Investor Presentaiton
Financial review for the quarter ended 30 June 2022
Revenue in reported currency grew by 13.0%. This overall growth is slightly slower than recent trends due to some specific challenges
this quarter largely as a result of the effect of voice customers barred in Nigeria and the loss of tower sharing revenues following the
recent sales of towers in Tanzania, Madagascar and Malawi. Revenue in constant currency grew by 15.3% for the Group. Excluding
these specific challenges growth for the quarter would have been around 19% in constant currency terms.
Owing to significant growth in mobile money business and corresponding changes in the organization structure, combined with
changes in the information provided to the Group CEO (Chief Operating Decision Maker) for the allocation of resources and the
assessment of performance; with effect from April 2022, the Group has identified mobile money as a new operating and reportable
segment. Thus, the Group now reports segmental performance for mobile services in Nigeria, East Africa and Francophone Africa, and
for mobile money. The consolidated regional performance, comprising both mobile services and mobile money, for each of Nigeria,
East Africa and Francophone Africa is provided on page 13 to help with reconciliation to historical segmental reporting.
Double digit revenue growth was posted across all reporting segments: with mobile services revenue in Nigeria up 18.3%, East Africa
up 11.1% and Francophone Africa up 10.6% (with overall mobile services growing by 14.2%, with voice revenue growth of 11.3% and
data revenue growth of 19.8%; and with growth of other revenues of 10.4%, marginally impacted by the c.$7m tower sharing revenues
lost through tower sales). Mobile money revenue grew by 26.5% in constant currency, driven by growth of 26.9% in East Africa and
25.4% in Francophone Africa.
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 debt reduction (including the repayment of $505m bonds in March
2022).
Total tax charges were $19m lower mainly due to the initial recognition of a deferred tax credit of $21m in Kenya. Basic EPS improved
to 4.4 cents, while EPS before exceptional items improved to 3.8 cents. The increase in basic EPS was mainly due to higher operating
profits and the initial recognition of a deferred tax credit of $21m in Kenya, which more than offset foreign exchange and derivative
losses.
Leverage improved to 1.3x from 1.8x in the prior period, largely driven by increased cash generation, the expansion of EBITDA and
proceeds from Airtel Money investments. Our balance sheet has also been further de-risked by continued localisation of our debt into
the OpCos and material debt reduction in HoldCo. Following the post period end prepayment of $450m bonds in July 2022, the
remaining debt at HoldCo is now $550m.
GAAP measures
Revenue
Reported revenue increased to $1,257m, growing by 13.0% in reported currency, and by 15.3% in constant currency driven by both
customer base growth of 8.9% and ARPU growth of 5.4%. The constant currency growth was partially offset by average currency
devaluations between the periods, 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%).
Mobile services revenue grew by 14.2% in constant currency, supported by growth of 18.3% in Nigeria, 11.1% in East Africa and 10.6%
in Francophone Africa. Mobile money revenue grew by 26.5% in constant currency, driven by revenue growth in East Africa of 26.9%
and Francophone Africa of 25.4%.
Revenue growth for the quarter was impacted by the effect of barring outgoing calls in Nigeria for those customers who had not
submitted their National Identity Numbers ('NINs'). A total of 13.6 million customers were originally barred, out of which 5.3 million
customers (39%) have subsequently submitted their NINs and 2.3 million customers (17%) have been fully verified and unbarred. We
estimate that this resulted in the loss of approximately $34m of revenues in the quarter, providing a drag on revenue growth of almost
3% at Group level (impact of 7.5% in Nigeria). The growth in other revenues was also impacted by c.$7m of tower sharing revenues
lost through associated tower sales.
Operating profit
Operating profit increased by 20.6% to $425m as a result of revenue growth and modest improvements in operating efficiency in East
Africa and Francophone Africa.
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