Airtel Africa reported a growth of 20.4 per cent in revenue in constant currency, with reported currency revenues up by 9.6 per cent to $1.38 billion. While each segment’s reported currency revenue growth was impacted by currency devaluation, they all delivered double-digit constant currency revenue growth. Across the group, mobile service revenue grew by 19.1 per cent in constant currency, driven by voice revenue growth of 11.9 per cent and data revenue growth of 29.8 per cent. Mobile money revenue grew by 31.2 per cent in constant currency.
Meanwhile, earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 22.5 per cent in constant currency, and 11.1 per cent in reported currency to $682 million, with an EBITDA margin of 49.5 per cent, reflecting a 69bps margin improvement despite inflationary cost pressures. Profit after tax was negative ($151 million) driven largely by a foreign exchange loss of $471 million recorded in finance cost before tax and $317 million after tax because of the devaluation of the Nigerian naira in the month of June 2023. This impact has been classified as a non-operating exceptional item. Earnings per share (EPS) before exceptional items was 3.9 cents, an improvement of 3.3 per cent. EPS before exceptional items and excluding foreign exchange and derivative losses was 6.0 cents, up by 16.2 per cent. Basic EPS at negative (4.5 cents) compared to 4.4 cents in the prior period, impacted by $317 million net exceptional loss on account of naira devaluation in the month of June 2023.
Further, capex at $140 million stood flat compared to the prior period as the company continues to invest for future growth. In July 2022, the group prepaid $450 million of outstanding external debt at HoldCo. The remaining debt at HoldCo is now $550 million, falling due in May 2024. Cash at the holding companies was $505 million at the end of the period. Leverage of 1.3x in June 2023, was broadly stable despite over $500 million of spectrum investment in the last fiscal year and the renewal of 2100 MHz spectrum licence in Nigeria in the period.
During QE June 2023, the total customer base of the company grew by 8.8 per cent to 143.1 million, as the penetration of mobile data and mobile money services continued to rise, driving a 22 per cent increase in data customers to 56.8 million and a 24.3 per cent increase in mobile money customers to 34.3 million. Constant currency average revenue per user (ARPU) growth of 11.1 per cent was largely driven by increased usage across voice, data and mobile money. Mobile money transaction value increased by 47.2 per cent in constant currency, with Q1’24 annualised transaction value of $107 billion in reported currency.
Commenting on the results, Segun Ogunsanya, chief executive officer, Airtel Africa, said, “The group delivered a strong operating performance with improvement in both constant currency revenue growth and EBITDA margin despite the challenging macro environment. The acceleration in voice, data and mobile money revenue growth is testament to the success of our six-pillar ‘win-with’ strategy. Our continuing investment in network and distribution enabled us to expand our customer base further, driving increased usage on our network. This strong momentum is supported by a continued focus on cost efficiencies, which enabled us to expand our EBITDA margins in the quarter. Despite the strong operating performance, our results have been impacted by foreign exchange headwinds. This quar-ter saw the announcement of the change to the FX market in Nigeria which resulted in a significant naira devaluation. We have welcomed this reform as very positive for the medium and long-term development of our business in Nigeria, our largest market. The country offers significant untapped growth potential, underpinned by highly attractive funda-mentals. This has supported and sustained a strong operating performance which has seen a five-year revenue and EBITDA compound annual growth rate (CAGR) of 23.5 per cent and 27.3 per cent in constant currency, respectively.”
Ogunsanya added, “We expect the FX reforms to improve liquidity over time, thereby alleviating the challenges faced by international businesses over the last few years associated with accessing US dollars and thus hindering accelerated growth. However, in the reporting period the devaluation has had a material impact on our results. Over the last few years, we have actively reduced our FX exposure across the group, and this will continue to be a focus area in the future to limit the impact of any future devaluation. Our focus remains on areas which we can control: the provision of reliable telecom and mobile money services, at affordable rates across our 14 sub-Saharan markets in Africa where demand for these services remains significant. The excellent operating performance over the last quarter highlights this success, and we are well positioned to deliver against the growth opportunities these markets offer, with a continued focus on margin resilience.”
