Technology Mirror
Airtel Africa Rakes $116b from Mobile Money Amid FOREX Headwinds in Nigeria

Airtel Africa Rakes $116b from Mobile Money Amid FOREX Headwinds in Nigeria

Airtel Africa Plc results for half year ended, September 2023, has revealed strong and resilient operating performance across all regions despite foreign exchange headwinds, specifically in Nigeria.

According to the report, total customer base grew by 9.7% to 147.7 million, as the penetration of mobile data and mobile money services continued to rise, while driving a 23.0% increase in data customers to 59.8 million and a 23.1% increase in mobile money customers to 36.5 million.

The pan-African report showed a constant currency ARPU growth of 9.8% that was driven by increased usage across voice, data and mobile money even as mobile money transaction value increased by 45.3% in constant currency, with Q2’24 annualised transaction value of $116bn in reported currency.

The financial performance of the teleco indicated revenue in constant currency grew by 19.7%, with reported currency revenues up by 2.3% to $2,623m. In Q2’24, and reported currency revenues declined by 4.7% reflecting a full quarter’s impact of the Nigerian naira devaluation in June 2023. Q2’24 constant currency revenues increased by 19.0%.

Whilst reported currency revenue growth was impacted by currency devaluation, all segments delivered double-digit
constant currency revenue growth, across the Group mobile services revenue grew by 18.3% in constant currency,
driven by voice revenue growth of 11.5% and data revenue growth of 28.1%. Mobile money revenue grew by 30.9%
in constant currency.

The EBITDA increased by 21.2% in constant currency, and 3.7% in reported currency to $1,302m, with an EBITDA margin
of 49.6%, reflecting a 70bps margin improvement over the prior period despite inflationary cost pressures and foreign
exchange headwinds. Reported currency EBITDA declined by 3.3% in Q2’24 as the full impact of the Nigerian naira
devaluation in June 2023 was incorporated.

However, loss after tax was $13m driven largely by a foreign exchange loss of $471m recorded in finance cost before tax and $317m after tax because of the devaluation of the Nigerian naira in June 2023. This impact has been classified as an
exceptional item.

And the EPS before exceptional items was 7.0 cents, an improvement of 3.2%. EPS before exceptional items and excluding
foreign exchange and derivative losses was 10.7 cents. Basic EPS at negative (1.5 cents) compared to 7.9 cents in the
prior period, wasimpacted by $317m net exceptional loss on account of naira devaluation in June 2023.

Olusegun Ogunsanya, Group chief executive officer, on the trading update, said  “I am pleased to report a strong operating performance for the Group despite foreign exchange headwinds in many of our markets and specifically in Nigeria. The resilient growth in voice, data and mobile money usage levels reflects the inherent demand for these essential services across our footprint, and our six-pillar ‘win-with’ strategy continues to ensure we capture this growth opportunity by expanding our customer base and providing the platform to enable increased usage across the network. This strong momentum is supported by continued cost efficiencies which enabled further EBITDA margin expansion.”

As reported in July 2023, the results for the first quarter were significantly impacted by the changes to the FX market in
Nigeria, introduced by the Central Bank. Whilst the changes are required for the long-term benefit of the Nigerian economy,
the immediate impact of the naira devaluation continues to weigh on our reported financial performance in the period.

“Our focus remains to enhance long term value by continuing to drive sustained and efficient growth. Over the last five years
we have delivered constant currency revenue and EBITDA CAGR of 17.1% and 20.7% respectively, allowing us to further derisk the balance sheet and improve profitability across the Group”, he said..

Looking forward, he said that the delivery of affordable and reliable telecom and mobile money services across our markets remains “our key focus. Our strong operating performance continues to make us a stronger and bigger company, which is well positioned to deliver against the growth opportunities these markets offer. Despite the challenges of rising diesel prices in Nigeria, we aim to limit the impact with continued operational leverage and further cost efficiencies to deliver an improved
EBITDA margin in FY’24 versus FY’23.”


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