Airtel, one of the leading telecommunications companies in the region, has released its latest financial results, showcasing impressive growth in key performance indicators (KPIs) and financial performance. The company’s total customer base grew by 9.1% to reach 151.2 million, driven by the increasing adoption of mobile data and mobile money services. Data customers saw a significant increase of 22.4% to 62.7 million, while mobile money customers grew by 19.5% to 37.5 million.
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The growth in customer base was accompanied by a constant currency average revenue per user (ARPU) growth of 10.0%. This growth was primarily driven by increased usage across all segments. Additionally, Airtel experienced a 41.3% increase in mobile money transaction value in constant currency, with a reported currency transaction value of $116 billion in Q3’24.
In terms of financial performance, Airtel recorded a 20.2% growth in revenue in constant currency, with Q3’24 growth accelerating to 21.0%. However, reported currency revenues declined by 1.4% to $3,861 million. This decline was primarily due to currency devaluation, particularly the devaluation of the Nigerian naira, which continued to impact reported revenue trends. Despite this, all segments of the company delivered double-digit constant currency growth. Mobile services revenue grew by 18.6% in constant currency, driven by voice revenue growth of 11.2% and data revenue growth of 28.5%. Mobile money revenue also experienced significant growth, increasing by 31.8% in constant currency.
Airtel’s constant currency earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 21.9%, with Q3’24 EBITDA growing by 23.3%. The company’s EBITDA margin of 49.4% increased by 72 basis points over the prior period, despite foreign exchange headwinds and inflationary pressure. However, reported currency EBITDA declined by 0.4% to $1,908 million, with Q3’24 EBITDA 8.3% lower due to the continued impact of currency headwinds.
Profit after tax for the period was $2 million, primarily affected by significant foreign exchange headwinds. This includes a $330 million exceptional loss after tax resulting from the devaluation of the Nigerian naira in June 2023 and the Malawian kwacha in November 2023. The Nigerian naira devalued further in Q3’24, leading to a $140 million derivative and foreign exchange losses net of tax. However, this is not treated as an exceptional item. Earnings per share (EPS) before exceptional items declined by 34.6% to 7.1 cents, while basic EPS stood at negative (1.6 cents), compared to 12.5 cents in the prior period. The decline in basic EPS was primarily due to significant derivative and foreign exchange losses.
Airtel’s capital allocation strategy remained focused on investing for future growth. The company’s capital expenditure (Capex) increased by 8.2% to $494 million compared to the prior period. The full-year Capex guidance is set between $800 million and $825 million. Airtel’s leverage improved from 1.4x in the prior period to 1.3x in December 2023. The remaining debt at HoldCo is $550 million, falling due in May 2024. The company expects to fully repay the HoldCo debt with the cash available at the end of the period, which stood at $560 million.
In line with the positive cash generation and leverage position, the Airtel Board plans to launch a share buy-back program of up to $100 million, starting in early March 2024 over a 12-month period. This initiative reflects the company’s confidence in its strong operating performance and its commitment to delivering value to shareholders.
Airtel’s sustainability strategy also garnered attention in the report. The company launched a five-year $57 million partnership with UNICEF, aiming to provide educational resources to over one million children across 10 markets. Additionally, Airtel introduced its Scope 3 strategy, which focuses on engaging with top-tier partners and suppliers to monitor and minimize their environmental impact.
Olusegun Ogunsanya, Group Chief Executive Officer of Airtel, expressed satisfaction with the company’s growth and performance. Despite inflationary and currency headwinds, Airtel’s focus on executing its growth strategy and strong operational execution resulted in sustained positive growth momentum. Demand for Airtel’s voice, data, and mobile money services remained resilient, driving a strong 20.2% constant currency revenue growth. The company remains well positioned to capitalize on growth opportunities and is committed to margin resilience.
Airtel’s latest financial results highlight its strong growth in key performance indicators and financial performance. The company’s customer base, mobile services revenue, and mobile money revenue all experienced significant growth. Despite currency devaluation and inflationary pressures, Airtel’s focus on operational execution and capital allocation priorities positions it for continued success and value creation for shareholders.
