Airtel Africa has announced the sale of the tower portfolio belonging to Airtel Tanzania to a joint venture company (the Purchaser).
The transaction is the latest strategic divestment of the Group’s tower portfolio as it focuses on an asset-light business model and on its core subscriber-facing operations.
The transaction
The consideration for the transaction is approximately $175million, of which approximately $157.5million is payable on the first closing date (which is expected to take place in the second half of the Group’s current financial year) with the balance payable in installments upon the completion of the transfer of any remaining towers to the Purchaser.
Around $60million from the proceeds will be used to invest in network and sales infrastructure in Tanzania and for distribution to the Government of Tanzania, as per the settlement described in the Airtel Africa IPO Prospectus document published in June 2019. The balance of the proceeds will be used to reduce debt at Group level.
The tower portfolio in Airtel Tanzania comprises approximately 1,400 towers which form part of the Group’s wireless telecommunications infrastructure network. Under the terms of the Transaction, the Group’s subsidiary Airtel Tanzania plc will continue to develop, maintain and operate its equipment on the towers under a separate lease arrangement with the Purchaser.
Read Also: 56m Nigerians now have NIN NIMC
The purchaser
The purchaser of the tower is owned by a wholly-owned subsidiary of SBA Communications Corporation, a leading global independent owner and operator of wireless communications infrastructure, as majority owner, and by Paradigm Infrastructure Limited (Paradigm), a UK company focused on developing, owning and operating shared passive wireless infrastructure in selected growth markets (the Transaction).
How Airtel share price is performing
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.
The N837 per share which Airtel Africa Plc closed on Tuesday at the Nigerian Exchange (NGX) Limited represents a decline of 1.7percent compared to its year-open price. It had reached a 52-week high of N930 and a corresponding 52-week low of N328.7.
Airtel Africa’s 7 days trades
Airtel Africa results for year ended March 31, 2021
The Telco reported revenue grew by 14.2percent to $3,908million, with fourth-quarter (Q4) 21 reported revenue growth of 15.4percent. Constant currency underlying revenue growth was 19.4percent, with Q4 growth of 21.7percent.
Growth was recorded across all regions: Nigeria up 21.9percent, East Africa up 23.5percent and Francophone Africa up 10percent; and across key services, with revenues for voice up 11percent, data up 31.2percent and mobile money up 35.5percent.
Underlying Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) was $1,792million, up 18.3percent in reported currency, and growing 25.2percent in constant currency.
Underlying EBITDA margin was 46.1percent, adding 181 basis points (210 basis points higher in constant currency). Underlying EBITDA margin for Q4 was 47.7percent, an increase of 389 basis points in constant currency. Operating profit increased 24.2percent to $1.119billion in reported currency, and by 32.8percent in constant currency. Free cash flow was $647million, up 42.8percent on the prior year.
The company’s basic earnings per share (EPS) was 9 cents, down 12.6percent, largely due to prior year exceptional items and a one-off derivative gain. Excluding these, basic restated EPS rose 44.5percent. EPS before exceptional items was 8.2 cents. Airtel Africa customer base grew by 6.9percent to 118.2 million, with increased penetration across mobile data (customer base up 14.5percent) and mobile money services (customer base up 18.5percent). The recent slowdown in customer base growth has been due to new SIM registration regulations in Nigeria.
