Airtel Africa Plc has released its nine month result for the period ended December 31, 2021, with a growth of 21.7% in revenue. According to the company “effective execution of our strategy resulted in another strong set of results across all our regional segments and key services”.
Highlights of the financial account shows that underlying revenue in constant currency grew by 24.8%. Revenue in Nigeria grew by 29.0%, in East Africa by 24.4% and in Francophone Africa by 19.0% in constant currency. We continued our strong double-digit growth across all key services: our voice revenue grew by 16.1%, and both data revenue and mobile money revenue grew by 37.2%, and other revenue by 22.0%.
As a result, mobile services revenue grew by 23.3% in constant currency (20.7% in reported currency) and mobile money services revenue grew by 37.2% (39.6% in reported currency). The year-on-year constant currency revenue growth rate for Q3’22 of 20.0% was lower than the nine-month growth rate of 24.8% primarily due to softer comparatives in the first quarter of the prior year during the peak period of Covid-19 related restrictions across the region.
Profit after tax almost doubled to $514m, an increase of 97.3%. The increase was mainly led by higher operating profits along with lower net finance costs, which more than offset the increase in tax charges due to increased profits.
Total tax charges increased by $129m, largely due to higher operating profit and withholding tax on dividends by subsidiaries. The prior period also benefited from the recognition of a deferred tax credit of $14m in Tanzania. Basic EPS improved to 11.7 cents and EPS before exceptional items improved to 11.5 cents, with higher profits more than offsetting the associated increased tax.
Net finance costs were lower compared with the previous period driven by lower forex losses. The increase in tax charges of $129m was due to higher operating profit and withholding tax on dividends by subsidiaries, with the prior period also benefitting from $14m deferred tax credit recognition.
Net debt was $3,050m, a reduction of $468m mainly due to increased cash generation and proceeds from Airtel Money investments. Leverage improved to 1.4x from 2.1x in the previous period, largely driven by increased cash generation, expansion in underlying EBITDA and $550m of receipts from mobile money minority investors. Our balance sheet has also been further de-risked by continued localisation of our debt into the OpCos.
Net cash generated from operating activities increased by $282m, an increase of 23.1% to $1,499m (from $1,217m in the previous period), mainly driven by higher profit before tax of $382m partially offset by higher tax payments on the increased profits.
Commenting on the nine month financial statements, the chief executive officer Segun Ogunsanya explained “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”.
According to him “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. We are 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. We aim to continue providing a simple and intuitive customer experience through streamlined customer journeys.
