method
Profit before tax 104 233
Tax expense 56 95
Profit for the period 48 138
Profit before tax (as presented above) 104 233
Add: Exceptional items (net) 109 -
Underlying profit before tax 213 233
Profit after tax (as presented above) 48 138
Add: Exceptional items (net) 71 -
Underlying profit after tax 119 138
Other comprehensive income ('OCI')
Items to be reclassified subsequently to profit or loss:
Loss due to foreign currency translation differences (8) (114)
Gain on debt instruments at fair value through other comprehensive income 0 -
Share of OCI of associate and joint venture accounted for using 0 (0)
equity method
Loss on cash flow hedges (0) -
Tax on above 1 0
(7) (114)
Items not to be reclassified subsequently to profit or loss:
Re-measurement loss on defined benefit plans (1) (1)
Tax on above 0 0
(1) (1)
Other comprehensive loss for the period (8) (115)
Total comprehensive income for the period 40 23
For three months ended
30 September 2024 30 September 2023
Profit for the period attributable to: 48 138
Owners of the company 24 115
Non-controlling interests 24 23
Other comprehensive loss for the period attributable to: (8) (115)
Owners of the company (5) (106)
Non-controlling interests (3) (9)
Total comprehensive income for the period attributable to: 40 23
Owners of the company 19 9
Non-controlling interests 21 14
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.
While the directors during the period have not changed any APMs, the Group
have amended their basis of classification of foreign exchange gains or losses
which is disclosed as exceptional. This change has been made to ensure that
only significant foreign exchange movements are classified as exceptional
which will better align with current foreign exchange movements in the market.
This change has been applied prospectively but had it been applied in the half
year ended 30 September 2023, an additional $52m of derivative and foreign
exchange losses relating to Nigeria would have been classified as exceptional
in the prior period. The only APMs impacted by the classification of foreign
exchange movements as exceptional include underlying profit/(loss) before tax,
effective tax rate, underlying profit/(loss) after tax, earnings per share
before exceptional items and earnings per share before exceptional items and
derivative and foreign exchange losses.
The following metrics are useful in evaluating the Group's operating
performance:
APM Closest equivalent IFRS measure Adjustments to reconcile to IFRS measure Definition and purpose
EBITDA and margin Operating profit · Depreciation and amortisation The Group defines EBITDA as operating profit/(loss) for the period before
depreciation and amortisation.
The Group defines EBITDA margin as EBITDA divided by revenue.
EBITDA and margin are measures used by the directors to assess the trading
performance of the business and are therefore the measure of segment profit
that the Group presents under IFRS. EBITDA and margin are also presented on a
consolidated basis because the directors believe it is important to consider
profitability on a basis consistent with that of the Group's operating
segments. When presented on a consolidated basis, EBITDA and margin are APMs.
Depreciation and amortisation is a non-cash item which fluctuates depending on
the timing of capital investment and useful economic life. Directors believe
that a measure which removes this volatility improves comparability of the
Group's results period on period and hence is adjusted to arrive at EBITDA and
margin.
Underlying profit / (loss) before tax Profit / (loss) before tax · Exceptional items The Group defines underlying profit/(loss) before tax as profit/(loss) before
tax adjusted for exceptional items.
The directors view underlying profit/(loss) before tax to be a meaningful
measure to analyse the Group's profitability.
Effective tax rate Reported tax rate · Exceptional items The Group defines effective tax rate as reported tax rate (reported tax charge
divided by reported profit before tax) adjusted for exceptional items, foreign
· Foreign exchange rate movements exchange rate movements and one-off tax items of prior period adjustment, tax
settlements and impact of permanent differences on tax.
· One-off tax impact of prior period, tax litigation settlement and
impact of tax on permanent differences This provides an indication of the current on-going tax rate across the Group.
Foreign exchange rate movements are specific items that are non-tax deductible
in a few of the entities which are loss making and/or where DTA is not yet
triggered and hence are considered to hinder comparison of the Group's
effective tax rate on a period-to-period basis and therefore excluded to
arrive at effective tax rate.
One-off tax impact on account of prior period adjustment, any tax litigation
settlement and tax impact on permanent differences are additional specific
items that because of their size and frequency in the results, are considered
to hinder comparison of the Group's effective tax rate on a period-to-period
basis.
Underlying profit/(loss) after tax Profit/(loss) for the period · Exceptional items The Group defines underlying profit/(loss) after tax as profit/(loss) for the
period adjusted for exceptional items.
The directors view underlying profit/(loss) after tax to be a meaningful
measure to analyse the Group's profitability.
Earnings per share before exceptional items EPS · Exceptional items The Group defines earnings per share before exceptional items as profit/(loss)
for the period before exceptional items attributable to owners of the company
divided by the weighted average number of ordinary shares in issue during the
financial period.
This measure reflects the earnings per share before exceptional items for each
share unit of the company.
Earnings per share before exceptional items and derivative and foreign EPS · Exceptional items The Group defines earnings per share before exceptional items and derivative
exchange losses
and foreign exchange losses as profit/(loss) for the period before exceptional
· Derivative and foreign exchange losses items and derivative and foreign exchange losses (net of tax) attributable to
owners of the company divided by the weighted average number of ordinary
shares in issue during the financial period.
This measure reflects the earnings per share before exceptional items and
derivative and foreign exchange losses for each share unit of the company.
Derivative and foreign exchange losses are due to revaluation of US dollar
balance sheet liabilities and derivatives as a result of currency devaluation.
Operating free cash flow Cash generated from operating activities · Income tax paid The Group defines operating free cash flow as net cash generated from
operating activities before income tax paid, changes in working capital, other
· Changes in working capital non-cash items, non-operating income, exceptional items, and after capital
expenditures. The Group views operating free cash flow as a key liquidity
· Other non-cash items measure, as it indicates the cash available to pay dividends, repay debt or
make further investments in the Group.
· Non-operating income
· Exceptional items
· Capital expenditures
Net debt and leverage ratio Borrowings The Group defines net debt as borrowings including lease liabilities less cash
and cash equivalents, term deposits with banks, deposits given against
· Lease liabilities borrowings/non-derivative financial instruments, processing costs related to
borrowings and fair value hedge adjustments.
· Cash and cash equivalent
The Group defines leverage ratio as net debt divided by EBITDA for the
· Term deposits with banks preceding 12 months.
· Deposits given against borrowings/ non-derivative financial instruments The directors view net debt and the leverage ratio to be meaningful measures
to monitor the Group's ability to cover its debt through its earnings.
· Fair value hedges
Return on capital employed No direct equivalent · Exceptional items to arrive at EBIT The Group defines return on capital employed ('ROCE') as EBIT divided by
average capital employed.
The directors view ROCE as a financial ratio that measures the Group's
profitability and the efficiency with which its capital is being utilised.
The Group defines EBIT as operating profit/(loss) for the period.
Capital employed is defined as sum of equity attributable to owners of the
company (grossed up for put option provided to minority shareholders to
provide them liquidity as part of the sale agreements executed with them
during year ended 31 March 2022), non-controlling interests and net debt.
Average capital employed is average of capital employed at the closing and
beginning of the relevant period.
For quarterly computations, ROCE is calculated by dividing EBIT for the
preceding 12 months by the average capital employed (being the average of the
capital employed averages for the preceding four quarters).
( )
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 2024 for all countries. Reported currency percentage
change is derived based on the average actual periodic exchange rates for that
financial period. Variances between constant currency and reported currency
percentages are due to exchange rate movements between the previous financial
reporting period and the current period. The constant currency numbers only
reflect the retranslation of reported numbers into exchange rates as of 31
March 2024 and are not intended to represent the wider impact that currency
changes have on the business.
Reconciliation between GAAP and Alternative Performance Measures
Table A: EBITDA and margin
Description Unit of measure Half year ended
September 2024 September 2023
Operating profit $m 706 885
Add:
Depreciation and amortisation $m 381 417
EBITDA $m 1,087 1,302
Revenue $m 2,370 2,623
EBITDA margin (%) % 45.8% 49.6%
Table B: Underlying profit / (loss) before tax
Description Unit of measure Half year ended
September 2024 September 2023
Profit before tax $m 178 12
Finance cost - exceptional items $m 231 471
Underlying profit before tax $m 409 483
Table C: Effective tax rate
Description Unit of measure Half year ended
September 2024 Sep
tem
ber
202
3
Profit before taxation Income tax expense Tax rate % Profit before taxation Income tax expense Tax rate %
Reported effective tax rate (after EI) $m 178 99 55.5% 12 25 207.7%
Exceptional items (provided below) $m 231 80 471 154
Reported effective tax rate (before EI) $m 409 179 43.7% 483 179 36.9%
Adjusted for:
Foreign exchange rate movement for loss making entity and/or non-DTA operating $m 13 - 46 -
companies & holding companies
One-off adjustment and tax on permanent differences $m - (9) - 28
Effective tax rate $m 422 170 40.3% 529 207 39.0%
a
Exceptional items
Derivative and foreign exchange rate losses $m 231 80 471 154 -
Total $m 231 80 471 154
Exceptional items
Derivative and foreign exchange rate losses
$m
231
80
471
154
-
Total
$m
231
80
471
154
a. $80m exceptional tax gain in half year period ended 30
September 2024 is tax gain corresponding to $231m derivative and foreign
exchange losses following Nigerian naira devaluation. In prior period, $154m
exceptional tax gain on derivative and foreign exchange losses of $471m was
also on account of Nigerian naira devaluation.
Table D: Underlying profit / (loss) after tax
Description Unit of measure Half year ended
September 2024 September 2023
Profit/(loss) after tax $m 79 (13)
Finance cost - exceptional items $m 231 471
Tax exceptional items $m (80) (154)
Underlying profit after tax $m 230 304
Table E: Earnings per share before exceptional items
Description Unit of Half year ended
measure
September 2024 September 2023
Profit/(loss) for the period attributable to owners of the company $m 31 (55)
Finance cost - exceptional items $m 231 471
Tax exceptional items $m (80) (154)
Non-controlling interest exceptional items $m (0) (0)
Profit for the period attributable to owners of the company- $m 182 262
before exceptional items
Weighted average number of ordinary shares in issue during the Million 3,727 3,751
financial period.
Earnings per share before exceptional items Cents 4.9 7.0
Table F: Earnings per share before exceptional items and derivative and
foreign exchange losses
Description UoM Half year ended
September 2024 September 2023
Profit/(loss) for the period attributable to owners of the company $m 31 (55)
Finance cost - exceptional items $m 231 471
Tax exceptional items $m (80) (154)
Non-controlling interest exceptional items $m (0) (0)
Profit for the period attributable to owners of the company- before $m 182 262
exceptional items
Derivative and foreign exchange losses (excluding exceptional items) $m 29 183
Tax on derivative and foreign exchange losses (excluding exceptional items) $m (5) (45)
Non-controlling interest on derivative and foreign exchange losses (excluding $m (6) (8)
exceptional items) - net of tax
Profit for the period attributable to owners of the company- before $m 200 392
exceptional items and derivative and foreign exchange losses
Weighted average number of ordinary shares in issue during the financial Million 3,727 3,751
period
Earnings per share before exceptional items and derivative and foreign Cents 5.4 10.5
exchange losses
Table G: Operating free cash flow
Description Unit of measure Half year ended
September 2024 September 2023
Net cash generated from operating activities $m 979 1,121
Add: Income tax paid $m 200 227
Net cash generation from operation before tax $m 1,179 1,348
Less: Changes in working capital
Increase in trade receivables $m 16 38
Increase in inventories $m 6 7
Increase in trade payables $m (17) (8)
Increase in mobile money wallet balance $m (89) (139)
Decrease in provisions $m 6 18
Increase in deferred revenue $m (4) (10)
Increase in other financial and non-financial liabilities $m (3) (24)
Increase in other financial and non-financial assets $m 0 71
Operating cash flow before changes in working capital $m 1,094 1,301
Other non-cash adjustments $m (7) 1
EBITDA $m 1,087 1,302
Less: Capital expenditure $m (316) (312)
Operating free cash flow $m 771 990
Table H: Net debt and leverage
Description Unit of measure As at As at As at
September 2024 March 2024 September 2023
Long term borrowing, net of current portion $m 1,123 947 933
Short-term borrowings and current portion of long-term borrowing $m 1,096 1,426 1,371
Add: Processing costs related to borrowings $m 10 8 7
Less: Fair value hedge adjustment $m - (1) (3)
Less: Cash and cash equivalents $m (406) (620) (429)
Less: Term deposits with banks $m (31) (344) (357)
Add: Lease liabilities $m 3,363 2,089 1,805
Net debt $m 5,155 3,505 3,327
EBITDA (LTM) $m 2,213 2,428 2,621
Leverage (LTM) times 2.3 1.4 1.3
Table I: Return on capital employed
Description Unit of Year ended
measure
September 2024 September 2023
Operating profit (LTM) $m 1,461 1,770
Equity attributable to owners of the Company $m 2,028 2,809
Add: Put option given to minority shareholders (1) $m 539 562
Gross equity attributable to owners of the Company (1) $m 2,567 3,371
Non-controlling interests (NCI) $m 142 168
Net debt (refer Table H) $m 5,155 3,327
Capital employed $m 7,864 6,867
Average capital employed (1) $m 7,365 7,155
Return on capital employed % 19.8% 24.7%
((1)) Average capital employed is calculated as average of capital employed at
closing and opening of relevant period.
Independent review report to Airtel Africa plc
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2024 which comprises the interim condensed consolidated statement of
comprehensive income, the interim condensed consolidated statement of
financial position, the interim condensed consolidated statement of changes in
equity, the interim condensed consolidated statement of cash flows and related
notes 1 to 17.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2024 is not prepared,
in all material respects, in accordance with United Kingdom adopted
International Accounting Standard 34 and the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our Conclusion, including our
Conclusion Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
Birmingham, United Kingdom
24 October 2024
Statement of Director's Responsibilities
We confirm that to the best of our knowledge:
a) The condensed set of financial statements has been prepared in
accordance with UK-adopted IAS 34 'Interim Financial Reporting';
b) The interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events and their
impact during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
c) The interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
This responsibility statement was approved by the board of directors on 24
October 2024 and is signed on its behalf by:
Sunil Taldar
Chief Executive Officer
24 October 2024
Glossary
Technical and Industry Terms
4G data customer A customer having a 4G handset and who has used at least 1 MB on any of the
Group's GPRS, 3G and 4G network in the last 30 days.
Airtel Money (mobile money) Airtel Money is the brand name for Airtel Africa's mobile money products and
services. The term is used interchangeably with 'mobile money' when referring
to our mobile money business, finance, operations and activities.
Airtel Money ARPU Mobile money average revenue per user per month. This is derived by dividing
total mobile money revenue during the relevant period by the average number of
active mobile money customers and dividing the result by the number of months
in the relevant period.
Airtel Money customer base Total number of active subscribers who have enacted any mobile money usage
event in last 30 days.
Airtel Money customer penetration The proportion of total Airtel Africa active mobile customers who use mobile
money services. Calculated by dividing the mobile money customer base by the
Group's total customer base.
Airtel Money transaction value Any financial transaction performed on Airtel Africa's mobile money platform.
Airtel Money transaction value per customer per month Calculated by dividing the total mobile money transaction value on the Group's
mobile money platform during the relevant period by the average number of
active mobile money customers and dividing the result by the number of months
in the relevant period.
Airtime credit service A value-added service where the customer can take an airtime credit and
continue to use our voice and data services, with the credit recovered through
subsequent customer recharge. This is classified as a Mobile Services product
(not a Mobile Money product).
ARPU Average revenue per user per month. This is derived by dividing total revenue
during the relevant period by the average number of customers during the
period and dividing the result by the number of months in the relevant period.
Average customers The average number of active customers for a period. Derived from the monthly
averages during the relevant period. Monthly averages are calculated using the
number of active customers at the beginning and the end of each month.
Capital expenditure An alternative performance measure (non-GAAP). Defined as investment in gross
fixed assets (both tangible and intangible but excluding spectrum and
licences) plus capital work in progress (CWIP), excluding provisions on CWIP
for the period.
Constant currency The Group has presented certain financial information that is calculated by
translating the results at a fixed 'constant currency' exchange rate, which is
done to measure the organic performance of the Group and represents the
performance of the business in a better way. Constant currency amounts and
growth rates are calculated using closing exchange rates as of 31 March 2024
for all reporting regions and service segments.
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 usage charges (IUC) Interconnect usage charges are the charges paid to the telecom operator on
whose network a call is terminated.
Lease liability Lease liability represents the present value of future lease payment
obligations.
Leverage An alternative performance measure (non-GAAP). Leverage (or leverage ratio) is
calculated by dividing net debt at the end of the relevant period by the
EBITDA for the preceding 12 months.
Market Debt Market debt is defined as Borrowings from Banks or Financial Institutions and
debt capital market issuances in the form of Bonds.
Minutes of usage Minutes of usage refer to the duration in minutes for which customers use the
Group's network for making and receiving voice calls. It includes all incoming
and outgoing call minutes, including roaming calls.
Mobile services Mobile services are our core telecom services, mainly voice and data services,
but also including revenue from tower operation services provided by the Group
and excluding mobile money services.
Net debt An alternative performance measure (non-GAAP). The Group defines net debt as
borrowings including lease liabilities less cash and cash equivalents, term
deposits with banks, processing costs related to borrowings and fair value
hedge adjustments.
Net debt to EBITDA (LTM) An alternative performance measure (non-GAAP) Calculated by dividing net debt
as at the end of the relevant period by EBITDA for the preceding 12 months
(from the end of the relevant period). This is also referred to as the
leverage ratio.
Network towers or 'sites' Physical network infrastructure comprising a base transmission system (BTS)
which holds the radio transceivers (TRXs) that define a cell and coordinates
the radio link protocols with the mobile device. It includes all ground-based,
roof top and in-building solutions.
Operating company (OpCo) Operating company (or OpCo) is a defined corporate business unit, providing
telecoms services and mobile money services in the Group's footprint.
Operating free cash flow An alternative performance measure (non-GAAP). Calculated by subtracting
capital expenditure from EBITDA.
Operating leverage An alternative performance measure (non-GAAP). Operating leverage is a measure
of the operating efficiency of the business. It is calculated by dividing
operating expenditure (excluding regulatory charges) by total revenue.
Operating profit Operating profit is a GAAP measure of profitability. Calculated as revenue
less operating expenditure (including depreciation and amortisation and
operating exceptional items).
Other revenue Other revenue includes revenues from messaging, value added services (VAS),
enterprise, site sharing and handset sale revenue.
Reported currency Our reported currency is US dollars. Accordingly, actual periodic exchange
rates are used to translate the local currency financial statements of OpCos
into US dollars. Under reported currency the assets and liabilities are
translated into US dollars at the exchange rates prevailing at the reporting
date whereas the statements of profit and loss are translated into US dollars
at monthly average exchange rates.
Smartphone A smartphone is defined as a mobile phone with an interactive touch screen
that allows the user to access the internet and additional data applications,
providing additional functionality to that of a basic feature phone which is
used only for making voice calls and sending and receiving text messages.
Smartphone penetration Calculated by dividing the number of smartphone devices in use by the total
number of customers.
Total MBs on network Includes total MBs consumed (uploaded and downloaded) on the network during
the relevant period.
EBIT Defined as operating profit/(loss) for the period adjusted for exceptional
items.
EBITDA An alternative performance measure (non-GAAP). Defined as operating profit
before depreciation, amortisation and exceptional items.
EBITDA margin An alternative performance measure (non-GAAP). Calculated by dividing EBITDA
for the relevant period by revenue for the relevant period.
Unstructured Supplementary Service Data Unstructured Supplementary Service Data (USSD), also known as "quick codes" or
"feature codes", is a communications protocol for GSM mobile operators,
similar to SMS messaging. It has a variety of uses such as WAP browsing,
prepaid callback services, mobile-money services, location-based content
services, menu-based information services, and for configuring phones on the
network.
Voice minutes of usage per customer per month Calculated by dividing the total number of voice minutes of usage on the
Group's network during the relevant period by the average number of customers
and dividing the result by the number of months in the relevant period.
Weighted average number of shares The weighted average number of shares is calculated by multiplying the number
of outstanding shares by the portion of the reporting period those shares
covered, doing this for each portion and then summing the total.
Abbreviations
2G Second-generation mobile technology
3G Third-generation mobile technology
4G Fourth-generation mobile technology
5G Fifth-generation mobile technology
ARPU Average revenue per user
bn Billion
bps Basis points
CAGR Compound annual growth rate
Capex Capital expenditure
CBN Central Bank of Nigeria
CSR Corporate social responsibility
DTA Deferred Tax Asset
EBIT Earnings before interest and tax
EBITDA Earnings before interest, tax, depreciation and amortisation
EPS Earnings per share
FPPP Financial position and prospects procedures
GAAP Generally accepted accounting principles
GB Gigabyte
HoldCo Holding company
IAS International accounting standards
ICT Information and communication technologies
ICT (Hub) Information communication technology (Hub) IFRS
IFRS International financial reporting standards
IMF International monetary fund
IPO Initial public offering
KPIs Key performance indicators
KYC Know your customer
LTE Long-term evolution (4G technology)
LTM Last 12 months
m Million
MB Megabyte
MI Minority interest (non-controlling interest)
NGO Non-governmental organisation
OpCo Operating company
P2P Person to person
PAYG Pay-as-you-go
QoS Quality of service
RAN Radio access network
SIM Subscriber identification module
Single RAN Single radio access network
SMS Short messaging service
TB Terabyte
Telecoms Telecommunications
Unit of measure Unit of measure
USSD Unstructured supplementary service data
1 For future sensitivity on currency devaluation, refer to the Risk section
on page 20
2 Alternative performance measures (APM) are described on page 46
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