Airtel Africa has released its half-year financial report for the period ending 30th September 2022, and it shows a 12.9% revenue growth to $2.57 billion.Â
According to the report, revenue growth in the half-year period was impacted by the effect of some voice customers being barred in Nigeria and the loss of tower-sharing revenues following the recent sales of towers in Tanzania, Madagascar, and Malawi. It stated that growth for the half would have been around 20.4% in constant currency terms if the challenges were not present.Â
For mobile services and mobile money services combined, total revenue grew in Nigeria by 19.7%, East Africa by 16.2%, and Francophone Africa by 13.0% over the period.
The company also saw a strong constant currency revenue growth posted across all reporting segments: mobile services revenue for the Group was up by 15.6% driven by Nigeria (19.7%), East Africa (12.4%), and Francophone Africa (12.1%). Similarly, voice revenues continued to see double-digit revenue growth of 12.0%, whilst data revenues grew 22.1%. Revenue in mobile money also grew by 29.5% in constant currency, driven by 31.5% growth in East Africa and 23.6% growth in Francophone Africa.Â
Revenue growth in Q2’23 accelerated to 18.5% in constant currency from 15.3% in Q1’23: Nigeria mobile services grew by 21.0%, East Africa by 13.6%, and Francophone Africa by 13.5%. Further, mobile money revenue grew by 32.3% in Q2’23 in constant currency.Â
Finance costs increased by $189m, largely driven by a $160m increase in foreign exchange and derivative losses, as a result of a $31m derivative loss, a Nigerian naira devaluation impact of $30m, a CFA (Central African franc) devaluation impact of $45m and the balance being devaluation in the Malawian kwacha, Ugandan shilling & Kenyan shilling.Â
Total tax charges were lower by $46m mainly due to the initial recognition of a deferred tax credit of $42 million in Kenya. Non-controlling interests were lowered by $16 million due to the buy-back of minorities in Nigeria and lower minority allocation charges in Tanzania, partially offset by the increase in Airtel Money minority shareholdings.Â
EPS before exceptional items was 6.8 cents, a reduction of 9.5% largely because of higher foreign exchange and derivative losses of $160 million. Basic EPS increased to 7.9 cents (up by 3.7%) as a result of deferred tax asset recognition in Kenya.Â
As a result of increased cash generation, the telecoms balance sheet has also been further de-risked by the continued localization of its debt into the OpCos and continued debt reduction in HoldCo, following the $450 million HoldCo bond prepayment in July 2022.
 Turning to the outlook, long-term opportunities for us remain attractive. The company states that it continues to work actively to mitigate all our material risks and to deliver value for all our stakeholders whilst being mindful of currency devaluation and repatriation risks.Â
 What they are sayingÂ
Segun Ogunsanya, the chief executive officer, while speaking on the trading update said the company improved revenue despite the macro-economic challenges and currency devaluation risks.Â
He said, “Airtel Africa continued to deliver strong results as its purpose of transforming the lives of people across sub-Saharan Africa through digital and financial inclusion gained further momentum, with growth accelerating in the second quarter. Whilst we are not immune to the current macro-economic challenges and currency devaluation risks, I am pleased to report double-digit reported revenue growth in the period, largely driven by customer growth of 9.7% and ARPU growth of 7.2%, as we increased penetration and usage through our affordable service offerings.Â
 Ogunsanya also noted that it has been able to offset inflationary pressure by adopting a cost-efficiency initiative alongside innovations during the period. He said, “Our cost efficiency initiatives combined with improving growth trends have also helped offset inflationary pressures on our cost base and expand our EBITDA margin by 38bps in constant currency. We continue to de-risk our balance sheet and have further reduced HoldCo debt with the early repayment of $450 million of bonds in July.Â
“We continue to invest for growth and have increased capital expenditure by 27% over the period, alongside a substantial investment into additional spectrum across several markets.Â
On plans for its Payment Service Bank and Super-Agent license in Nigeria, he said, “Following the receipt of the Payment Service Bank and Super-Agent license in Nigeria during the period, we have launched our mobile money operations. We are excited about the opportunity in our biggest market and will continue to build trust and confidence in the brand, whilst investing in distribution to increase access to financial services for underserved communities within the country.Â
