Investor Presentaiton
Net finance costs
Net finance costs increased by $54m, as a result of $51m higher foreign exchange and derivative losses and $6m higher interest on
lease obligations, partially offset by lower interest costs due to a reduction in debt (including $505m bonds repurchased in March
2022).
The Group's effective interest rate increased to 5.6% compared to 5.0% in the prior period, largely driven by the repayment of $935m
of HoldCo debt, which carried a lower-than-average coupon, and due to higher local currency debt at the OpCo level.
Taxation
Total tax charges were $98m, a reduction of $19m, due to the initial recognition of a deferred tax credit of $21m in Kenya. Excluding
exceptional items, tax was higher by $2m due to higher operating profit and withholding tax on dividends by subsidiaries.
Profit after tax
Profit after tax increased by 25.3% to $178m, mainly led by higher operating profits which more than offset the foreign exchange and
derivative losses. Additionally, the current quarter benefited from the initial recognition of a deferred tax credit of $21m in Kenya.
Basic EPS
Basic EPS improved to 4.4 cents, an improvement of 1.1 cents (+31.0%) from 3.3 cents in the prior period. This increase was mainly due
to higher operating profits and the recognition of a deferred tax credit of $21m in Kenya this quarter, which more than offset foreign
exchange and derivative losses.
Net cash generated from operating activities
Net cash generated from operating activities was $388m, 13.2% lower than the $447m of the prior period. This was largely due to
higher cash tax payments as a result of higher dividend tax on declared dividend and increased taxable profits, partially offset by higher
profit before tax.
Alternative performance measures¹
EBITDA
EBITDA increased to $614m, up by 14.9% in reported currency, and by 16.5% in constant currency. Growth in EBITDA was led by
revenue growth and supported by continued improvement in operating efficiencies which more than offset inflationary cost pressures.
The EBITDA margin improved by 78 basis points in reported currency to 48.8%.
Foreign exchange had an adverse impact of $23m on revenue, and $8m on EBITDA, as a result of currency devaluations, mainly in the
Central African franc (13.2%), the Nigerian naira (1.8%), the Kenyan shilling (8.0%) and the Malawian kwacha (11.2%), in turn partially
offset by appreciation in the Zambian kwacha (23.4%).
With respect to currency devaluation sensitivity, on a 12-month basis, a 1% currency devaluation across all currencies in our OpCos
would have a negative impact of $45m on revenues, $27m on EBITDA and $19m on finance costs. Our largest exposure is to the Nigerian
naira, for which a 1% devaluation would have a negative impact of $19m on revenues, $11m on EBITDA and $7m on finance costs.
Tax
The effective tax rate was 39.9%, compared to 39.1% in the prior period, largely due to profit mix changes amongst the OpCos and the
impact of withholding taxes on dividends. The effective tax rate is higher than the weighted average statutory corporate tax rate of
approximately 33%, largely due to the profit mix between various OpCos and withholding taxes on dividends by subsidiaries.
Exceptional items
Non-operating exceptional items in the previous period relate to a gain of $4m from the profit on the sale of towers in Rwanda. Tax
exceptional items this quarter benefited from the initial recognition of a deferred tax credit of $21m in Kenya.
EPS before exceptional items
EPS before exceptional items increased to 3.8 cents, up by 18.3% from 3.2 cents in the prior period. This increase was mainly due to
higher operating profits which more than offset foreign exchange and derivative losses.
1 Alternative performance measures (APM) are described on page 15.
5View entire presentation