Airtel has demonstrated a remarkable performance across all regions, maintaining its strength in the face of foreign exchange challenges, especially in Nigeria
Their recent highlights reflect resilience and impressive growth.
Airtel's total customer base has grown by 9.7%, reaching 147.7 million. The surge is attributed to the increasing adoption of mobile data and mobile money services, with data customers increasing by 23.0% to 59.8 million, and mobile money customers by 23.1% to 36.5 million. Constant currency Average Revenue Per User (ARPU) has increased by 9.8%, driven by higher usage in voice, data, and mobile money. Mobile money transactions have surged by 45.3% in constant currency, with a Q2’24 annualised transaction value of US$116bn in reported currency.
Financial performance:
Financially, Airtel remains robust. Revenue in constant currency increased by 19.7%, with reported currency revenues growing by 2.3% to US$2,623mn. While reported currency revenues declined by 4.7% in Q2'24 due to the Nigerian naira devaluation in June 2023, Q2'24 constant currency revenues rose by 19.0%. All segments reported double-digit constant currency revenue growth, with mobile services revenue up by 18.3%, 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 company's EBITDA witnessed significant growth, increasing by 21.2% in constant currency and 3.7% in reported currency to US$1,302mn. The EBITDA margin improved by 70bps over the previous period, reaching 49.6%. However, reported currency EBITDA declined by 3.3% in Q2'24 due to the impact of the Nigerian naira devaluation.
Airtel reported a loss after tax of US$13mn, primarily driven by a foreign exchange loss of US$471mn recorded in finance cost before tax and US$317mn after tax due to the devaluation of the Nigerian naira in June 2023.
Capital allocation:
Airtel continues to invest for growth with a capex of US$312mn and has remaining debt of US$550mn at HoldCo, falling due in May 2024. Cash at the HoldCo is US$495mn, and the company is well-positioned to repay the debt when it matures.
In line with its progressive dividend policy, the Airtel Board declared an interim dividend of 2.38 cents per share, representing a 9% increase.
Sustainability strategy:
Airtel's commitment to sustainability is evident through its US$57mn partnership with UNICEF, aimed at providing educational resources to children, free of charge, across nine of its 13 markets. Furthermore, the company is working towards achieving net-zero emissions through various initiatives.
Airtel's recent performance showcases its ability to navigate challenges while pursuing growth, sustainability, and innovation. Despite hurdles, the company remains steadfast in its mission to provide top-quality telecom services and contribute positively to the communities it serves.
Olusegun Ogunsanya, group CEO, remarked, “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, our results for the first quarter were significantly impacted by the changes to the FX market in Nigeria, introduced by the Central Bank. While 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 de-risk the balance sheet and improve profitability across the Group.
"Looking forward, 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.”
