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Mobile money transfer swings Airtel’s revenue to $3.9bn

Airtel buys back over 5mn shares from Citigroup in 12 trading days

Airtel Africa, a telecommunications company, reported a 12 percent increase in revenue to $3.91 billion in its recently released nine-month (9M) financial results for the period ended December 2022 from $3.49 billion in the nine-month period of 2021.

The growth in revenue was on the back of a 26.85 percent spike in mobile money transfers which amounted to $515 million in the nine-month period of 2022 from $406 million in the nine-month period of 2021.

The telecommunications company also generated revenue from voice, data, and others which grew by 7 percent, 17 percent, and N4.9 percent amounting to $1.87 billion, $1.32 billion, and $321 million respectively in the nine-month period of 2022.

Airtel’s total customer base was up by 10 percent to 138.5 million, as the penetration of mobile data and mobile money services continued to rise, driving the data customer base up 13.6 percent and the mobile money customer base up 22.2 percent.

Consequently, profit grew by 1.75 percent to $523 million in the nine-month period of 2022 from $514 million in the corresponding period of 2021. However, with expenses growing by 11.69 percent year on year, amounting to $2.01 billion in the nine-month period of 2022, the profit margin declined by 136 basis points to 13.36 percent in 9M’2022 from 14.72 percent in 9M’2021.

Commenting on the results, Segun Ogunsanya, the chief executive officer of Airtel, said “Providing affordable, innovative, and essential services to customers in our 14 markets with unparalleled network quality and customer service is integral to our ambition of transforming lives across Africa.

“These strong results are a testament to this strategy despite the current macroeconomic and geopolitical uncertainties. The execution of our six-pillar strategy continues to provide the foundation for growth, driving 10 percent customer growth, supported by 14 percent growth in data customers and over 22 percent growth in mobile money customers,” he said.

Ogunsanya said, “higher usage across voice, data, and money have contributed to further ARPU growth of over 7 percent, resulting in 18 percent revenue growth in the quarter as penetration across each segment continues to increase.”

“I am particularly excited by the performance of our mobile money business, with annualized transaction value reaching nearly $100 billion, as we continue to drive financial inclusion in the continent,” he added.

Net finance costs were up 78.35 percent to $519 million in 2022 from $291 million in 2021, largely due to higher foreign exchange and derivative losses of $184 million mainly comprised of a $40 million loss on derivatives and higher foreign exchange losses arose from the restatement of balance sheet liabilities (a loss of $70 million on devaluation of the Nigerian Naira, and other devaluation losses of $53 million mainly arising from the Malawian Kwacha, Ugandan and Kenyan shilling).

As a result, earnings before interests, taxes, depreciation, and amortisation (EBITDA) grew by 12.57 percent to $1.9 billion in the nine-month period of 2022 from $1.7 billion in the same period of 2021, bringing the EBITDA margin to 48.95 percent in 9M’2022, up from 48.74 percent in 9M’2021.

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Ogunsanya said, “despite the inflationary pressures across our markets, the strong revenue performance in the first nine months of the year, combined with a continued focus on cost optimisation, contributed to EBITDA growth, with stable EBITDA margins.”

“Our strong operating performance, combined with a continued focus on our capital allocation priorities has facilitated the de-risking of our balance sheet with the early repayment of $450 million HoldCo debt in July this year,” he added.

Airtel Africa increased capital expenditure (Capex) by 5.8 percent to $457 million in the nine-month period of 2022 from $432 million in the nine-month period of 2021.

“We will continue to invest in expanding our network and evolving our service offerings further to deepen both financial and digital inclusion across our markets. We have especially focussed on enhancing our spectrum footprint across all our markets,” Ogunsanya said.

“Over the last nine months we have spent almost $490 million on 4G and 5G spectrum across key markets to improve network capacity and quality, future-proof the company for continued growth opportunities, and facilitate economic progress in all our markets.”

“I am particularly pleased with these results which demonstrate the opportunities these markets offer, our ability to deliver against these opportunities, and our contribution to local communities and economies across our footprint.”

“For the remainder of the financial year. we continue to anticipate sustained growth in the business with continued EBITDA margin resilience,” he added.