Airtel says $100m share buy-back starts March

…grows customer base by 9.1% in 9M to December 2023

Airtel Africa Plc has released its results for nine-month (9M) period ended December 31, 2023.

The telco sustained operating momentum despite continued foreign exchange headwinds. The company disclosed its intention to buy back up to $100million of shares.

Financial performance

Revenue in constant currency grew by 20.2 percent, with Q3 growth accelerating to 21 percent. Reported currency revenues declined by 1.4 percent to $3,861million. In Q3 reported currency revenues declined by 8.3 percent as currency devaluation (primarily the Nigerian naira devaluation) continued to impact reported revenue trends.

All segments continued to deliver double-digit constant currency growth. Across the Group mobile services revenue grew by 18.6 percent in constant currency, driven by voice revenue growth of 11.2 percent and data revenue growth of 28.5 percent. Mobile money revenue grew by 31.8 percent in constant currency.

Constant currency EBITDA increased 21.9 percent, with Q3’24 EBITDA growing 23.3 percent. The EBITDA margin of 49.4 percent increased 72bps over the prior period despite foreign exchange headwinds and inflationary pressure. Reported currency EBITDA declined by 0.4 percent to $1,908million, with Q3’24 EBITDA 8.3 percent lower as currency headwinds continued to impact reported trends.

Profit after tax was $2million in the period, primarily impacted by significant foreign exchange headwinds, particularly the $330million exceptional loss after tax following the devaluation of the Nigerian naira in June 2023 and the Malawian kwacha in November 2023 after the structural changes in their respective FX markets. The Nigerian naira devalued further in Q3’24, resulting in a $140million derivative and foreign exchange losses net of tax, which is not treated as an exceptional item.

EPS before exceptional items was 7.1 cents, a decline of 34.6 percent. Basic EPS at negative (1.6 cents) compares to 12.5 cents in the prior period, impacted by the significant derivative and foreign exchange losses as explained above.

Operating key performance indicators (KPIs)

Total customer base grew by 9.1 percent to 151.2 million. The penetration of mobile data and mobile money services continued to rise, driving a 22.4 percent increase in data customers to 62.7 million and a 19.5 percent increase in mobile money customers to 37.5 million.
Constant currency ARPU growth of 10 percent was primarily driven by increased usage across all segments.

Mobile money transaction value increased by 41.3 percent in constant currency, with third quarter (Q3) 2024 annualised transaction value of $116billion in reported currency.

Capital allocation

Capex of $494million was 8.2 percent higher compared to the prior period. Capex guidance for the full year remains between $800million and $825million as we continue to invest for future growth.

Leverage of 1.3x in December 2023, improved from 1.4x in the prior period. The remaining debt at HoldCo is $550million, falling due in May 2024. Cash at the HoldCo was $560million at the end of the period and the Group is expecting to fully repay the HoldCo debt when due.

In light of the Holdco cash accretion and where leverage is today, and in view of the consistent strong operating cash generation of the Company, the Board intends to launch a share buy-back programme of up to $100million, starting early March 2024 over a 12-month period.

Sustainability strategy

Our landmark five-year $57million partnership with UNICEF has been launched across 10 of our markets providing access to educational resources, free of charge, on our way to transforming the lives of over one million children through our educational programmes by 2027.

In November 2023 we launched our Scope 3 strategy which focuses on an ongoing engagement programme with our top tier partners and suppliers, ensures a regular flow of information and enables us to monitor their impact on the environment.

Olusegun Ogunsanya, group chief executive officer, Airtel Africa said: “We remain focussed on the execution of our growth strategy and, combined with our strong operational execution, this has ensured that we continue to see sustained, positive growth momentum across the business, despite the inflationary and currency headwinds. Demand remains resilient, highlighting the vital nature of the voice, data and mobile money services we provide to our customers across the region, and has resulted in a strong 20.2 percent constant currency revenue growth over the period, with an increase in EBITDA margins.

“This strong operating performance has limited the impact that currency movements have had on the Group. In this regard, whilst further currency devaluation, particularly in Nigeria, has weighed on our reported financial performance, it will not affect the execution of our growth plans”.

“I am pleased to note that our sustained focus on capital allocation priorities will enable us to fully repay HoldCo debt when due in May 2024, ensuring the continued success of our balance sheet de-risking strategy. This will allow us to continue investing in our strategic priorities to provide affordable and reliable services to customers across our markets, whilst also enabling us to capitalise on new business opportunities, such as our new data centre business, Nxtra by Airtel, which we launched in December.

“In light of our consistent strong operating performance and given current leverage, the Board intends to launch a share buy-back programme of up to $100million, starting early March 2024 over a 12-month period. We continue to be well positioned to deliver on the attractive growth opportunities our markets offer and despite the challenge of rising diesel prices, ongoing currency devaluation and inflationary pressures across some of our markets, we remain focussed on margin resilience,” he said.