9-month period revenue growth for Airtel Africa Plc at US$3,492m representing 21.7%

* The highlights of the report include constant currency underlying revenue growth that was recorded across all regions

* Nigeria up 29.0%, East Africa up 24.4% and Francophone Africa up 19.0% and across all key services

* Revenue in Voice up 16.1%, and in Data and Mobile Money both up 37.2%

By Duncan Mlanjira

Airtel Africa Plc’s results for nine-month period that ended December 31, 2021 indicates that revenue grew to US$3,492 million — representing 21.7% growth while constant currency underlying revenue grew by 24.8%.

This is contained in Airtel Africa’s financial report released on February 4 that indicates that the “strong growth across all key metrics, with Nigeria PSB approval is in principle set to unlock further mobile money opportunity”.

The highlights of the report include constant currency underlying revenue growth that was recorded across all regions — Nigeria up 29.0%, East Africa up 24.4% and Francophone Africa up 19.0% — and across all key services, with revenue in Voice up 16.1%, and in Data and Mobile Money both up 37.2%.

Underlying EBITDA was US$1,703m, growing by 31.3% in reported currency with an EBITDA margin of 48.8%, an increase of 326 basis points led by both revenue growth and improved operational efficiencies.

Operating profit grew by 43.1% to US$1,146m in reported currency with profit after tax almost doubling to US$514m as higher profit before tax more than offset associated tax charges.

Basic EPS was 11.7 cents, an increase of 113.8%, largely as a result of higher profit. EPS before exceptional items increased to 11.5 cents, up from 5.0 cents in the previous period.

Operating free cash flow grew by 42.2% to US$1,271m and net cash generated from operating activities was up 23.1% to US$1,499m.

Leverage ratio improved to 1.4x from 2.1x in the previous period while the customer base expanded to 125.8 million, growing by 5.8%, with increased penetration across mobile data (customer base up 11.1%) and mobile money services (customer base up 19.6%).

Customer base growth was affected by the NIN/SIM regulations in Nigeria but returned to growth in this region in the third quarter; excluding Nigeria the customer base grew by 12.0%.

In his statement on the trading update, Airtel Africa Plc chief executive officer Segun Ogunsanya a “strong third quarter has contributed to a pleasing nine-month financial performance across all key metrics.

“Operationally, we have continued to execute on our network and distribution expansion plans, driving continued strong growth in ARPUs across voice, data and mobile money.

“We have also seen further improvement in our customer growth trends for the Group with Nigeria returning to strong customer growth after a period affected by the implementation of new ‘know your customer’ requirements, posting 1.9 million net additions in the third quarter, taking total Group customer additions to 3.1 million.

“I am particularly pleased with developments in Nigeria, where in November we received approval in principle for both a payment service bank (mobile money) licence and a super-agent licence.

“We are now working closely with the Central Bank to meet all its conditions to receive the final operating licences and commence operations. This will enable us to expand our digital financial products and reach the millions of Nigerians that do not have access to traditional financial services.

“We continued to strengthen our balance sheet, with our leverage ratio now 1.4 times underlying EBITDA, thanks both to continued increases in operating cash flow delivery and to over $550m of cash that has now been received from minority investments into our mobile money business.

“We will continue to invest in expanding and evolving our platform to further deepen both financial and digital inclusion across Africa. I continue to see huge growth potential across voice, data and mobile money and our strategy is delivering against this opportunity.

“Our sustained investments in both network and distribution expansion will help to ensure that both the communities and economies across our footprint will continue to benefit from increased and affordable connectivity and financial inclusion.”

In his conclusion, Ogunsanya said Airtel Africa is “committed to continue to improve the delivery of our services to our customers, with sustainability at the heart of our continued purpose to transform lives across 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.

It aims to continue providing a simple and intuitive customer experience through streamlined customer journeys.

The financial report indicated that during the period, foreign exchange had an adverse impact of $47m on revenue and $23m on underlying EBITDA, as a result of devaluation of the Nigerian naira and the Malawian kwacha, in turn partially offset by appreciation in the Ugandan shilling, the Zambian kwacha and the Central African franc.

In October 2021, Airtel Africa launched an ambitious sustainability strategy that underpins its well-established corporate purpose of ‘Transforming Lives.’

The strategy demonstrates our commitment to developing the infrastructure and services that will drive both digital and financial inclusion for people across Africa and provides a framework to contribute to six of the United Nations’ Sustainable Development Goals (‘SDGs’) where the company believes can have the biggest impact.

These are SDG 4: Delivering quality education; SDG 5: Gender equality; SDG 8: Decent work and economic growth; SDG 9: Industry innovation and infrastructure; SDG 10: Reduced inequalities; and SDG 12: Responsible consumption and production.

The launch of the sustainability strategy builds upon the Group’s sustainability framework, announced with the FY’21 results, with its four key pillars of ‘Our business’, ‘Our people’, ‘Our communities’ and ‘Our environment’, and the strong foundations of the work already being done at a Group level and across all our local operations.

On 1 November 2021, Airtel Africa and UNICEF announced a five-year pan-African partnership to help accelerate the roll-out of digital learning through connecting schools to the internet and ensuring free access to learning platforms across 13 countries.

By providing equal access to quality digital learning, particularly for the most vulnerable children, the partnership will help to ensure that every child reaches their full potential.

Airtel Africa is the first African private sector partner to make a multimillion-dollar commitment to ‘Reimagine Education’, a global initiative launched by UNICEF in 2020 calling for public and private sector investment in digital learning as an essential service for every child and young person across the globe.

This initiative aims to give children a chance to catch up on their learning needs amid the ongoing global pandemic.

Airtel Africa’s financial and in-kind contribution for this partnership is $57m over five years to 2027. The programme will call on technology and expertise, in addition to direct financial support to connect schools and communities to the internet and enable free access to online educational content for students.

It will also provide vital data insights to inform UNICEF’s work to scale-up digital learning and help ensure it is sustainable and meets students’ needs across Africa.

The Airtel Africa and UNICEF pan-African partnership will benefit students in Chad, Congo, Democratic Republic of the Congo, Gabon, Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Tanzania, Uganda and Zambia.

The CoVID-19 pandemic contributed to a rapid acceleration of already existing macro trends across the countries where the Group operates, with people, businesses and governments seeking access to more and better connectivity and improved financial inclusion.

These challenging times have shown that the telecoms industry is a key and essential service for these economies, allowing customers to work remotely, reduce their travel, keep connected and have access to affordable entertainment and financial services.

The report further says CoVID-19 presented significant challenges to the business, particularly during the initial phase of the pandemic in Q1 last year, when mobile money and mobile services growth both slowed.

“However, the actions taken by the Board at that time enabled the continued execution of our strategy, including meeting increased customer demand for data, mobile money and mobile services.

“Through multiple lockdowns and during times of national crisis our people have kept our distribution channels available and our networks fully operational.

“Our business partners have similarly continued to deliver their services despite numerous logistical challenges, and governments and regulators have continued to support the industry and helped facilitate our continued support to the economies of the countries and the communities we serve.

“Several times through the pandemic, the governments in the countries where we operate have acted swiftly to implement and enforce restrictions on the movement of people to prevent contagion. These swift actions, along with low population density and relatively youthful population demographics, less frequent travel, and local experience in dealing with contagious diseases, have resulted in generally lower infection rates in sub-Saharan Africa relative to some other regions.

“Around the world the vaccination effort is well under way, with a significant easing of social distancing rules and travel restrictions, although Africa lags most developed economies in attaining full vaccination cover.

“Despite the resilience demonstrated by our business during the last two years, we are constantly monitoring how the situation is evolving to identify key risks and to put in place adequate mitigation plans to minimise any potential disruptions.”