Mobile money subscriber growth of 14.9% reflects Airtel Africa’s support to increase of financial inclusion across its markets

* Transaction value increased by 28.7% in constant currency with annualised transaction value of US$120bn in reported currency

* Total customer base grew by 8.6% to 155.4 million with data customer penetration continuing to rise, driving a 13.4% increase in data customers to 64.4 million

* Revenue in constant currency grew by 19.0% in Q1’25, driven by 33.4% growth in Nigeria and 22.3% growth in East Africa, respectively

By Duncan Mlanjira

From its results for financial quarter ended June 30, Airtel Africa reports that a mobile money subscriber growth of 14.9%, saying this reflects its continued investment into distribution to support increased financial inclusion across its markets.

The leading provider of telecommunications and mobile money services, with a presence in 14 countries in Africa, primarily in East Central and West Africa, also reports that mobile money transaction value increased by 28.7% in constant currency with annualised transaction value of US$120 billion in reported currency.

The multinational also reports that total customer base grew by 8.6% to 155.4 million and that data customer penetration continues to rise — driving a 13.4% increase in data customers to 64.4 million.

Data usage per customer increased by 25.1% to 6.2 GBs, with smartphone penetration increasing 4.7% to reach 41.7%.

There is also reports that data ARPU growth of 9.6% and mobile money ARPU growth of 8.8% in constant currency continued to support overall ARPU’s which increased 9.3% YoY.

“Customer experience remains core to our strategy with sustained network investment driving increased capacity and coverage,” says the report issued on Friday. “Data capacity across our network has increased by 33% with the rollout of almost 3,000 sites and over 5,600kms of fibre.

“We launched a comprehensive cost efficiency programme to identify specific cost reduction initiatives across the Group. Steps taken include the optimisation of network utilisation and design, introducing energy saving initiatives to reduce network costs and the renegotiation of key contracts, whilst ensuring future growth ambitions remain protected.

“We anticipate the full benefit of this programme to accrue over the year ahead, says the company, whose revenue in constant currency grew by 19.0% in Q1’25, driven by 33.4% growth in Nigeria and 22.3% growth in East Africa, respectively.

“Reported currency revenues declined by 16.1% to US$1,156 million reflecting the impact of currency devaluation, particularly in Nigeria.”

Airtel Africa further reports that across the Group, mobile services revenue grew by 17.4% and mobile money revenue grew by 28.4% in constant currency while a substantial increase in fuel prices across its markets and the lower contribution of Nigeria to the Group — after the naira devaluation — contributed to a decline in EBITDA margins to 45.3% from 49.5% in Q1’24 and 46.5% in Q4’24.

“However, constant currency EBITDA increased 11.3% whilst reported currency EBITDA declined by 23.3% to US$523 million.

“Profit after tax of US$31 million was impacted by US$80 million of exceptional derivative and foreign exchange losses (net of tax), arising from the further depreciation in the Nigerian naira during the quarter.

“The translation impact of currency devaluation on reported currency results was the primary driver of EPS before exceptional items declining from 3.9 cents in the prior period to 2.3 cents.

“Basic EPS of 0.2 cents compares to negative (4.5 cents) in the prior period, predominantly reflecting the US$471 million of exceptional derivative and foreign exchange losses in the prior period, compared to US$122 million in the current period.”

On capital allocation, Airtel Africa reports that capex at US$147 million was 4.9% higher compared to prior period while capex guidance for the full year remains between US$725 million and US$750 million as the company continues to invest for future growth.

“In line with our plan, we now have zero HoldCo debt following the full repayment of the US$550 million bond in May 2024. In total, 86% of our market debt is now in local currency, having paid down US$828 million of foreign currency debt over the last year.

“Leverage of 1.6x on 30 June 2024 compares to 1.3x in the prior period. Of the 0.3x increase, 0.2x was due to the decrease in reported currency EBITDA, with the balance due to an increase in lease liabilities.

“The US$100 million share buyback continues, with 21 million shares purchased for a consideration of US$29 million as at the end of June 2024.”

Airtel Africa’s chief executive officer, Sunil Taldar is quoted in the statement as saying: “The continued revenue growth momentum once again reflects the resilient demand for our services, with sustained growth in our customer base and usage.

“Our superior execution enables us to capture these opportunities, whilst retaining our reputation as a cost leader across the industry.

“Having visited most of our OpCos since I joined Airtel Africa, I am encouraged by the scale of the opportunity available across our markets in both the GSM and mobile money business.

“A key priority for us is to look for new opportunities to further grow our business especially in the enterprise, fibre and data centre businesses across our footprint in Africa.

“We will build on the strong foundation established over many years to deliver on these new business opportunities. Most importantly, our emphasis is on significantly improving customer experience by simplifying customer journeys and providing best in class network experience to our customers, whilst remaining focused on driving efficiencies across the business.

“We have initiated a comprehensive cost optimisation programme across the Group. We have already seen success in this project, with savings arising in network and distribution costs, and continued opportunities as contract renegotiations continue.

“We expect sustainable savings to continue as the year progresses. A strong capital structure is critical to enabling these ambitions and future proofing our ambitious growth targets.

“During the quarter, we fully repaid the outstanding debt due at the HoldCo and we remain committed to further reduce foreign currency exposure across the Group to limit the impact of currency devaluation on our business.

“The growth opportunity across our markets remains compelling and we continue to focus on margin improvement as indicated in our FY’24 results.”