BY CHARLES ABUEDE
Airtel Africa has reported a strong 20.6 percent growth to $4.7 billion in its annual revenue from $3.9 billion last year driven by strong growth in its revenues from voice ($2.4 billion), data ($1.5 billion) mobile money ($553 million), with other revenues printing at $407 million.
The growth in revenue was partially offset by double growth from its regions of operation as well as currency devaluations, mainly in the Nigerian naira (5.6%) and the Malawian kwacha (7.2%), and appreciation in the Ugandan shilling (4.1%) and Zambian kwacha (4.4%).
In its 2022 full year audited financial statement made available to Business A.M., Airtel Africa stated that revenue growth for the year benefited from a weakened performance in the first quarter of the prior year during the peak period of Covid-19 restrictions across the region.
Across the region of operations, Airtel Africa’s Nigerian subsidiary recorded a 21 percent growth to $1.9 billion with a constant currency growth of 27.7 percent. The differential in growth rates was due to the devaluation of the Nigerian naira by 5.6 percent. The constant currency revenue growth of 27.7 percent was driven by both customer base growth of 5.8 percent and ARPU growth of 33 percent largely driven by higher data and voice usage.
Voice revenue grew by 15.9 percent to $985 million, driven by an increase in voice usage per customer of 20.8 percent which led to an ARPU increase of 20.7 percent. Customer base growth was affected by the NIN-SIM linkage regulations in Nigeria during the first half of the year but returned to growth, adding four million customers in the second half of the year, achieving net growth of 2.4 million customers over the full year. The number of regulatory approved outlets expanded to over 19,100 as of 31 March 2022.
Furthermore, data revenue grew by 41.1 percent in constant currency, driven by data customer base growth of 14.9 percent and data ARPU growth of 37.6 percent, led by growth in data usage per customer to four gigabytes per month (from 2.8 GB in the prior year). The wireless carrier’s continued 4G network expansion and increased smartphone penetration have supported data usage growth. Almost 99 percent of the company’s sites in Nigeria are now delivering 4G, and smartphone penetration of its customers has increased by almost one percentage point.
Meanwhile, data revenue accounted for 39.1 percent of total revenue in Nigeria in the year, up by 3.7 percent on the prior year. However, in Q4 of 2022, Airtel said 43.6 percent of its data customer base was 4G users, contributing to 76 percent of total data usage. Data usage per customer reached 4.2 GB per month and 4G data usage per customer hit 6.5 GB per month, a significant increase from the 4.6 GB usage per customer per month of Q4’21.
Segun Ogunsanya, chief executive officer, Airtel Africa, said of the result and trading update: “This is another strong set of results for Airtel Africa, demonstrating our solid execution as we continue to enrich the lives of a growing number of people through leveraging the sizeable opportunity to promote digital and financial inclusion across our markets. We have delivered strong double-digit growth in revenues across all our regions and all our key services, with improving margins driven by strong cost control, and expanding cash generation which is enabling us to continue to invest in our network and services and expand our distribution, as well as strengthening our balance sheet and increasing our returns to shareholders.”
Ogunsanya said Airtel Africa is connecting more customers in new and existing coverage areas while driving usage levels and ARPUs to new highs, adding that the telco successfully executed on a number of strategic initiatives in the year, with tower sales completed in four countries, $550 million of minority investments secured for its mobile money business and a successful buyout of minorities in its Nigerian operation.
“Our receipt last month of a full PSB licence in Nigeria will help us to accelerate financial inclusion in the territory and drive our mobile money business even faster. While the fundamentals of our six-pillar growth strategy remain unchanged, we are looking to accelerate our performance through a greater focus on digitalisation and we have underpinned our strategic pillars with our sustainability ambition,” he added.
Other highlights of Airtel’s full-year performance:
Operating free cash flow of $1.65 billion, up 40.5 percent, with net cash generated from operating activities up 20.7 percent to $2.01 billion. Over the last twelve months, the business repaid nearly $1.4 billion of debt at HoldCo as a result of strong cash upstreaming across its OpCos and proceeds from minority investments in mobile money and tower sales.
Also, the company’s leverage ratio improved to 1.3x from 2.0x in the prior year, with $1 billion of debt now held at HoldCo when compared to $2.4 billion in 2021. Its operating profit grew by 37.2 percent to $1.54 billion in reported currency, profit after tax grew 82 percent to $755 million, led mainly by higher operating profits and stable net finance costs which more than offset the associated increase in tax charges.
Meanwhile, its exceptional gains were also $12 million higher than the prior year.
At the close of the reporting period, Airtel Africa’s customer base was 128.4 million, up 8.7 percent, with increased penetration across mobile data (customer base up 15.2 percent) and mobile money services (customer base up 20.7 percent). Though, the NIN/SIM regulations in Nigeria impacted customer growth in H1, it returned to solid growth, adding four million customers in Nigeria during the second half of 2022.
In the meantime, the company board has recommended a final dividend of three cents per share, making the total full-year 2022 dividends five cents per share from four cents per share in 2021, while the basic earnings per share (EPS) increased 86.5 percent to 16.8 cents with higher profits more than offsetting the associated increased tax charges, and higher non-controlling interests due to higher profit contributions in OpCos with minority shareholdings and new minority shareholdings in Airtel Money, partially offset by lower minority interests in Airtel Nigeria as a result of the successful share buy-back.
