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Airtel Africa PLC (AAF)

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Wednesday 12 May, 2021

Airtel Africa PLC

Full Year Results

RNS Number : 3477Y
Airtel Africa PLC
12 May 2021
 

Airtel Africa plc

Results for year ended 31 March 2021

12 May 2021

Continued strong revenue growth, increased profitability and cash flow, and continued deleveraging                    .

Highlights

· Reported revenue grew by 14.2% to $3,908m, with Q4'21 reported revenue growth of 15.4%.

· Constant currency underlying revenue growth was 19.4%, with Q4'21 growth of 21.7%. Growth was recorded across all regions: Nigeria up 21.9%, East Africa up 23.5% and Francophone Africa up 10%; and across key services, with revenues for voice up 11.0%, data up 31.2% and mobile money up 35.5%.

· Underlying EBITDA was $1,792m, up 18.3% in reported currency, and growing 25.2% in constant currency.

· Underlying EBITDA margin was 46.1%, adding 181 basis points (210 basis points higher in constant currency). Underlying EBITDA margin for Q4'21 was 47.7%, an increase of 389 basis points in constant currency.

· Operating profit increased 24.2% to $1,119m in reported currency, and by 32.8% in constant currency.

· Free cash flow was $647m, up 42.8% on the prior year.

· Basic EPS was 9.0 cents, down 12.6%, largely due to prior year exceptional items and a one-off derivative gain. Excluding these, basic restated EPS rose 44.5%. EPS before exceptional items was 8.2 cents.

· Our customer base grew by 6.9% to 118.2 million, with increased penetration across mobile data (customer base up 14.5%) and mobile money services (customer base up 18.5%). The recent slowdown in customer base growth has been due to new SIM registration regulations in Nigeria.

· The Board has recommended a final dividend of 2.5 cents per share, making the total dividend for FY21 4.0 cents per share.

 

Alternative performance measures 4
(Year ended)

GAAP measures
(Year ended)

Description

March-21

March-20

Reported

currency

Constant currency

Description

March-21

March-20

Reported currency

$m

$m

change %

change %

$m

$m

change %

Underlying revenue 1

3,888

3,422

13.6%

19.4%

Revenue

3,908

3,422

14.2%

Underlying EBITDA

1,792

1,515

18.3%

25.2%

Operating profit

1,119

901

24.2%

Underlying EBITDA margin

46.1%

44.3%

181 bps

210 bps

Profit before tax 2

697

598

16.7%

Free cash flow

647

453

42.8%

 

Profit after tax 2

415

408

1.8%

EPS before exceptional items (cents)

8.2

7.3

12.8%

 

Basic EPS (cents)

9.0

10.3

(12.6%)

EPS before exceptional items (cents) - restated 3

8.2

6.9

18.2%

 

Basic EPS (cents) -restated 3

9.0

9.8

(8.4%)

 ( 1) Underlying revenue excludes one-time exceptional revenue of $20m relating to a settlement in Niger in the year ended 31 March 2021. (2) PBT and PAT growth lagged operating profit growth largely due to one-off items incurred in the same period in the prior year. Excluding the benefit of exceptional items and a one-off derivative gain in the prior period, PBT and PAT increased by 40.7% and 47% respectively. Please refer to page 4 for explanations of GAAP measure movements. (3)   In July 2019, after the announcement of Initial Public Offering (IPO), the company issued 676,406,927 new shares. EPS has been restated to reflect the position if all the shares as of 31 March 2021 been issued on 1 April 2019, for a like-for-like comparison. (4) Alternative performance measures (APM) are described on page 49.

 

Raghunath Mandava, chief executive officer, on the trading update:

 "In these challenging times I want to say a huge thank you to all our employees, our business partners, and governments and regulators who have supported us, and in turn facilitated our continued support to the economies and communities we serve.

Our performance has been strong, with reported growth of 13.6% in underlying revenue and 18.3% in underlying EBITDA, and constant currency growth of 19.4% and 25.2% respectively. Contributions to this growth came across all regions, with particular improvement in Francophone Africa, and across all our major services, with mobile money, data and voice each posting double-digit revenue growth.

Our customer base also grew strongly for most of the year with new customer registration requirements in Nigeria stemming our onboarding of new customers in the final quarter, and these restrictions were lifted in second half of April.

In line with our strategy of unlocking value in our mobile money business, we will soon welcome two new minority investors (The Rise Fund and Mastercard) in agreed transactions which value this part of our business at $2.65bn, as well as bringing $300m into the Group. We have also agreed to sell more of our tower portfolio, yielding yet more cash for the business.

The Covid pandemic had eased during the course of the year, however, more recently we have seen a surge in cases. So far this has had no adverse impact on the business, though we will continue to monitor the situation closely.

In these times, our purpose of transforming lives has never been more critical. It has always meant more than simply providing mobile and financial services; it is about our drive to create a sustainable future. To that end, this year the leadership team has worked to create our sustainability framework, outlining the role we can play and the focus areas where we can make the biggest difference for each of our business, our people, our community, and our environment. We will report back with our goals later this year and deliver our first sustainability report in 2022.

The combination of bringing connectivity to underpenetrated mobile markets and improving financial inclusion through banking the unbanked, across our territories of operation, together provide us with a sizeable runway of sustainable profitable growth potential, and one we remain very confident of delivering."

 

About Airtel Africa

Airtel Africa is a leading provider of telecommunications and mobile money services, with a presence in 14 countries in Africa, primarily in East Africa and Central and West Africa.

Airtel Africa offers an integrated suite of telecoms solutions to its subscribers, including mobile voice and data services as well as mobile money services, both nationally and internationally. We aim to continue providing a simple and intuitive customer experience through streamlined customer journeys.

 

Enquiries

Airtel Africa - Investor Relations

Pier Falcione

Morten Singleton

[email protected]

 

+44 7446 858 280

+44 7464 830 011

+44 207 493 9315

 

 

Hudson Sandler

Nick Lyon

Bertie Berger

[email protected]

 

 

 

+44 207 796 4133

 

Conference call

The management team will host an analyst and investor conference call / webcast at 1:00pm UK time (BST), on Wednesday 12 May 2021, including a Question and Answer session.

 

To participate in the conference call and webcast, and to ask questions, please register before the event using the following link:

https://www.diamondpass.net/8501685  

 

Please note that you will only receive your dial in number and link to the webcast upon registration.

 

 

Key financial information

 

Description

Unit of measure

Year ended

Quarter ended

Mar-21

Mar-20

Reported currency
change %

Constant currency
change %

Mar-21

Mar-20

Reported currency
change %

Constant currency
change %

Profit and loss summary

 

 

 

 

 

 

 

 

 

Underlying revenue 1

$m

3,888

3,422

13.6%

19.4%

1,038

899

15.4%

21.7%

Voice revenue

$m

2,083

1,970

5.8%

11.0%

547

510

7.2%

12.8%

Data revenue

$m

1,157

930

24.3%

31.2%

315

253

24.2%

31.7%

Mobile money revenue 2

$m

401

311

29.1%

35.5%

110

83

32.7%

38.7%

Other revenue

$m

347

302

14.9%

20.0%

91

77

18.1%

23.7%

Expenses

$m

(2,107)

(1,924)

9.5%

14.5%

(544)

(505)

7.7%

12.9%

Underlying EBITDA 3

$m

1,792

1,515

18.3%

25.2%

495

397

24.7%

32.4%

Underlying EBITDA margin

%

46.1%

44.3%

181 bps

210 bps

47.7%

44.1%

354 bps

389 bps

Depreciation and amortization 4

$m

(681)

(605)

12.5%

17.2%

(176)

(152)

16.0%

21.1%

Operating exceptional items 5

$m

14

(4)

(479.9%)

(399.8%)

1

-

0.0%

0.0%

Operating profit 6

$m

1,119

901

24.2%

32.8%

319

244

30.7%

40.3%

Net finance costs

$m

(423)

(372)

13.5%

 

(104)

(147)

(29.5%)

 

Non-operating exceptional items

$m

-

69

(100.0%)

 

-

-

0.0%

 

Profit before tax

$m

697

598

16.7%

 

215

97

121.6%

 

Tax

$m

(318)

(237)

34.0%

 

(82)

(28)

197.3%

 

Tax - exceptional items

$m

36

47

(24.3%)

 

21

8

179.9%

 

Total tax charge 7

$m

(282)

(190)

48.5%

 

(61)

(20)

204.4%

 

Profit after tax 8

$m

415

408

1.8%

 

154

77

100.0%

 

Non-controlling interest

$m

(76)

(38)

100.8%

 

(22)

(12)

74.6%

 

Profit attributable to owners of the company - before exceptional items

$m

308

261

18.0%

 

121

57

111.7%

 

Profit attributable to owners of the company

$m

339

370

(8.4%)

 

132

65

104.8%

 

EPS - before exceptional items

cents

8.2

7.3

12.8%

 

3.2

1.5

111.8%

 

EPS - before exceptional items - restated 9

cents

8.2

6.9

18.2%

 

3.2

1.5

111.7%

 

Basic EPS

cents

9.0

10.3

(12.6%)

 

3.5

1.7

105.0%

 

Weighted average no of shares

million

3,758

3,586

4.8%

 

3,756

3,758

(0.1%)

 

Capex

$m

614

642

(4.3%)

 

211

246

(14.2%)

 

Operating free cash flow

$m

1,178

873

34.9%

 

284

151

87.9%

 

Free cash flow

$m

647

453

42.8%

 

181

65

179.4%

 

Net debt

$m

3,530

3,247

 

 

3,530

3,247

 

 

Leverage (net debt to underlying EBITDA)

times

2.0x

2.1x

 

 

2.0x

2.1x

 

 

Return on capital employed

%

16.5%

14.0%

2.5%

 

16.4%

13.7%

2.7%

 

Operating KPIs

 

 

 

 

 

 

 

 

 

ARPU

$

2.8

2.7

2.4%

7.7%

2.9

2.7

6.6%

12.4%

Total customer base

million

118.2

110.6

6.9%

 

118.2

110.6

6.9%

 

Data customer base

million

40.6

35.4

14.5%

 

40.6

35.4

14.5%

 

Mobile money customer base

million

21.7

18.3

18.5%

 

21.7

18.3

18.5%

 

(1) Underlying revenue includes intra-segment eliminations of $100m for the year ended 31 March 2021 and $91m for the prior period. And it excludes one-time exceptional revenue of $20m relating to a settlement in Niger in year ended 31 March 2021.

(2) Mobile money revenue post intra-segment eliminations with mobile services was $301m for the year ended 31 March 2021 and $220m for the prior period.

(3) Underlying EBITDA includes other income of $11m for the year ended 31 March 2021 and $17m for the prior period.

(4) Depreciation and amortisation increase of $76m is mainly due to investment in capex and additional spectrum in Nigeria.

(5) Operating exceptional items in the year ended 31 March 2021 includes exceptional revenue on account of a one-time settlement in Niger amounting to $20m.

(6) Operating profit includes $6m CSR (Corporate Social Responsibility) expense in the year ended 31 March 2021 and $5m in the prior period.

(7) Tax charges increased more than the PBT growth mainly due to a forex loss in non-DTA operating & HoldCo entities of $42m in the year ended 31 March 2021 as compared to a gain of $21m in the previous year.  

(8) Profit after tax for the year ended 31 March 2021 was largely flat compared with the previous year due to: (i) higher exceptional benefits of $51m in the prior year (excluding tax exceptional item); (ii) other finance costs in the prior year included a derivative gain of $47m; and (iii) higher tax in the year ended 31 March 2021 due to increased profits.

(9) In July 2019, following the announcement of the Initial Public Offering (IPO), the company issued 676,406,927 new shares. EPS has been restated to reflect the position if all the shares as of 31 March 2021 been issued on 1 April 2019, for a like-for-like comparison.

 

Financial review for the year ended 31 March 2021

These results continue to demonstrate the effective execution of our strategy, delivering strong revenue growth and the significant expansion of our underlying EBITDA margin. As a result, we were able to deliver double-digit underlying revenue growth of 17.6% in mobile services in constant currency (11.9% in reported currency) and 35.5% revenue growth in mobile money services (29.1% in reported currency).

Basic EPS was 9.0 cents, lower than the 10.3 cents from the prior year, largely a result of the lower number of average shares in the previous period (EPS impact of 0.5 cents), an increase in tax charges due to higher operating profits and withholding tax on dividends by subsidiaries, a one-off derivative gain in the prior year amounting to $47m in other finance costs, and recognition of a one-off gain of $72m related to the expired indemnity to certain pre-IPO investors which was accounted for as an exceptional item. Non-controlling interest more than doubled largely due to improved profits in several operating companies ("OpCos") with minority shareholdings, including Airtel Tanzania, Airtel Niger and Airtel Malawi. Excluding exceptional items and the one-off $47m derivative gain, basic restated EPS increased by 44.5%.

 

GAAP measures

 

Revenue

Reported revenue grew by 14.2%, driven by 19.4% growth in underlying constant currency revenue, partially offset by currency devaluations, mainly in the Nigerian naira (10%), Zambian kwacha (34%) and Kenyan shilling (5.7%), in turn partially offset by appreciation in the Central African franc (7.1%). Reported revenue benefitted from a one-time exceptional revenue of $20m relating to a settlement in Niger.

Operating profit

Operating profit was $1,119m, up 24.2% in reported currency, largely a function of strong revenue growth and lower operating expenditures in proportion to revenue. In constant currency operating profit grew by 32.8%.

Net finance costs

Net finance costs were $423m, an increase of $51m, driven by higher other finance costs which more than offset the reduced interest costs of $8m from lower average gross debt. The increase in other finance costs was due to a one-off derivative gain of $47m in the previous year.

Taxation

Total tax charges increased $92m, to $282m. The increase in tax charges was due to higher operating profits and withholding tax on dividends by subsidiaries. The prior year also benefited from the recognition of higher deferred tax credit of $51m in DRC compared with only $36m in Tanzania during the current year.

Profit after tax  

Profit after tax, at $415m, increased by 1.8%. This was largely flat compared with the previous year a result of the prior period recognition of a one-off gain of $72m related to the expired indemnity to certain pre-IPO investors and a higher deferred tax credit of $15m and one-off derivative gain of $47m in the prior year, as well as higher tax in the current year. Excluding the prior year benefits from exceptional items and the one-off derivative gain, profit after tax increased 47%.

Basic EPS

Basic EPS was 9.0 cents, reduced from 10.3 cents in the prior year, due to the lower number of average shares in the previous period (EPS impact of 0.5 cents), several one-off gains in the prior year: i) derivative gain of $47m in other finance costs; ii) higher exceptional item benefits of $51m mainly from the recognition of a one-off gain of $72m related to the expired indemnity to certain pre-IPO investors; iii) an increase in tax charges due to higher operating profit and withholding tax on dividends by subsidiaries; and iv) higher non-controlling interests due to higher profit contributions in OpCos with minority shareholdings. Excluding exceptional items and the one-off $47m derivative gain, basic EPS increased 44.5%. The $38m increase in non-controlling interest (up 100.8%), mainly reflects higher profit contributions from OpCos with minority shareholdings, including Airtel Tanzania, Airtel Niger and Airtel Malawi.

Alternative performance measures [1]


Underlying revenue

Underlying revenue growth of 19.4% in constant currency was primarily driven by the combination of 6.9% customer base growth to 118.2 million, and 7.7% ARPU growth. Underlying revenue growth was recorded across all our regions; Nigeria growing by 21.9%, East Africa by 23.5% and Francophone Africa by 10%. Double-digit revenue growth was also achieved across all our service segments, with voice growing 11.0%, data 31.2% and mobile money 35.5%, all in constant currency.

Reported currency revenue growth further accelerated to 15.4% in Q4'21, with constant currency revenue growth of 21.7%.

Underlying EBITDA

Underlying EBITDA, at $1,792m, increased 18.3% in reported currency while in constant currency underlying EBITDA grew by 25.2%. The growth in underlying EBITDA was driven by underlying revenue growth of 19.4% and improved efficiency in operating expenses. Underlying EBITDA margin was 46.1%, an improvement of 181 basis points in reported currency and 210 basis points in constant currency.

Foreign exchange had an adverse impact of $171m on revenue and $86m on underlying EBITDA, reflecting currency devaluations, mainly the Nigerian naira, Zambian kwacha and Kenya shilling, partially offset by appreciation in the Central African franc.

Underlying EBITDA margin in Q4'21 was 47.7%, an improvement of 354 basis points in reported currency and 389 basis points in constant currency.

Tax

The effective tax rate was 43.2% compared to 48.6% in the prior year, largely a result of profit mix changes amongst the OpCos. The effective tax rate is higher than the weighted average statutory corporate tax rate of approximately 33%, largely due to the profit mix between various OpCos and higher withholding tax on dividends by subsidiaries.

The adjusted effective tax rate was 38.2% compared to 38.7% in the previous period.

Exceptional items

An exceptional gain of $50m in the year ended 31 March 2021 consists of (i) a one-time benefit of $20m which represents recognition of revenues pertaining to earlier years on a cumulative catch-up basis, arising out of a settlement agreement entered with a customer in one of the Group's subsidiaries (referred to as the Niger telecom settlement) (ii) a deferred tax credit of $36m in Tanzania, partially offset by (iii) one-off costs of $6m in one of the Group's subsidiary in Francophone Africa. Exceptional items for the year ended 31 March 2020 mainly consisted of a $72m gain related to the expired indemnity to certain pre-IPO investors and a deferred tax credit of $51m in DRC.

Free cash flow

Free cash flow was $647m, 42.8% higher than last year due to the combination of an increase in underlying EBITDA and slightly lower capex (due to logistical challenges during the Covid-19 pandemic). This benefit was partially offset by an $81m increase in income tax paid resulting from higher operating profits.

EPS before exceptional items

Restated EPS before exceptional items was 8.2 cents, an increase of 18.2% on last year, with higher profits more than offsetting the increase in other finance costs due to the recognition of a $47m derivative gain in the prior period, higher non-controlling interest due to higher profit in OpCos with minority shareholdings, and an increase in tax charges due to the higher operating profit and withholding tax on the dividends by subsidiaries. Excluding the one-time derivative gain of $47m, restated EPS grew by 44.5%. The increase in non-controlling interest by $38m (100.8%) is due to higher profits in several OpCos with minority shareholdings, including Airtel Tanzania, Airtel Niger and Airtel Malawi.

Leverage

Leverage (net debt to underlying EBITDA) improved to 2.0x (from 2.1x at 31 March 2020) despite investing $247m of intangible capex to renew licences in two of our largest markets, Nigeria and Uganda, and acquiring additional spectrum across a few of our markets. The increase in underlying EBITDA more than offset the increase in net debt.

 

Covid-19

The Covid-19 pandemic has contributed to a rapid acceleration of already existing macro trends across the countries where we operate, with people, businesses and governments seeking access to more and better connectivity and improved financial inclusion.

These challenging times have shown that the telecoms industry is a key and essential service for these economies, allowing customers to work remotely, reduce their travel, keep connected and have access to affordable entertainment and financial services.

Covid-19 presented significant challenges to the business, particularly during the initial phase of the pandemic when mobile money and services growth slowed. However, the actions taken by the board in Q1 enabled the continued execution of our strategy, including meeting increased customer demand for data, mobile money and mobile services. We say a huge thank you to all our people, who even during lockdowns and in times of national crisis managed to keep our distribution channels available and our networks fully operational despite increased demand. We also pay tribute to our business partners who continued to deliver their services despite numerous logistical challenges, and to the governments and regulators who continued to support the industry and helped facilitate our continued support to the economies of these countries and the communities we serve.

At the beginning of the pandemic, which coincided with the start of our financial year, most governments in the countries where we operate acted swiftly to implement and enforce restrictions on the movement of people to prevent contagion. These swift actions, along with low population density, less frequent travel, and local experience in dealing with contagious diseases, resulted in lower infection rates in sub-Saharan Africa relative to some other regions. The Covid pandemic eased during the course of the year, and with that came some easing of restrictions and improvement of local economies, although many consumers still feel cautious about social and working habits. More recently we have seen a surge in cases. Thus far, this has had no adverse impact on the business, though we will continue to monitor the situation closely.  

Around the world the vaccination effort has started, with many governments hinting at a possible significant easing of social distancing rules and travel restrictions this year, though it looks like Africa may lag other economies in attaining full vaccination cover. Despite the resilience demonstrated by our business during the year, we are constantly monitoring how the situation is evolving to identify key risks and put in place adequate mitigation plans to minimise any potential disruptions.

The Group will continue to focus on ensuring the safety of our employees, our outsourced partners and our customers; ensuring that our network and distribution channels remain fully operational and available; ensuring that our customers continue to have access to financial services and ensuring that at Group level we are in the right financial position to meet our financial obligations at all times.

SAFETY: The Covid-19 crisis has led to profound changes in operating environments across our markets and throughout the last year, as a key priority, we continued to reinforce health and safety measures for all our employees, for outsourced partners and for our customers. All our offices continue to offer the option of remote working, or working in shifts and with social distancing practices, depending upon the critical needs of individual functions. Our OpCos still have a large percentage of employees working from home with increased digital access to enable a seamless workflow. All employees continue to be on full pay and, along with their family members, continue to receive full medical insurance cover which includes any diagnostic testing, associated physician visits and vaccination cost related to Covid-19. We have also granted immediate paid medical leave for any employees diagnosed with Covid-19. More recently we launched an employee assistance programme which allows our employees access to free consultations with mental healthcare professionals. The aim of this programme is to help employees achieve mental well-being by ensuring harmony between work and personal life and by providing access to support when employees need to speak to someone.

The outsourced staff in our call centres have all been given the option and equipment to either work from home with strict data security protocols, or if necessary, from the office following strict social distancing practices and regulatory guidelines. Protective equipment and hand sanitisers have also been made available within our shops to keep both our staff and customers safe.

The safety of our customers is paramount to us. We have delivered a range of educational digital campaigns explaining best practices during the Covid-19 outbreak, and the importance of being safe. We have significantly enhanced our self-care mobile app by adding features to enable customers to self-service, removing the need for a visit to a shop or an agent. We have also made a number of educational websites accessible free of charge to give students continuous access to quality education. Our staff across all our OpCos have also generously contributed and sacrificed from their salaries a total of $362k, which we have matched like-for-like as a company and donated to the respective governments to support the communities where we operate.

NETWORK: for many of our customers our network remains the main source for their social interactions, their work and entertainment. The key business continuity plans we implemented at the start of the pandemic ensured that both active and passive maintenance services could be safely carried out even when the movement of people was restricted. During an increase in data traffic of more than 74%, and voice traffic of more than 29% our network did not experience any significant disruption.

DISTRIBUTION: ensuring customers retain access to our services remains a key priority for us. When lockdown restrictions were implemented, we increased stock levels of SIM cards and recharge vouchers to ensure continued availability in our shops and enable customers to buy recharges whenever convenient. We have also encouraged customers to use digital methods of recharge, including through Unstructured Supplementary Service Data (USSD), bank portals or our app. In April 2020 we launched the new MyAirtel
self-care app in all 14 countries. Using the app, a customer can check airtime or bundles and purchase them using Airtel Money or any credit or debit cards. It also has various Airtel Money features so that customers can send money to Airtel and other operators, pay bills, pay merchants, scan and pay using Airtel's or Mastercard's QR codes and virtual cards, and use Airtel Money and e-recharge to minimise the impact of any possible disruption to our distribution network. We have pushed the e-recharge scheme even further by allowing customers to e-recharge both friends' and loved ones' accounts, for which they also receive benefits in return. As lockdown restrictions have eased, we have been able to expand our distribution, in line with our strategy, and we continued to carry higher stock levels to mitigate the risks that possible future restrictions on the movement of people could have on our stock levels and the ability of customers to access our recharge vouchers.

MOBILE MONEY: during the initial phase of the pandemic, mobile money revenue growth slowed to 26.3% as the business was impacted by social distancing measures and non-essential service closures, reducing customers' ability to deposit and withdraw cash. Additionally, several governments asked mobile money operators to waive fees on certain transactions, including person-to-person and merchant payments. Afterwards, as lockdown restrictions were generally eased and nearly all fees on transactions reinstated, revenue growth for the full year rebounded to 35.5%, reaching 38.7% in Q4, with mobile money contributing over 10.6% of Group revenue in the quarter.

LIQUIDITY and CAPEX: our financial position continued to improve during the year. Free cash flow increased 42.8% during the financial year and underlying EBITDA margin continued to improve by 210 basis points to 46.1%. Our net debt to underlying EBITDA ratio improved to 2.0x, despite investing $247m of intangible capex to renew licences in two of our largest markets, Nigeria and Uganda, and acquiring additional spectrum across several markets. Our cash balances, in conjunction with more than $1.1bn of committed undrawn facilities, ensure we can continue to meet our financial obligations. We have $2.4bn in long-term bonds with the first repayment of $879m (€750m) due in May 2021 which will be paid through a mix of cash held as well as from the proceeds of a $500m inaugural multi-bank long-term facility (part of the $1.1bn undrawn facilities mentioned above) entered into by Airtel Africa plc in April 2021. Post this repayment, only $1.5bn of long-term bonds will remain outstanding for the Group, with the next major bond repayment of $505m not due until March 2023. In recent months we have announced several transactions including asset monetisation through tower sales and strategic initiatives to unlock value in our mobile money business, amounting to c$400m of expected proceeds to be received which will further improve our financial position and continue our deleveraging. Additionally, we have agreed longer payment terms of up to around 12 months with strategic vendors in certain markets to facilitate continued investment in modernising the network, while also increasing liquidity.  

We have continued to invest in our network with tangible capex spend for the year of $614m. This was slightly below our committed spend of between $650m to $700m due largely to the impact of import logistics and on-field deployment challenges during the pandemic. Our capex guidance for the next financial year remains in the range of $650m to $700m as we continue to invest in our network and distribution.

We have identified several ways to retain cash, reduce costs and mitigate risks from Covid-19. In addition, we have continued to invest in revenue driving expenditures, while reducing discretionary spend.

See pages 27 for our going concern assessment.

FOREIGN EXCHANGE: The global economic slowdown combined with lower oil and commodity prices has resulted in currencies devaluing across our markets, including the Nigerian naira, Kenyan shilling and Zambian kwacha. By far our largest exposure is in Nigeria, which represents 40% of our revenue and 47% of underlying EBITDA. On a 12-month basis, we estimate that a 1% Nigerian naira devaluation will have a negative $14m impact on revenue, $8m on underlying EBITDA and $6m on finance costs.

 

Other significant updates 

Post year end announcement of appointment of new CEO, and other senior executive changes

On 29 April 2021, Airtel Africa announced that Olusegun "Segun" Ogunsanya, managing director and chief executive officer Airtel Nigeria is to succeed Raghunath "Raghu" Mandava, as managing director and chief executive officer following Raghu Mandava's informing the Board of his intention to retire. Segun Ogunsanya will join the Board of Airtel Africa plc with effect from 1 October 2021. 

Segun Ogunsanya joined Airtel Africa in 2012 as managing director and chief executive officer Airtel Nigeria and has been responsible for the overall management of our operations in Nigeria, our largest market in Africa. Segun has more than 25 years' business management experience in banking, consumer goods and telecoms. Before joining Airtel in 2012, Segun held leadership roles at Coca-Cola in Ghana, Nigeria, and Kenya (as managing director and chief executive officer). He has also been the managing director of Nigerian Bottling Company Ltd (Coca-Cola Hellenic owned) and Group head of retail banking operations at Ecobank Transnational Inc, covering 28 countries in Africa. He is an electronics engineer and also a chartered accountant.

Raghu Mandava will be retiring as managing director and chief executive officer, as a director of Airtel Africa plc and as a member of the Market Disclosure Committee on 30 September 2021. Arrangements have been made to ensure a smooth transition of responsibilities. Following his cessation of employment at Airtel Africa, Mr. Mandava will be available to advise the Chairman, the Airtel Africa Board and the newly appointed managing director and chief executive officer for a 9-month period.

Jaideep Paul, chief financial officer, has been appointed as an executive director and will join the Board of Airtel Africa plc with effect from 1 June 2021.

Strategic investments in our mobile money business by The Rise Fund and Mastercard

In March, Airtel Africa signed agreements with both TPG's The Rise Fund and Mastercard who will invest $200m and $100m respectively into Airtel Mobile Commerce BV ("AMC BV"), a wholly owned subsidiary of Airtel Africa plc. AMC BV is the holding company for several of Airtel Africa's mobile money operations; and is intended to own and operate the mobile money businesses across all of Airtel Africa's 14 operating countries.

These transactions value Airtel Africa's mobile money business at $2.65 billion on a cash and debt free basis. The Rise Fund and Mastercard will each hold a minority stake in AMC BV upon completion of the transactions, with Airtel Africa continuing to hold the remaining majority stake. The transactions are subject to customary closing conditions including necessary regulatory filings and approvals, as necessary, and the inclusion of specified mobile money business assets and contracts into AMC BV.

Alongside the investment, the Group and Mastercard also signed a new commercial framework agreement and detailed commercial arrangements which will deepen our commercial partnerships across numerous areas including card issuance, payment gateway, payment processing, merchant acceptance and remittance solutions, amongst others.

It is the aim of Airtel Africa to explore the potential listing of the mobile money business within four years. The Group is open to the possibility of further minority investments into Airtel Money, up to a total of 25% of the issued share capital of AMC BV. There can be no certainty that further transactions will be concluded, or as to the final terms of any transactions.

The proceeds from The Rise Fund and Mastercard's investments in AMC BV will be used to reduce Group debt and invest in network and sales infrastructure in the respective operating countries.

Agreements for tower sales in Madagascar and Malawi and potential tower sales in Chad and Gabon

In early March, the Group signed agreements to sell its telecommunications tower companies in Madagascar and Malawi to Helios Towers plc ("Helios Towers"), a leading independent telecommunications infrastructure company in Africa. The Group's tower portfolios in these two markets together comprise 1,229 towers which form part of the Group's wireless telecommunications infrastructure network.

These transactions, comprising two separate agreements, one in respect of each jurisdiction, are subject to customary closing conditions including required regulatory approvals and are not inter-conditional on each other. The transactions are expected to close in or around calendar Q4 2021.

The aggregate gross consideration for the transactions is expected to be approximately $108m. Under the terms of the transactions, the Group's subsidiaries will continue to develop, maintain and operate their equipment on the towers under separate lease arrangements, largely made in local currencies, with Helios Towers. In addition, as part of the transactions, the Group has agreed to build to suit commitments with Helios Towers for an additional 195 sites across Madagascar and Malawi over the three years following completion, for which a further $11m of consideration is payable.

In addition, Airtel Africa has also entered into exclusive Memorandum of Understanding agreements for the potential sale of its tower assets in Chad and Gabon with Helios Towers ("proposed transactions"). These proposed transactions are subject to the signing of definitive legal agreements for sale, including customary closing conditions such as required regulatory approvals. It is envisaged that the proposed transactions will also incorporate lease arrangements with Helios Towers and build to suit commitments in Chad and Gabon.  The proposed transactions are not inter-conditional and are expected to close before the end of our fiscal year 2022.

The Group expects to disclose consideration details for the proposed transactions upon signing of the acquisition agreements in each market. The Group's tower portfolios in the two markets of the proposed transactions together comprise c.1,000 towers which form part of the Group's wireless telecommunications infrastructure network.

These transactions and proposed transactions are the latest strategic divestment of the Group's tower portfolio as it focusses on an asset-light business model and on its core subscriber-facing operations.

The proceeds from the transactions and proposed transactions will be used to reduce Group external debt and to invest in network and sales infrastructure in the respective operating countries.

Dividend

The Board has recommended a final dividend of 2.5 cents per ordinary share. The proposed final dividend will be paid on 23 July 2021 to all ordinary shareholders who are on the register of members at the close of business on 25 June 2021. We paid an interim dividend of 1.5 cents per ordinary share in December 2020.

In October 2020 the Board approved a new progressive dividend policy during the period due to the combination of continued strong business performance, significant opportunities to invest in future growth and the aim to continue to reduce leverage. The newly adopted dividend policy aims to grow the dividend annually by a mid to high single digit percentage from a base of 4 cents per share for FY 2021, until reported leverage (calculated as net debt to underlying EBITDA) falls below 2.0x. At the point when reported leverage (calculated as net debt to underlying EBITDA) is below 2.0x, the Board will reassess the dividend policy in the light of the prevailing growth outlook for the Group.

New SIM registration rules in Nigeria

Following a directive issued by the Nigerian Communications Commission (NCC) on 15 December 2020 to all Nigerian telecom operators, Airtel Nigeria has been working with the government to ensure that all our subscribers provide their valid National Identification Numbers (NINs) to update SIM registration records.

Initially, new customer acquisitions were barred until significant progress had been made on linking the active customer base with verified NINs. Natural churn in the customer base led to a loss of 2.5 million active mobile customers in the final quarter of the year, however the financial impact has been minimal, with continued revenue growth in Nigeria, due largely to the significantly lower ARPU of the churned base and increased usage by the active base. In April, the NCC announced that it would allow new customer enrolment to recommence from certified outlets. Airtel Nigeria has so far received interim approvals for c800 outlets and new customer registrations have recommenced in those outlets accordingly.

The directive set an initial deadline for customers to register their NIN with their SIM of 30 December 2020. This was subsequently moved several times with the latest deadline set for 30 June 2021.

We have made significant progress on capturing existing NINs and building the database in collaboration with National Identity Management Commission (NIMC). To date, out of Airtel Nigeria's 42.0 million active customers, we have collated NIN information for 23.2 million active mobile customers. To complete the registration process, we must also verify the NIN information we have received from our subscribers with the NIMC.

For the still significant proportion of the population, and our customers, that do not have a NIN we have opened enrolment centres in collaboration with the NIMC and we are in the process of rolling out thousands of devices to further NIN enrolment. We continue to work closely with the government to ensure full compliance.

Post year end refinancing

In April 2021, Airtel Africa agreed a new $500m loan facility with a group of relationship banks.

The new committed facility consists of a combination of a revolving credit facility and term loans with tenor of up to 4 years. The facility will be used to partially refinance the Group's €750m euro denominated bond ($879m) due 20 May 2021. The balance of the euro denominated bond will be repaid with existing Group cash to reduce gross debt and associated interest costs.

The new loan facility further strengthens the core liquidity of the Group. It also has prepayment flexibilities that will allow the Group to optimise the efficiency of its capital structure with the free cash flows and cash receipts anticipated over the next 12 months following the recent announcements related to tower sales and mobile money minority investments.

This new loan facility establishes a standalone credit score for the Group, requiring no parent guarantees from Bharti Airtel.

Licence renewal in Nigeria

In January 2021, Airtel Networks Limited ("Airtel Nigeria"), announced that its application for renewal of the spectrum licences in the 900MHz and 1800MHz bands had been approved by the Nigerian Communications Commission ("NCC"). Pursuant to Section 43 of the Nigerian Communications Act, 2003 and Condition 20 of the Unified Access Service Licence (UASL), Airtel Nigeria applied to renew the UASL (operations licence) and spectrum licences in the 900MHz and 1800MHz bands which would otherwise expire on 30 November 2021.  

Following the application, the NCC offered Airtel Nigeria the opportunity to renew its spectrum licences in the 900MHz and 1800MHz bands for a period of ten years, with effect from 1 December 2021 until 30 November 2031, which Airtel Nigeria accepted. Under the terms of the spectrum licences Airtel Nigeria paid 71.61 billion naira ($182 million) in respect of the licence renewal fees.

The UASL is still under consideration by the NCC and formal confirmation of renewal is expected before the expiry date of 30 November 2021.

New licence in Uganda

In December, Airtel Uganda Limited (Airtel Uganda) was issued with a National Telecom Operator (NTO) Licence following a period of negotiation and transition to a new licensing regime.

The new licence is with effect from 1 July 2020 and is for a period of 20 years, until 30 June 2040. Airtel Uganda will retain all its current spectrum subject to the law and terms of assignment. The scope of services is the provision of basic telecommunication services, infrastructure services, and value-added telecommunication services. In addition, Airtel Uganda commits to achieving coverage of 90% of the geographical boundary of Uganda within five years of the effective date of the licence, with a minimum obligation of providing voice and data services.

Under the terms of the licence Airtel Uganda has paid $74.6m for the first ten years of the licence, which includes VAT of $11.4m. After the first 10 years, Airtel will be invoiced for the licence fee for the remaining 10 years.

Under Article 16 of the NTO, Airtel Uganda is obliged to comply with the sector policy, regulations and guidelines requiring the listing of part of its shares on the Uganda Stock Exchange. The current Uganda Communications (Fees & Fines) (Amendment) Regulations 2020, create a public listing obligation for all NTO licensees, and specifies that 20% be listed within 2 years of the date of the effective date of the licence.

New shareholding requirements in Kenya

On 9 April 2021, the Minister for ICT published an amendment to the National Information Communications and Technology (ICT) Policy Guidelines, 2020 (ICT Policy). The ICT Policy amendment will affect Airtel Africa's Kenya business as follows:

· Airtel Networks Kenya Limited, which currently holds an indefinite exemption from the Minister for ICT, dated 20 March 2013, has 3 years with effect from 9 April 2021 to comply with the requirement to have a 30% local shareholding.

· Airtel Money Kenya Limited, which holds a Content Service Provider Licence from the Communications Authority of Kenya, with effect from November 2020, has 3 years from the date of the licence to comply with the requirement to have a 30% local shareholding.

Under the amended ICT policy, a licensee may apply to the ICT Minister for an extension of time to comply with the requirement, or to obtain an exemption.

New sustainability framework

Our new sustainability framework features in this year's Annual Report. It articulates at the highest level the four pillars of our environmental, social and governance (ESG) strategy, outlining for each of "our business", "our people", "our community" and "our environment" pillars, both the role that we can play, and the focus areas where we can make the biggest difference.

Aligned with our sustainability framework, we have identified the six UN Sustainability Development Goals (SDGs) where we believe we can have the biggest impact. These are delivering Quality Education (SDG 4); Gender Equality (SDG 5); Decent Work and Economic Growth (SDG 8); Industry Innovation & Infrastructure (SDG 9); Reduced Inequalities (SDG 10) and Responsible Consumption & Production (SDG 12).

We have also defined our ESG materiality matrix through in-depth analysis of industry benchmarks and best practice, ESG ratings and reporting frameworks.

We are currently in the process of engaging with representatives of all our stakeholder groups to review our approach and findings.

The full details of our sustainability framework, materiality matrix, and the genuine, meaningful and measurable contribution we can make to our six key SDGs are laid out in this years' Annual Report.

In Q3'22, we will be publishing the measurable medium to long-term goals we set ourselves. Work is underway to identify the programmes and investments needed, along with roll-out plans and key milestones on our journey towards these goals.

We are also committing to report annually on our progress, and in 2022, we will be publishing our first Sustainability Report, which will be prepared in compliance with Global Reporting Initiative and Task Force on Climate-Related Financial Disclosures frameworks.

At Airtel Africa, transforming lives is more than just our purpose, it is our DNA. The sustainability framework we have established, and the detailed plans we will be publishing in October will build upon the strong foundation of work we are already undertaking of an environmental, social and governance nature, not just at Group level, but in each of our local operations.

 

 

 

Directorate change

On 27 October 2020, we announced the appointment of Kelly Bayer Rosmarin as a non-executive director with immediate effect.

Ms. Bayer Rosmarin's appointment was by nomination of the controlling shareholder pursuant to the terms of the relationship agreement dated 17 June 2019 between the Company, Bharti Airtel, Airtel Africa Mauritius Limited, the majority shareholder and an indirect subsidiary of Bharti Airtel, and Bharti Telecom. Ms. Bayer Rosmarin replaced Arthur Lang who stepped down as a non-executive director on the same date.

Ms. Bayer Rosmarin is currently CEO of Singtel Optus and Consumer Australia. She was previously with Commonwealth Bank of Australia, where she held several senior positions and varied portfolios, before being appointed as Group Executive of Institutional Banking and Markets. Ms Bayer Rosmarin is recognised for leveraging technology, data and analytics to develop leading customer services and experience. She was named in the Top 10 Businesswomen in Australia and the Top 25 Women in Asia Pacific Finance and holds a variety of board and advisory responsibilities.

Ms. Bayer Rosmarin has, since February 2019, served as an independent non-executive director on the board of OpenPay, listed on the Australian Securities Exchange, and will continue in that role. Openpay is a payments technology company based in Australia.

Additional spectrum

In June 2020, Airtel Malawi plc was allocated 10 MHz of spectrum in the 2600 band. In October, additional spectrum of 10 MHz in the 2600 band and 5 MHz in the 1800 band was allocated to Airtel Uganda. In December, Airtel Chad received 5 MHz of spectrum in the 900 band and Airtel Zambia received 10 MHz in the 800 band.

Abandonment of merger of Airtel Networks Kenya Limited with Telkom Kenya Limited

In August 2020, Airtel Africa plc announced that its subsidiary Airtel Networks Kenya Limited ("Airtel Kenya") and Telkom Kenya Limited ("Telkom") had decided to no longer pursue completion of an M&A transaction. The transaction was announced in February 2019 and was subject to the satisfaction of various conditions precedent, including regulatory approvals. Despite Airtel Africa plc and Telkom's respective endeavours to reach a successful closure, the transaction had gone through a very lengthy process which led the parties to reconsider their stance.

Partnership with UNICEF

In May 2020, Airtel Africa announced a partnership with UNICEF aimed at providing children with access to remote learning and enabling access to cash assistance for their families via mobile cash transfers. Under this partnership, UNICEF and Airtel Africa will use mobile technology to benefit an estimated 133 million school age children currently affected by school closures in 13 countries across sub-Saharan Africa during the Covid-19 pandemic.

Mobile money

(a)  Partnership with remittance leading institutions

Airtel Africa has entered into several strategic partnerships with MoneyGram, Mukuru and WorldRemit. Through these partnerships, more than 21 million Airtel Money customers in 12 countries can transfer and receive funds across the globe directly from and into their mobile money wallets on their phone. Mobile money service alliances with these leading international money transfer or remittance service providers will extensively enhance customer access to the digital world.

(b)  Partnership with Standard Chartered Bank

In August 2020, Airtel Africa announced a strategic partnership with Standard Chartered Bank, a leading international banking group, to drive financial inclusion across key markets in Africa by providing customers with increased access to mobile financial services. Standard Chartered and Airtel Africa work together to co-create new, innovative products aimed at enhancing the accessibility of financial services and ultimately, better serve people across Africa. In line with this, Airtel Money's customers will be able to make real-time online deposits and withdrawals from Standard Chartered bank accounts, receive international money transfers directly to their wallets, and access savings products amongst other services.

(c)  Partnerships with Mastercard, Samsung and Asante

In September 2020, Airtel Africa announced an expansion of its partnership with Mastercard by launching a Pay-on-Demand payments platform to drive the digital economy across Africa. This Pay-on-Demand platform enables safe, secure, and convenient consumer financing, provided by Asante, on Samsung devices with an embedded Knox security platform, through Airtel Africa's mobile network. The partnership facilitates usage-based payments and builds creditworthiness.

These partnerships align with the Group's strategy of expanding the range and depth of Airtel Money offerings to drive customer growth and penetration.

Information on additional KPIs

An investor relations pack with information on the additional KPIs and balance sheet is available to download on our website at airtel.africa/investors .

 

Strategic overview

The Group provides telecoms and mobile money services in 14 emerging markets of sub-Saharan Africa. Our markets are characterised by huge geographies with relatively sparse populations, high population growth rates, high proportions of youth in the population, low smartphone penetration, low data penetration and relatively unbanked populations. Unique mobile user penetration across the Group's footprint was only 46%, and banking penetration was under 50%. These indicators illustrate the significant opportunity still available to Airtel Africa to enhance both digital and financial inclusion in the communities we serve, enriching their lives at the same time as growing our revenues, profitably, across each of our key services of voice, data and mobile money.

The Group continued to invest in its network and distribution infrastructure to enhance both mobile and connectivity and financial inclusion across our countries of operation. In particular, we continued to invest in expanding our 4G network footprint to increase data capacity in our networks to support future business growth, as well as deploying new sites, especially in rural areas, to enhance coverage and connectivity.

Our 'Win with' strategy describes the six strategic pillars through which we actively work to achieve this. Cutting across these pillars are our commitment to transforming lives, driving sustainable development and acting as a responsible business. We continued to make good progress across each of our core strategic pillars: Win with network, Win with customers, Win with data, Win with mobile money, Win with cost and Win with people.

Win with network

The Group's strategy is to invest in our network by expanding 4G coverage and building capacity to cater for the future needs of our customers and to continue providing them with high-speed data. The expansion of the 4G network across our footprint and connecting rural areas through deployment of new sites continued to be our key focus areas. Our investment in the 4G network through single RAN technology has resulted in both expansion of our 4G coverage and enhanced network's capacity. 76.5% of our total sites are now on 4G, compared to 64.7% in the previous period. We aim to build a leading, modernised network that can provide the data capacity to meet rapidly growing demand, and enhanced connectivity and digitalisation needs of our markets. Our network data capacity increased by 59.4% in the year, reaching 12,000+ TB per day, with additional capacity being added at only very marginal cost. We continued to modernise our network across all our countries of operation, with 89% of our sites on Single RAN.

The Group added over 11,500km of additional fibre, with total fibre now over 54,500km. Furthermore, we have increased the total number of sites connected to fibre (increased by 15.6%) enhancing our network uptime metrics and delivering high-speed data to more of our customers.

The Group also added additional spectrum in a few of our markets. We have added 10 MHz in the 2600 band in Malawi, 10 MHz in the 2600 band and 5 MHz in the 1800 band in Uganda, 5 MHz in the 900 band in Chad and 10 MHz in the 800 band in Zambia. These allocations will help us to maximise network capacity and coverage.

Capital expenditure related to investment activities during the period was $614m, excluding spectrum acquisitions and licence renewal.

Win with customers

Sub-Saharan Africa is characterised by low penetrated markets, with unique subscriber penetration at 46%. The Group continued to build a unique mix of multi-brand and exclusive franchise channels, combined with a simplified and enhanced self-service app to provide a seamless customer onboarding experience. These have enabled us to add customers, resulting in customer base growth of 6.9% for the year. This has also helped us to grow voice revenue by 11.0% in constant currency.

The Group continued its investment in strengthening our distribution network infrastructure, with a focus on rural distribution networks. During the period, the Group expanded its exclusive franchise stores, adding more than 15,400 kiosks and mini-shops as exclusive franchise stores across our footprint.

We are driving loyalty and consumption through our smart product approach and tailored pricing. We provide simple, transparent offerings, 'more for more' bundles offering lower unit prices with longer validity and segmented offers based on balance, usage and type of devices.

The launch of our digital onboarding app has helped us to enhance customer experience; allowing customers to use our services within just a few minutes of the sale of a SIM card. The digital app captures all regulatory requirements, delivering a mostly paperless activation process. Further, the MyAirtel self-care app and our interactive and dynamic IVR (interactive voice response) have further improved customer experience by facilitating both speedier query resolution and digital recharge capabilities.

The Group continues to focus on increasing the adoption of 'more for more' bundles to enhance both usage and ARPU. The Group's smart offerings and attractive pricing proposition led to 16.4% higher usage per customer, contributing to a voice revenue increase of 11.0%.

Win with data

The Group continued to invest in the expansion of our 4G network, adding significant data capacity to the network at only marginal cost, expanding both home broadband and enterprise business services to greater leverage the 4G network; growing data ARPU and data revenue. We continue to focus on increasing smartphone ownership and increasing data usage at scale, largely via smartphone offerings through OEM (Original Equipment Manufacturer) device partnerships, and through expanding our network of smartphone device selling outlets.

Our improved 4G network contributed to an increase in smartphone penetration, in data customers and in up-take of large data volumes, resulting in greater data consumption per customer. Smartphone penetration was up by 1 percentage points to 33% and our data customer base grew by 14.5%, now representing 34.3% of our total customer base.

Data usage per customer reached 2.6 GB per customer (from 1.8 GB per customer) led by an increase in smartphone penetration and expansion of our home broadband and enterprise customers. This helped us grow data revenue 31.2% in constant currency. Growing penetration and usage of 3G and 4G data customers helped us grow data ARPU 8.2%. 4G data usage more than doubled in the year, contributing 62.2% of total data usage on the network in Q4'21.

  Win with mobile money

The Group has continued to drive financial inclusion across its footprint. The low penetration of traditional banking services across our footprint leaves a large footprint of unbanked customers whose needs can be largely fulfilled through mobile money services. We aim to drive the uptake of Airtel Money services in all our markets, harnessing the ability of our profitable mobile money business model to enhance financial inclusion in some of the most 'unbanked' populations in the world.

The Group continued to expand the exclusive distribution network of kiosks, mini-shops and Airtel Money branches, so that customers can access their cash with relative ease. We have increased the number of mobile money agents by 30.7%, kiosks by 68.8% and mobile money branches by 95%. Throughout the year, the expansion of our mobile money product portfolio, both through partnerships with leading financial institutions and through expansion of our merchant ecosystem, have further strengthened our mobile money propositions.

Our distribution expansion and enhanced offerings helped drive 18.5% growth in our mobile money customer base. Our mobile money business now serves over 21.7 million customers, representing 18.3% of our total customer base.

Mobile money continues to be one of our fastest growing service segments, delivering revenue growth of 35.5% for the year. It is an increasingly important part of our business, delivering $51bn of annualised (Q4'21) transaction value and accounting for 10.6% of total revenue in Q4'21.

Mobile money ARPU increased by 6.6% over the year, driven by increased transaction values and higher contributions from merchant payments, cash transactions, P2P transfers and mobile services recharges through Airtel Money.

Win with cost

Our operating cost model is focused on enhancing cost efficiency and digitalisation initiatives. We embrace robust cost discipline and continuously seek to improve processes to deliver one of the highest underlying EBITDA margins in the industry. We use the latest technology to optimally design our network to improve the efficiency of our capital expenditure; enabling us to build large incremental capacities at lower marginal cost.

As we continued to expand our business, various cost efficiency initiatives were undertaken during the year, relating mainly to:
(i) energy and loading cost savings, as we benefit from single RAN network modernisation; (ii) incremental sites at a lower rate;
(iii) remodelling of managed services; and (iv) leased line capacity optimisation and implementation of dynamic and contextual IVR. In addition to these initiatives, we reduced travel and facility expenses during the year due largely to Covid-related restrictions on movements and working from home initiatives.

This has contributed to an expansion of our underlying EBITDA margin by 181 basis points in reported currency and 210 basis points in constant currency. Our underlying EBITDA margin was 46.1% for the year, and operating expenditure as a percentage of revenue improved by 2.0 percentage points.

 

Win with people

Our people continue to be at the centre of everything we do with employees based in 17 countries and a workforce representing 34 nationalities. We share a passion for the way we do business and the lives we transform. Together, we are growing and continue to make a positive impact on the communities and nations we serve.

Our talented and diverse people have continued to demonstrate incredible dedication, resilience and adaptability to deliver business results, despite the challenges faced. More importantly, we worked collaboratively to build and connect our teams.

Gender diversity and inclusion remain a key focus area and we are continuously striving to make further progress on this.

We continue to invest in opportunities for learning and development of our people across all our operations. This was accelerated through the launch of several digital platforms. Building strong functional expertise and capability is a key driver of our performance.

Keeping our people connected and engaged was facilitated through a series of town halls, upward feedback sessions, the annual strategic and award conclave, employee engagement surveys and one-on-ones with senior management.

The Group reward system is based on simple and consistent metrics that drive a high-performance culture. We align our people performance metrics to our business priorities.

Our benefits continue to be aligned with best market practices and include fully paid medical insurance and an employee assistance program which allows our people free consultation to wellbeing and healthcare professionals.

We continue to make strides to be an employer of choice with a diverse and inclusive work environment.

 

Financial review for the year, ended 31 March 2021

Nigeria

Description

Unit of

measure

Year ended

Quarter ended

March-21

March-20

Reported currency
change %

Constant currency
change %

March-21

March-20

Reported currency
change %

Constant currency
change %

Summarised statement of operations

 

 

 

 

 

 

 

 

 

Revenue

$m

1,552

1,373

13.1%

21.9%

422

377

12.0%

22.9%

Voice revenue 1

$m

897

850

5.6%

13.9%

240

234

2.9%

12.9%

Data revenue

$m

549

435

26.3%

36.2%

152

120

26.4%

38.8%

Other revenue 1

$m

106

88

20.2%

29.7%

30

23

29.0%

41.7%

Underlying EBITDA

$m

839

744

12.8%

21.6%

232

209

10.6%

21.5%

Underlying EBITDA margin

%

54.1%

54.2%

(15) bps

(14) bps

54.8%

55.5%

(68) bps

(65) bps

Depreciation and amortisation

$m

(236)

(183)

28.9%

38.9%

(60)

(47)

26.8%

41.0%

Exceptional item

$m

-

5

(100.0%)

(100.0%)

-

-

0.0%

0.0%

Operating profit 2

$m

602

565

6.5%

14.9%

172

162

6.0%

15.9%

Capex

$m

275

325

(15.3%)

(15.3%)

97

145

(33.4%)

(33.4%)

Operating free cash flow

$m

564

419

34.6%

53.6%

135

64

110.9%

170.6%

Operating KPIs

 

 

 

 

 

 

 

 

 

ARPU

$

3.0

2.9

2.2%

10.2%

3.3

3.1

6.6%

17.0%

Total customer base

million

42.0

41.8

0.5%

 

42.0

41.8

0.5%

 

Data customer base

million

17.7

16.7

5.6%

 

17.7

16.7

5.6%

 

(1)   Voice revenue and other revenue includes inter-segment revenue of $1m and $2m respectively in the year ended 31 March 2021. Excluding inter-segment, voice revenue was $896m and other revenue was $104m in the year ended 31 March 2021.

(2) The operating profit in above table includes a CSR (Corporate social responsibility) expense of $0.7m in the year ended 31 March 2021 and $1m in the year ended 31 March 2020.

Revenue grew by 13.1% in reported currency, with constant currency growth of 21.9% offset by Nigerian naira devaluation of 10% (YoY). Reported currency revenue grew by 12.0% in Q4'21, and 22.9% in constant currency.

Voice revenue grew by 13.9% in the year. This was driven by customer base growth of 0.5%, and voice ARPU growth of 2.9%, supported by an increase in voice usage per customer, up 12.4%. The customer base growth was supported by continued expansion of our distribution network and network infrastructure, with a slowdown in customer base growth in the second half of the year attributable to new "Know-Your-Customer" (KYC) requirements in Nigeria. In Q4'21, voice revenue grew by 12.9% in constant currency, mainly driven by voice ARPU growth of 7.5%, largely due to increased voice usage per customer.

Data revenue continues to be the key driver of Nigeria revenue growth, with constant currency revenue growth of 36.2%. This was driven by 5.6% growth in the number of data customers, and 15.3% growth in data ARPU. The data customer base growth was supported by expansion of our 4G network, with 84% of total sites now on 4G. Data customer penetration increased to 42.1%, up
2 percentage points from the prior year. Data ARPU increased 15.3% from increased data usage per customer, which was up 47.4% in the year from 1.9 GB per month to 2.8 GB per month. Q4'21 data usage was 3.2 GB per customer. Data revenue accounted for 35.4% of total revenue in the year, up 3.7 percentage points from 31.7% in the prior year.

Other revenue grew by 29.7%, with the main contribution coming from growth in VAS revenue, led by airtime credit services.

Underlying EBITDA grew by 12.8% to $839m in reported currency, with a constant currency growth of 21.6%. At 54.1%, the underlying EBITDA margin was broadly in line with the prior year. The slight decline year on year in the Q4 underlying EBITDA margin to 54.8% (from 55.5%) was due to increased operating expenses, largely from the rollout of new sites (over 1,400 added in the year).

Capital expenditure was $275m, marginally lower than the prior year, largely due to logistical challenges faced during the pandemic. Operating free cash flow was $564m, up 53.6%, from the combination of underlying EBITDA growth and capex reduction.

 

East Africa 1

Description

Unit of

measure

Year ended

Quarter ended

March-21

March-20

Reported currency
change %

Constant currency
change %

March-21

March-20

Reported currency
change %

Constant currency
change %

Summarised statement of operations

 

 

 

 

 

 

 

 

 

Revenue 2

$m

1,381

1,201

15.0%

23.5%

358

310

15.4%

23.9%

Voice revenue 3

$m

650

606

7.4%

15.4%

164

153

7.6%

15.5%

Data revenue

$m

354

307

15.4%

23.9%

92

82

12.2%

20.5%

Mobile money revenue 4

$m

291

213

36.1%

47.2%

79

58

36.4%

47.8%

Other revenue 3

$m

150

131

14.2%

20.8%

38

32

18.1%

24.7%

Underlying EBITDA

$m

631

485

30.0%

40.2%

168

125

34.4%

44.0%

Underlying EBITDA margin

%

45.7%

40.4%

529 bps

541 bps

47.0%

40.3%

665 bps

653 bps

Depreciation and amortisation

$m

(221)

(229)

(3.7%)

2.5%

(57)

(55)

2.3%

8.9%

Exceptional item

$m

-

10

(100.0%)

(100.0%)

-

-

0.0%

0.0%

Operating profit 5

$m

408

266

53.7%

67.8%

111

70

59.8%

72.3%

Capex

$m

249

181

37.5%

37.5%

81

61

33.9%

33.9%

Operating free cash flow

$m

382

304

25.6%

42.0%

87

64

34.8%

54.3%

Operating KPIs

 

 

 

 

 

 

 

 

 

ARPU

$

2.3

2.2

2.5%

10.0%

2.3

2.2

5.2%

13.0%

Total customer base

million

53.1

48.6

9.2%

 

53.1

48.6

9.2%

 

Data customer base

million

16.2

13.3

21.5%

 

16.2

13.3

21.5%

 

Mobile money customer base

million

18.0

15.5

16.4%

 

18.0

15.5

16.4%

 

(1) The East Africa business region includes Kenya, Malawi, Rwanda, Tanzania, Uganda and Zambia.

(2) Revenue includes intra-segment eliminations of $64m for the year ended 31 March 2021 and $56m for the year ended 31 March 2020.

(3)  Voice revenue and other revenue includes inter-segment revenue of $1m and $3m respectively in the year ended 31 March 2021. Excluding inter-segment, voice revenue was $649m and other revenue was $147m in the year ended 31 March 2021.

(4) Mobile money revenue post intra-segment eliminations with mobile services was $227m for the year ended 31 March 2021 and $157m for the prior year.

(5) Operating profit includes a CSR (Corporate social responsibility) expense of $1.7m in the year ended 31 March 2021.

 

East Africa delivered a strong business performance with revenue growth of 15.0% in reported currency and 23.5% in constant currency. The growth in revenue was evident across all key business segments ; with voice up 15.4%, data up 23.9% and mobile money growing 47.2% in constant currency. Constant currency revenue growth of 23.5% was partially offset by currency devaluation, mainly in Zambia and Kenya. Reported currency revenue grew by 15.4% in Q4'21, and 23.9% in constant currency.

Voice revenue grew by 15.4% for the year, driven by customer base growth of 9.2% and voice ARPU growth of 2.9%. Customer base growth was driven largely by the expansion of our distribution network, with the number of activating outlets up 15.5%. Voice ARPU growth was driven largely by the increase in voice usage per customer of 18.3%, to 330 minutes per customer per month. In Q4'21, voice revenue grew by 15.5% in constant currency, mainly driven by the customer base growth of 9.2% and ARPU growth of 5.3%.

Data revenue grew by 23.9%, driven by data customer base growth of 21.5% and data ARPU growth of 1.1%. Growth was recorded across all OpCos in the region, driven by expansion of our 4G network infrastructure, with 76% of sites now on 4G in East Africa, compared with 66% during the prior year. Total data usage on the network grew by 70.7%, led by the 39.3% increase in data usage per customer per month to 2.7 GB per customer from 1.9 GB in the prior year, and from the data customer base growth detailed above.

During the period "pay-as-you-go" (PAYG) tariffs in certain markets were revised and this resulted in change of revenue allocation of bundled products between voice and data in these tariffs. On a like-for-like basis, voice and data revenue growth was 11% and 32.6% respectively.

Mobile money revenue grew by 47.2%, largely driven by growth in Tanzania, Zambia, Uganda and Malawi. Revenue growth was driven by 16.4% growth in the customer base and 28.6% growth in the transaction value per customer, thanks largely to the expansion of our distribution network. The increase in transaction value per customer was the main contributor to mobile money ARPU growth of 16.0%. Consistent with the year, Q4 posted mobile money revenue growth of 47.8% in constant currency.

Underlying EBITDA margin was 45.7%, an improvement of 529 basis points in reported currency and 541 basis points in constant currency, led by both accelerated growth in revenue and efficiency improvement in operating expenses.

Capital expenditure was $249m, up 37.5% due to planned network expansion. Operating free cash flow was $382m, up 42%, largely due to the growth in underlying EBITDA.

 

Francophone Africa 1

Description

Unit of

measure

Year ended

Quarter ended

March-21

March-20

Reported currency
change %

Constant currency
change %

March-21

March-20

Reported currency
change %

Constant currency
change %

Summarised statement of operations

 

 

 

 

 

 

 

 

 

Underlying revenue 2

$m

964

859

12.3%

10.0%

260

215

20.9%

15.9%

Voice revenue 3

$m

541

525

2.9%

0.5%

143

127

12.4%

7.3%

Data revenue

$m

254

189

34.4%

31.9%

70

51

38.6%

33.0%

Mobile money revenue 4

$m

110

93

18.1%

15.0%

31

25

24.1%

18.2%

Other revenue 3

$m

96

86

11.5%

11.0%

25

22

14.8%

12.6%

Underlying EBITDA

$m

364

292

24.6%

21.7%

110

70

55.7%

49.1%

Underlying EBITDA margin

%

37.7%

34.0%

372 bps

363 bps

42.1%

32.7%

942 bps

935 bps

Depreciation and amortisation

$m

(207)

(189)

9.7%

7.7%

(52)

(47)

11.7%

8.1%

Exceptional item 5

$m

14

(12)

(217.8%)

(209.6%)

1

-

0.0%

0.0%

Operating profit 6

$m

170

91

86.7%

80.5%

59

23

149.6%

131.6%

Capex

$m

88

133

(33.9%)

(33.9%)

32

40

(19.3%)

(19.3%)

Operating free cash flow

$m

276

159

73.2%

68.2%

78

30

154.3%

136.7%

Operating KPIs

 

 

 

 

 

 

 

 

 

ARPU

$

3.8

3.7

3.6%

1.5%

3.9

3.6

8.6%

4.1%

Total customer base

million

23.1

20.2

14.5%

 

23.1

20.2

14.5%

 

Data customer base

million

6.7

5.4

24.6%

 

6.7

5.4

24.6%

 

Mobile money customer base

million

3.6

2.8

30.6%

 

3.6

2.8

30.6%

 

(1) The Francophone Africa business region includes Chad, Democratic Republic of the Congo, Gabon, Madagascar, Niger, Republic of the Congo, and The Seychelles.

(2) Underlying revenue includes intra-segment eliminations of $36m for the year ended 31 March 2021 and $34m for the year ended 31 March 2020. It also excludes a one-time exceptional revenue of $20m relating to a settlement in Niger in the year ended 31 March 2021.

(3)  Voice revenue includes inter-segment revenue of $3m, excluding inter-segment the voice revenue was $538m in the year ended 31 March 2021. Voice revenue represents underlying revenue excluding the impact of a settlement in Niger ($20m).

(4 ) Mobile money revenue post intra-segment eliminations with mobile services was $74m in the year ended 31 March 2021 and $59m in the year ended 31 March 2020.

(5 ) Operating exceptional items in the year ended 31 March 2021 includes exceptional revenue from a one-time settlement in Niger amounting to $20m.

(6) Operating profit includes a CSR (Corporate Social Responsibility) expense of $1.1m in the year ended 31 March 2021.

 

Our performance in Francophone Africa improved through the year, with reported underlying revenue growth of 12.3% and constant currency growth of 10%. The growth in reported currency is higher than in constant currency due to appreciation of the Central African franc. Performance across the region was mixed, with revenue growth in Chad, Democratic Republic of the Congo (DRC), Gabon and Niger partially offset by marginal decline in other countries in the region. In Q4, revenue growth was significantly higher, at 20.9% in reported currency and 15.9% in constant currency.

Voice revenue growth was broadly flat at 0.5%. This marginal underlying growth reflects 14.5% growth in the customer base (largely coming later in the year) balanced with a decline in voice ARPU due to a reduction in roaming revenue and interconnect rates. Q4'21 reflected an improvement in voice revenues of 7.3%, driven by customer base growth of 14.5% offset by a slight decline in voice ARPU of 3.6%, mainly due to reductions in roaming revenue and interconnect rates in Gabon and Chad. Q4'21 total voice minutes on the network grew by 27.0% due to increased voice usage per customer (up 14.1%) and customer base growth.

Data revenue grew by 31.9% driven by customer growth of 24.6% and data ARPU growth of 2.8%. Data usage per customer increased 51.7% to 1.9 GB per month, from 1.3 GB per customer per month in the prior year. The data customer base growth was driven largely by the expansion of our 4G network, with 60% of total sites now on 4G, and the success of our "more for more" bundle offerings, driving data uptake by customers.

Mobile money revenue grew by 15.0% largely driven by a 30.6% increase in the mobile money customer base, supported by the expansion of our distribution network through more agents (up 29.6%) and Airtel Money branches (up 91.5%).

Underlying EBITDA margin was 37.7% during the period, an improvement of 363 basis points in constant currency. The Q4'21 underlying EBITDA margin of 42.1%, reflects an improvement of 9.4 percentage points in constant currency, driven by revenue growth and increased efficiency in operating expenses.

Capital expenditure was $88m, lower for the year, mainly due to a significant network modernisation project last year. Operating free cash flow was $276m, up 68.2% year on year, due to the improvement in underlying EBITDA and lower capital expenditure.

 

Mobile services

Description

Unit of

measure

Year ended

Quarter ended

March-21

March-20

Reported currency
change %

Constant currency
change %

March-21

March-20

Reported currency
change %

Constant currency
change %

Summarised statement of operations

 

 

 

 

 

 

 

 

 

Underlying revenue 1

$m

3,592

3,210

11.9%

17.6%

955

844

13.1%

19.3%

Underlying EBITDA

$m

1,639

1,372

19.5%

26.5%

456

366

24.7%

32.5%

Underlying EBITDA margin

%

45.6%

42.7%

289 bps

323 bps

47.7%

43.3%

442 bps

477 bps

Depreciation and amortisation

$m

(654)

(595)

10.0%

14.6%

(165)

(146)

13.3%

18.1%

Operating exceptional items

$m

14

3

307%

508.4%

1

-

0.0%

0.0%

Operating profit 2

$m

995

780

27.6%

37.0%

291

220

32.6%

42.5%

Capex

$m

580

626

(7.4%)

(7.4%)

185

240

(22.9%)

(22.9%)

Operating free cash flow

$m

1,059

746

42.0%

57.9%

271

126

115.5%

152.2%

Operating KPIs

 

 

 

 

 

 

 

 

 

Mobile voice

 

 

 

 

 

 

 

 

 

Voice revenue 3

$m

2,083

1,970

5.8%

11.0%

547

510

7.2%

12.8%

Customer base

million

118.2

110.6

6.9%

 

118.2

110.6

6.9%

 

Voice ARPU

$

1.5

1.6

(4.6%)

0.1%

1.5

1.6

(1.0%)

4.2%

Mobile data

 

 

 

 

 

 

 

 

 

Data revenue

$m

1,157

930

24.3%

31.2%

315

253

24.2%

31.7%

Data customer base

million

40.6

35.4

14.5%

 

40.6

35.4

14.5%

 

Data ARPU

$

2.5

2.4

2.5%

8.2%

2.6

2.5

5.5%

11.8%

 (1) Mobile service underlying revenue after intersegment eliminations amounted to $3,587m in the year ended 31 March 2021 and $3,207m in the year ended 31 March 2020. It also excludes a one-time exceptional revenue of $20m relating to a settlement in Niger in the year ended 31 March 2021.

(2) Operating profit includes a CSR (Corporate Social Responsibility) expense of $3.5m in the year ended 31 March 2021 and $1m in the year ended 31 March 2020.

(3)  Voice revenue represents underlying revenue excluding the impact of a settlement in Niger ($20m).

 

Underlying revenue for mobile services grew by 11.9% in reported currency and by 17.6% in constant currency, with both voice and data revenue contributing to the growth.

Voice revenue increased 11.0% in constant currency, driven by customer base growth of 6.9% driven by expansion of the distribution network and network infrastructure. The s light slowdown in customer base growth was due to new KYC regulations in Nigeria, excluding Nigeria the customer base grew by 10.7%. Voice usage per customer increased 16.4% to 234 minutes per customer, resulting in overall minutes growth of 29.1%. Voice revenue in Q4'21 grew by 12.8% with an improved performance across all regions.

Data revenue grew by 31.2% in constant currency, largely driven by an increase in the data customer base and data usage growth. The data customer base grew by 14.5%, driven by expansion of our 4G network infrastructure, with 76.5% of sites now operating on 4G, compared with 64.7% in the prior year, and increased smartphone penetration up 1 percentage points. The data customer base as a proportion of total customers reached 34.3%, an increase of 2.3 percentage points. Total data usage on our network grew by 74.8%, led by an increase in data usage per customer and the growth of the data customer base. Data usage per customer per month was 2.6 GB, up 44.2% year on year, largely driven by our 4G network expansion and increasingly popular data bundle offerings. Growing penetration on our 4G network helped drive up data ARPU growth to 8.2%, with 4G data usage more than doubling and contributing 62.2% to total data usage on the network in Q4'21.

Data revenue contribution reached 29.8% of total Group revenue, up from 27.2% in the prior year.
 

Mobile money

Description

Unit of

measure

Year ended

Quarter ended

March-21

March-20

Reported currency
change %

Constant currency
change %

March-21

March-20

Reported currency
change %

Constant currency
change %

Summarised statement of operations

 

 

 

 

 

 

 

 

 

Revenue 1

$m

401

311

29.1%

35.5%

110

83

32.7%

38.7%

Underlying EBITDA

$m

195

150

30.5%

36.2%

54

39

36.5%

42.1%

Underlying EBITDA margin

%

48.7%

48.2%

52 bps

27 bps

48.7%

47.3%

138 bps

117 bps

Depreciation and amortisation

$m

(10)

(7)

48.2%

54.0%

(4)

(3)

34.6%

40.4%

Operating profit

$m

185

143

29.6%

35.3%

50

36

36.7%

42.3%

Capex

$m

32

12

165.8%

165.8%

25

5

357.7%

357.7%

Operating free cash flow

$m

163

138

18.7%

24.9%

29

34

(15.1%)

(10.2%)

Operating KPIs

 

 

 

 

 

 

 

 

 

Mobile money key KPIs

 

 

 

 

 

 

 

 

 

Transaction value

$m

46,009

31,598

45.6%

53.6%

12,538

8,266

51.7%

59.2%

Active customers

million

21.7

18.3

18.5%

 

21.7

18.3

18.5%

 

Mobile money ARPU

$

1.7

1.6

1.6%

6.6%

1.7

1.6

6.0%

10.8%

 (1) Mobile money service revenue post inter-segment eliminations with mobile services was $301m in the year ended 31 March 2021 and $220m in the year ended 31 March 2020.

 

Mobile money revenue grew by 35.5% to $401m driven by 18.5% growth of the customer base and transaction value growth of 53.6%. Customer base g rowth was largely driven by expansion of our distribution network, as we continued to invest in exclusive kiosks and mobile money branches. Throughout the year, the expansion of our mobile money product portfolio, through partnerships with leading financial institutions, and the expansion of our merchant ecosystem further strengthened our mobile money propositions.

Underlying EBITDA for mobile money grew by 30.5% to $195m in reported currency. In constant currency, underlying EBITDA grew by 36.2%. Underlying EBITDA margin was 48.7%, an improvement of 27 basis points. The growth in total transaction value in constant currency, of 53.6%, was driven by customer base growth of 18.5% and growth in the transaction value per customer per month of 20.9%. The Q4'21 annualised transaction value reached $51bn in constant currency, with mobile money revenue accounting for 10.6% of total revenue in the quarter.

The mobile money customer base reached 21.7 million, up 18.5% from the prior year, with Airtel Money customers now representing 18.3% of our total customer base, an increase of 1.8 percentage points. Mobile money ARPU increased 6.6%, driven by the increase in transaction values and a higher contribution from merchant payments, cash transactions, P2P transfers and mobile services recharges through Airtel Money.

 

Forward looking statements

This document contains certain forward-looking statements regarding our intentions, beliefs or current expectations concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the economic and business circumstances occurring from time to time in the countries and markets in which the Group operates.

These statements are often, but not always, made through the use of words or phrases such as "believe," "anticipate," "could," "may," "would," "should," "intend," "plan," "potential," "predict," "will," "expect," "estimate," "project," "positioned," "strategy," "outlook", "target" and similar expressions.

It is believed that the expectations reflected in this document are reasonable, but they may be affected by a wide range of variables that could cause actual results to differ materially from those currently anticipated.

All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual future financial condition, performance and results to differ materially from the plans, goals, expectations and results expressed in the forward-looking statements and other financial and/or statistical data within this communication.

Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are uncertainties related to the following: the impact of competition from illicit trade; the impact of adverse domestic or international legislation and regulation; changes in domestic or international tax laws and rates; adverse litigation and dispute outcomes and the effect of such outcomes on Airtel Africa's financial condition; changes or differences in domestic or international economic or political conditions; the ability to obtain price increases and the impact of price increases on consumer affordability thresholds; adverse decisions by domestic or international regulatory bodies; the impact of market size reduction and consumer down-trading; translational and transactional foreign exchange rate exposure; the impact of serious injury, illness or death in the workplace; the ability to maintain credit ratings; the ability to develop, produce or market new alternative products and to do so profitably; the ability to effectively implement strategic initiatives and actions taken to increase sales growth; the ability to enhance cash generation and pay dividends and changes in the market position, businesses, financial condition, results of operations or prospects of Airtel Africa.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. The forward-looking statements contained in this document reflect the knowledge and information available to Airtel Africa at the date of preparation of this document and Airtel Africa undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on such forward-looking statements.

No statement in this communication is intended to be, nor should be construed as, a profit forecast or a profit estimate and no statement in this communication should be interpreted to mean that earnings per share of Airtel Africa plc for the current or any future financial periods would necessarily match, exceed or be lower than the historical published earnings per share of Airtel Africa plc.

Financial data included in this document are presented in US dollars rounded to the nearest million. Therefore, discrepancies in the tables between totals and the sums of the amounts listed may occur due to such rounding. The percentages included in the tables throughout the document are based on numbers calculated to the nearest $1,000 and therefore minor rounding differences may result in the tables. Growth metrics are provided on a constant currency basis unless otherwise stated. The Group has presented certain financial information on a constant currency basis. This is calculated by translating the results for the current financial year and prior financial year at a fixed 'constant currency' exchange rate, which is done to measure the organic performance of the Group. Growth rates for business and product segments are provided in constant currency as this better represents the underlying performance of the business.

 

Consolidated Financial Statements

Consolidated Statement of Comprehensive Income  

(All amounts are in US dollar millions unless otherwise stated)

 

Notes

For the year ended

 

31 March 2021

31 March 2020

Income

 

 

 

Revenue

5

 3,908

  3,422

Other income

 

 11

  17

 

 

3,919

  3,439

 

 

 

 

Expenses

 

 

 

 Network operating expenses

 

 694

  628

 Access charges

 

 376

  376

 License fee / spectrum usage charges

 

 198

  189

 Employee benefits expense

 

 275

  234

 Sales and marketing expenses

 

 187

  148

 Impairment loss/(reversal) on financial assets

 

 7

  (2)

 Other operating expenses

 

 382

  333

 Depreciation and amortisation

 

 681

  632

 

 

2,800

  2,538

 

 

 

 

Operating profit

 

1,119

  901

 

 

 

 

Finance costs

 

 432

  440

Finance income

 

 (9)

  (67)

Non-operating income 

 

 - 

  (70)

Share of profit of associate

 

 (1)

  (0)

Profit before tax

 

697

  598

 

 

 

 

Income tax expense

7

282

  190

 Profit for the year

 

415

  408

 

 

 

 

Profit before tax (as presented above)

 

697

  598

Less: Exceptional items (net)

6

(14)

  (65)

Underlying profit before tax

 

683

  533

 

 

 

 

Profit after tax (as presented above)

 

415

  408

Less: Exceptional items (net)

6

(50)

  (112)

Underlying profit after tax

 

365

  296

 

 

 

 

 

 

 

Notes

For the year ended

 

31 March 2021

31 March 2020

 

 

 

 

Profit for the year (continued from previous page)

 

415

  408

 

Other comprehensive income ('OCI')

 

 

 

  Items to be reclassified subsequently to profit or loss:

 

 

 

  Net losses due to foreign currency translation differences

 

(138)

  (219)

  Net (loss)/gain on net investments hedge

 

 (11)

  5

  Net loss on cash flow hedge

 

 - 

  (2)

 

 

(149)

  (216)

  Items not to be reclassified subsequently to profit or loss:

 

 

 

  Re-measurement (loss)/gain on defined benefit plans

 

 (0)

  1

  Tax credit/(expense) on above

 

 0

  (0)

 

 

(0)

  1

 

 

 

 

 Other comprehensive loss for the year

 

(149)

  (215)

 

 

 

 

 Total comprehensive income for the year

 

266

  193

 

 

 

 

 Profit for the year attributable to:

 

415

  408

 

 

 

 

  Owners of the Company

 

339

  370

  Non-controlling interests

 

76

  38

 

 

 

 

 Other comprehensive loss for the year attributable to:

 

(149)

  (215)

 

 

 

 

  Owners of the Company

 

(140)

  (224)

  Non-controlling interests

 

(9)

  9

 

 

 

 

 Total comprehensive income for the year attributable to:

 

266

  193

 

 

 

 

  Owners of the Company

 

199

  146

  Non-controlling interests

 

67

  47

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

  Basic

8

9.0c

  10.3c

  Diluted

8

9.0c

  10.3c

 

Consolidated Statement of Financial Position

(All amounts are in US dollar millions, unless otherwise stated)

 

 

Notes

As of

 

31 March 2021

31 March 2020

 

 

 

 

Assets

 

 

 

 

 

 

 

 Non-current assets

 

 

 

 Property, plant and equipment

9

2,066

  1,832

 Capital work-in-progress

9

166

  259

 Right of use assets

 

799

  639

 Goodwill

10

3,835

  3,943

 Other intangible assets

 

558

  456

 Intangible assets under development

 

177

  30

 Investment in associate

 

4

  3

 Financial assets

 

 

 

 - Investments

 

0

  0

 - Derivative instruments

 

  0

 - Security deposits

 

8

  7

 - Others

 

9

  1

 Income tax assets (net)

 

33

  39

 Deferred tax assets (net)

 

314

  333

 Other non-current assets

 

112

  112

 

 

8,087

  7,654

 

 

 

 

 Current assets

 

 

 

 Inventories

 

7

  3

 Financial assets

 

 

 

 - Derivative instruments

 

6

  10

 - Trade receivables

 

113

  132

 - Cash and cash equivalents

11

813

  1,010

 - Other bank balances

11

282

  6

 - Balance held under mobile money trust

 

440

  295

 - Others

 

66

  66

 Other current assets

 

147

  149

Assets of disposal group classified as held for sale

17

31

-

 

 

1,905

  1,671

 Total assets

 

9,992

  9,325

 

 

 

 

 

 

 

 

 

 

 

 

Notes

As of

 

31 March 2021

31 March 2020

 

 Current liabilities

 

 

 

 Financial liabilities

 

 

 

- Borrowings

12

342

  235

- Current maturities of long-term borrowings

12

1,126

  429

  - Lease liabilities

 

240

  199

 - Derivative instruments

 

7

  3

 - Trade payables

 

366

  416

 - Mobile money wallet balance 

 

432

  292

 - Others

 

448

  461

 Provisions

 

65

  65

 Deferred revenue

 

135

  124

 Current tax liabilities (net)

 

173

  149

 Other current liabilities

 

151

  115

  Liabilities of disposal group classified as held for sale

17

19

-

 

 

3,504

  2,488

 

 

 

 

  Net current liabilities

 

(1,599)

  (817)

 

 

 

 

 Non-current liabilities

 

 

 

 Financial liabilities

 

 

 

- Borrowings

12

1,871

  2,446

  - Lease liabilities

 

1,037

  970

- Derivative instruments

 

6

  4

- Others

 

91

  15

 Provisions

 

25

  23

 Deferred tax liabilities (net)

 

81

  69

 Other non-current liabilities

 

24

  29

 

 

3,135

  3,556

 

 

 

 

 Total liabilities

 

6,639

  6,044

 

 

 

 

 Net Assets

 

3,353

  3,281

 

 

 

 

 Equity 

 

 

 

 Share capital

13

3,420

  3,420

 Retained earnings 

 

2,975

  2,805

 Other reserves

 

(2,990)

  (2,837)

 Equity attributable to owners of the company

 

3,405

  3,388

 Non-controlling interests ('NCI')

 

(52)

  (107)

 Total equity

 

3,353

  3,281

 

The consolidated financial statements (company registration number: 11462215) were approved by the Board of directors and authorised for issue on 11 May 2021 and were signed on its behalf by:

 

Raghunath Mandava

Chief Executive Officer

11 May 2021

 

 

Consolidated Statement of Changes in Equity (All amounts are in US dollar millions, unless otherwise stated)

 

 

 

Equity attributable to owners of the company

Non-controlling interests (NCI)

Total
equity

 

 

Share Capital

Share
premium

Retained earnings

Other reserves

Equity attributable to owners of the company

 

 

No of shares

Amount

Transactions with NCI reserve

Other components of equity

 

 

 
 

 As of 1 April 2019

3,081,744,577

 3,082

 470

 1,688

 (580)

 (2,034)

 2,626

 (196)

 2,430

 

 

 

 

 

 

 

 

 

 

 

 

 Profit for the year

 - 

 - 

 - 

 370

 - 

 - 

 370

 38

 408

 

 Other comprehensive loss

 - 

 - 

 - 

 1

 - 

 (225)

 (224)

 9

 (215)

 

 Total comprehensive income / (loss)

 - 

 - 

 - 

 371

 - 

 (225)

 146

 47

 193

 

 Transaction with owners of equity

 

 

 

 

 

 

 

 

 

 

 Reduction in nominal value of shares [Note 13(1)]

 - 

 (1,541)

 - 

 - 

 - 

 - 

 (1,541)

 - 

 (1,541)

 

 Issue of deferred share capital [Note 13(1)]

 3,081,744,577

 1,541

 - 

 - 

 - 

 - 

 1,541

 - 

 1,541

 

 Issue of share capital [Note 13(2)]

 676,406,927

 338

 342

 - 

 - 

 - 

 680

 - 

 680

 

 Issue of share capital to NCI

 - 

 - 

 - 

 - 

 - 

 - 

 - 

 13

 13

 

 Share issue costs

 - 

 - 

 (3)

 (14)

 - 

 - 

 (17)

 - 

 (17)

 

 Share stabilisation proceeds

 - 

 - 

 - 

 - 

 - 

 7

 7

 - 

 7

 

 Employee share-based payment expenses

 - 

 - 

 - 

 - 

 - 

 0

 0

 - 

 0

 

 Reversal of indemnities

 - 

 - 

 - 

 64

 - 

 - 

 64

 - 

 64

 

 Court approved reduction in share premium

 - 

 - 

 (809)

 809

 - 

 - 

 - 

 - 

 - 

 

 Transactions with NCI

 - 

 - 

 - 

 - 

 (5)

 - 

 (5)

 36

 31

 

 Dividend to owners of the company

 - 

 - 

 - 

 (113)

 - 

 - 

 (113)

 - 

 (113)

 

 Dividend (including tax) to NCI

 - 

 - 

 - 

 - 

 - 

 - 

 - 

 (7)

 (7)

 

 As of 31 March 2020

 6,839,896,081

 3,420

 - 

 2,805

 (585)

 (2,252)

 3,388

 (107)

 3,281

 

 

 

 

 

 

 

 

 

 

 

 

 Profit for the year

 - 

 - 

 - 

 339

 - 

 - 

339

 76

415

 

 Other comprehensive loss

 - 

 - 

 - 

 (0)

 - 

 (140)

 (140)

 (9)

 (149)

 

 Total comprehensive income / (loss)

 - 

 - 

 - 

 339

 - 

 (140)

 199

 67

266

 

 

 

 

 

 

 

 

 

 

 

 

 Transaction with owners of equity

 

 

 

 

 

 

 

 

 

 

 Employee share-based payment expenses

 - 

 - 

 - 

 (0)

 - 

 0

 0

 - 

 0

 

 Purchase of own shares

 - 

 - 

 - 

 - 

 - 

 (4)

 (4)

 - 

 (4)

 

 Transactions with NCI

 - 

 - 

 - 

 - 

 (9)

 - 

 (9)

 1

 (8)

 

 Dividend to owners of the company [Note 4 (a) & (b)]

 - 

 - 

 - 

 (169)

 - 

 - 

 (169)

 - 

 (169)

 

 Dividend (including tax) to NCI (1)

 - 

 - 

 - 

 - 

 - 

 - 

 - 

 (13)

 (13)

 

 As of 31 March 2021

 6,839,896,081

 3,420

 - 

 2,975

 (594)

 (2,396)

 3,405

 (52)

 3,353

 

    (1) Dividend to NCI includes tax of $0m.

 

Consolidated Statement of Cash Flows (All amounts are in US dollar millions, unless otherwise stated)

 

 

 

For the year ended

 

 

31 March 2021

31 March 2020

Cash flows from operating activities

 

 

 

Profit before tax

 

697

  598

Adjustments for -

 

 

 

  Depreciation and amortization

 

681

  632

  Finance income

 

(9)

  (67)

  Finance cost

 

432

  440

  Share of profit of associate

 

(1)

  (0)

  Non-operating income adjustments

 

  (70)

  Other adjustments(1)

 

(15)

  (45)

 

 

 

 

Operating cash flow before changes in working capital

 

1,785

  1,488

Changes in working capital

 

 

 

  Increase in trade receivables

 

(8)

  (11)

  Increase in inventories

 

(4)

  (1)

  Decrease in trade payables

 

(38)

  (15)

  Increase in mobile money wallet balance

 

139

  53

  Increase in provisions

 

1

  2

  Increase in deferred revenue

 

17

  20

  Decrease in income received in advance

 

(1)

  (11)

  Increase in other financial and non-financial liabilities

 

18

  4

  Increase in other financial and non-financial assets

 

(48)

  (28)

Net cash generated from operations before tax

 

1,861

  1,501

  Income taxes paid

 

(195)

  (114)

 

 

 

 

Net cash generated from operating activities (a)

 

1,666

  1,387

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

  Purchase of property, plant and equipment and capital work-in-progress

 

(645)

  (656)

  Purchase of intangible assets

 

(270)

  (155)

  Investment in term deposits with banks

 

(257)

-

  Payment of deferred consideration for past business combination

 

  (19)

  Interest received

 

14

  29

Net cash used in investing activities (b)

 

(1,158)

  (801)

 

 

 

 

Cash flows from financing activities

 

 

 

  Proceeds from issue of shares to owners of the Company

 

  680

  Proceeds from sale of shares to non-controlling interests

 

  34

  Acquisition of non-controlling interests

 

(7)

  -

  Purchase of own shares by ESOP trust

 

(4)

-

  Payment of share issue expenses

 

  (17)

  Proceeds from borrowings

 

407

  174

  Repayment of borrowings

 

(265)

  (720)

  Repayment of lease liabilities

 

(208)

  (189)

  Dividend paid to non-controlling interests

 

(9)

  (5)

  Dividend paid to owners of the Company

 

(169)

  (113)

  Interest and other finance charges paid

 

(317)

  (318)

  Share stabilisation proceeds

 

  7

  Proceeds from cancellation of derivatives

 

  122

  Payment on maturity of derivatives

 

(3)

  (25)

Net cash (used) in/generated from financing activities (c)

 

(575)

  (370)

 

 

 

 

(Decrease)/increase in cash and cash equivalents during the year (a+b+c)

 

(67)

  216

Currency translation differences relating to cash and cash equivalents

 

(17)

  1

 

 

 

 

Cash and cash equivalent as at beginning of the year

 

1,087

  870

Cash and cash equivalents as at end of the year (Note 11) (2)

 

1,003

  1,087

 

1.  For the year ended 31 March 2021, this mainly includes recognition of revenue pertaining to earlier years on a cumulative catch-up basis, arising out of a settlement agreement entered with a customer in one of the Group's subsidiaries. For the year ended 31 March 2020, this mainly includes deferment of customer acquisition costs and reversal of provision for capital work in progress.

2.  Includes balance held under mobile money trust of USD 440m (2020: USD 295m) on behalf of mobile money customers which are not available for use by the Group.

 

Notes to Consolidated Financial Statements

(All amounts are in US dollar millions, unless otherwise stated)

1.  Corporate information

Airtel Africa plc ('the company') is a public company limited by shares incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales (registration number 11462215). The registered address of the company is First Floor, 53/54 Grosvenor Street, London W1K 3HU, United Kingdom. The company listed on London Stock Exchange ('LSE') on 3 July 2019 and on Nigerian Stock Exchange ('NSE') on 9 July 2019. The company is a subsidiary of Airtel Africa Mauritius Limited ('the parent'), a company registered in Mauritius. The registered address of the parent is C/o IQ EQ Corporate Services (Mauritius) Ltd., 33, Edith Cavell Street, Port Louis, 11324, Mauritius.

 

The company, together with its subsidiary undertakings (hereinafter referred to as 'the Group') has operations in Africa. The principal activities of the Group and its associate consist of provision of telecommunications and mobile money services.

 

2.  Basis of preparation

The results for the year ended 31 March 2021 are an abridged statement of the full annual report which was approved by the Board of directors on 11 May 2021 and signed on its behalf on 11 May 2021. The consolidated financial statements within the full annual report are prepared in accordance with the Companies Act 2006 and IFRS standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. The auditor's report on those consolidated financial statements was unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006.

 

The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2021 and 2020, but is derived from those accounts. Statutory accounts for March 2020 have been delivered to the Registrar of Companies and those for 2021 will be delivered following the company's annual general meeting.

 

The financial information included in this release announcement does not itself contain sufficient information to comply with IFRS. The company will publish full financial statements that comply with IFRS, in May 2021.

 

All the amounts included in the financial statements are reported in United States dollars, with all values rounded to the nearest millions (USD m) except when otherwise indicated. Further, amounts which are less than half a million are appearing as '0'.

 

3.  Going concern

 

These financial statements have been prepared on a going concern basis. In making this going concern assessment, the Group has considered cash flow projections to June 2022 under both base and reasonable worst case scenarios taking into considerations its principal risks and uncertainties including a reduction in revenue and EBITDA, the potential impact of Covid-19 and a significant devaluation of the various currencies in the markets in which the Group operates (including Nigerian Naira) and the impact on the possible inability of repatriating funds from subsidiaries. As part of this evaluation, the Group has considered available ways to mitigate these risks and uncertainties and has also considered that the Group has committed undrawn facilities of USD 1,140m as of the date of authorisation of these financial statements (out of which USD 1,036m are due to expire beyond the next 12 months), which will fulfil the Group's cash flow requirement under both base and reasonable worst-case scenarios.

We have USD 2,384m in long-term bonds, with the first repayment of USD 879m (EURO 750m) due in May 2021 which will be paid through a mix of cash held as well as from the proceeds of a USD 500m inaugural multi-bank long-term facility (part of the USD 1,036m undrawn facilities mentioned above) entered into by Airtel Africa plc in April 2021.

Having considered the above factors impacting the Group's businesses, including the scheduled EURO bond repayment of USD 879m (EURO 750m) due in May 2021, the impact of downside sensitivities, and the mitigating actions available, including a reduction and deferral of capital expenditure, the Board is satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Board continues to adopt the going concern basis of accounting in preparing the Group and company financial statements.

4.  Significant transactions/new developments

 

a)  The shareholders declared a final dividend of 3 cents per ordinary share for the year ended 31 March 2020, which was paid on 24 July 2020 to the holders of ordinary shares on the register of members at the close of business on 3 July 2020.

b)  The interim dividend of 1.5 cents per share was approved by the Board on 22 October 2020 paid on 11 December 2020 to the holders of ordinary shares on the register of members at the close of business on 13 November 2020.

c)  During the year, Airtel Uganda Limited was issued with a National Telecom Operator licence under the new Licensing Regime applicable in Uganda. Thus USD 65m (i.e. total payment of USD 74m less recoverable VAT of USD 9m) has been capitalised to intangible assets as a result. The license takes effect from 1 July 2020 and is for a period of 20 years.

  In Airtel Nigeria, the application for renewal of the spectrum licences (due to expire on 30 November 2021) in the 900MHz and 1800MHz bands have been approved for a period of ten years by the licensing authority. Under the terms of the spectrum licences, Airtel Nigeria has paid USD 182m in respect of the licence renewal fees. The amount has been held under intangible assets under development being an advance and shall be capitalized and subsequently amortised with effect from 1 December 2021.

d)  On 18 March 2021, the Group entered into an agreement, under which The Rise Fund, the global impact investing platform of leading alternative investment firm TPG, will invest USD 200m in Airtel Mobile Commerce BV ("AMC BV"), a wholly owned subsidiary of the Group, by way of purchase of a portion of AMC BV's shareholding from the Group. The transaction will close in two stages i.e. upon receipt of USD 150m at first close and USD 50m at second close based on closing conditions defined in sale agreements. On respective closings, the Group will record a transaction with non-controlling interest in equity.  Further, under the terms of the transaction, and in very limited circumstances, TPG would have the option, so as to provide liquidity to them, to sell its shares in AMC BV to Airtel Africa or its affiliates at fair market value subject to a minimum and maximum payable amount. As of 31 March 2021, there are no accounting implications under this transaction.

e)  On 31 March 2021, the Group entered into an agreement under which Mastercard, will invest USD 100m in Airtel Mobile Commerce B.V. ('AMC BV'), a wholly owned subsidiary of the Group, by way of purchase of a portion of AMC BV's shareholding from the Group. The transaction will close in two stages i.e. upon receipt of USD 75m at first close and USD 25m at second close based on closing conditions defined in sale agreements. On respective closings, the Group will record transaction with non-controlling interest in equity. Further, under the terms of the transaction, and in very limited circumstances, Mastercard would have the option, so as to provide liquidity to them, to sell its shares in AMC BV to Airtel Africa or its affiliates at fair market value subject to a minimum and maximum payable amount. As of 31 March 2021, there are no accounting implications under this transaction.

f)  On 23 March 2021, the Group signed two separate agreements to sell its telecommunications tower companies in Madagascar and Malawi at an aggregate consideration of USD 108m to Helios Towers plc under a sale and leaseback arrangement. The completion of the sale of the tower company holding 494 towers in Madagascar is considered highly probable and is only subject to conditions that are usual and customary. Consequently, the Group has classified the assets and liabilities of the Madagascar tower company as held for sale as of 31 March 2021.

  The completion of the sale of company holding 735 towers in Malawi, in addition to certain customary conditions, is also subject to a non-customary condition which is beyond the Group's control. As of 31 March 2021, the Group cannot ascertain the likelihood of this condition as being highly probable and consequently has not classified the assets of the Malawian tower company as held for sale.

    On the same date, the Group also entered into exclusive Memorandum of Understanding agreements with Helios for the potential sale of its tower assets in Chad and Gabon, however since no binding sale agreement has been signed between the parties, the assets are not considered as held for sale as of 31 March 2021.

    On 22 February 2021, the Group signed an agreement to sell 162 towers in Rwanda to IHS Rwanda Ltd under a sale and lease back arrangement. As at 31 March 2021, the sale of such tower assets are subject only to usual and customary conditions and the sale is highly probable within the next 12 months. Consequently, the Group has classified such assets and related liabilities as held for sale.

  For disclosures on the Madagascar and Rwanda assets held for sale, please refer note 17.

 

5.  Segmental Information    

The Group's segment information is provided on the basis of geographical clusters to the Group's chief executive officer (chief operating decision maker - 'CODM') for the purposes of resource allocation and assessment of performance. The Group's reporting segments are as follows:  

Nigeria

East Africa - Comprising operations in Kenya, Uganda, Rwanda, Tanzania, Malawi and Zambia

Francophone Africa - Comprising operations in Niger, Gabon, Chad, Congo B, DRC, Madagascar and Seychelles

Each segment derives revenue from mobile services, mobile money and other services. Expenses, assets and liabilities primarily related to the corporate headquarters of the Group are presented as Unallocated Items.

The amounts reported to CODM are based on the accounting principles used in the preparation of the financial statements. Each segment's performance is evaluated based on segment revenue and segment result.

The segment result is Underlying EBITDA i.e. earnings before interest, tax, depreciation and amortisation before exceptional items as adjusted for charitable donation. This is the measure reported to the CODM for purposes of resource allocation and assessment of segment performance.

Inter-segment pricing and terms are reviewed and changed by the management to reflect changes in market conditions and changes to such terms are reflected in the period in which the changes occur.

Inter-segment revenues eliminated upon consolidation of segments/Group accounting policy alignments are reflected in the 'Eliminations/Adjustments' column.

Segment assets and segment liabilities comprise those assets and liabilities directly managed by each segment. Segment assets primarily include receivables, property, plant and equipment, capital work in progress, right-to-use assets, intangibles assets, inventories and cash and cash equivalents. Segment liabilities primarily include operating liabilities. Segment capital expenditure comprises investment in property, plant and equipment, capital work in progress, intangible assets (excluding licenses) and capital advances.

Investment elimination upon consolidation and resulting goodwill impacts are reflected in the 'elimination /adjustment' column.

Summary of the segmental information and disaggregation of revenue for the year ended and as of 31 March 2021 is as follows:

 

 Nigeria

 East Africa

 Francophone Africa

 Unallocated

 Eliminations

 Total

 
 

 

 

 

 

 

 

 

 

Revenue from external customers

 

 

 

 

 

 

 

Voice revenue

896

649

558

0

2,103

 

Data revenue

549

 354

 254

 - 

 - 

 1,157

 

Mobile money revenue(1)

 0

 227

 74

 - 

 - 

 301

 

Other revenue(2)

 104

 147

 96

 - 

 - 

 347

 

 

 1,549

 1,377

 982

 0

 - 

 3,908

 

Inter-segment revenue

 3

 4

 3

 - 

 (10)

 - 

 

Total revenue

 1,552

 1,381

 985

 0

 (10)

 3,908

 

Segment results: Underlying EBITDA

 839

 631

 364

 (30)

 (12)

 1,792

 

 

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

 

Depreciation and amortisation

 236

 221

 207

 2

 15

 681

 

Finance costs

 

 

 

 

 

432

 

Finance income

 

 

 

 

 

(9)

 

Share of profit of associate

 

 

 

 

 

(1)

 

Charitable donation

 1

 2

 1

 2

 - 

 6

 

Exceptional items pertaining to operating profit

 - 

 - 

 (14)

 - 

 - 

 (14)

 

Profit before tax

 

 

 

 

 

697

 

 

 

 

 

 

 

 

 

Other segment items

 

 

 

 

 

 

 

Capital expenditure

 275

 249

 88

 2

 - 

 614

 

 

 

 

 

 

 

 

 

As of 31 March 2021

 

 

 

 

 

 

 

Segment assets

 1,889

 2,042

 1,791

 25,622

 (21,352)

 9,992

 

Segment liabilities

 1,192

 2,989

 2,715

 16,895

 (17,152)

 6,639

 

Investment in associate (included in segment assets above)

 - 

 - 

 4

 - 

 - 

 4

 

 

(1) intra-segment elimination of USD 100m adjusted with Mobile money revenue. It includes USD 64m pertaining to East Africa and balance USD 36m pertaining to Francophone Africa.

(2) it includes messaging, value added services, enterprise, site sharing and handset sale revenue.

Summary of the segmental information and disaggregation of revenue for the year ended and as of 31 March 2020 is as follows:

 

 Nigeria

 East Africa

 Francophone Africa

 Unallocated

 Eliminations

 Total

 
 

 

 

 

 

 

 

 

 

Revenue from external customers

 

 

 

 

 

 

 

Voice revenue

 848

 605

 522

 (5)

 - 

 1,970

 

Data revenue

 435

 307

 189

 - 

 - 

 930

 

Mobile money revenue(1)

 4

 157

 59

 - 

 - 

 220

 

Other revenue(2)

 84

 131

 86

 - 

 - 

 302

 

 

1,371

1,200

856

 (5)

  - 

3,422

 

Inter-segment revenue

2

1

3

-

(6)

-

 

Total revenue

1,373

1,201

859

 (5)

 (6)

3,422

 

Segment results: Underlying EBITDA

744

485

292

2

 (8)

1,515

 

 

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

 

Depreciation and amortisation (excluding exceptional items)

183

229

189

2

2

605

 

Finance costs

 

 

 

 

 

440

 

Finance income

 

 

 

 

 

(67)

 

Non-operating Income, (net)

 

 

 

 

 

(70)

 

Share of loss of associate

 

 

 

 

 

(0)

 

Charitable donation

1

0

0

4

5

 

Exceptional items pertaining to operating profit

 (5)

 (10)

12

7

4

 

Profit before tax

 

 

 

 

 

598

 

 

 

 

 

 

 

 

 

Other segment items

 

 

 

 

 

 

 

Capital expenditure

325

181

133

3

642

 

 

 

 

 

 

 

 

 

As of 31 March 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment assets

1,476

1,672

1,663

26,202

 (21,688)

9,325

 

Segment liabilities

1,078

2,678

2,632

16,985

 (17,329)

6,044

 

Investment in associate (included in segment assets above)

3

  3

 

 

(1) intra-segment elimination of USD 91m adjusted with mobile money revenue. It includes USD 57m pertaining to East Africa and balance USD 34m pertaining to Francophone Africa.

(2) it includes messaging, value added services, enterprise, site sharing and handset sale revenue.

Geographical information disclosure on non-current assets (PPE, CWIP, ROU, Intangible assets including goodwill and intangible assets under development):

 

As of

 

31 March 2021

31 March 2020

United Kingdom

1

  1

Nigeria

1,455

  1,142

Netherlands

3,782

  3,891

Others

2,363

  2,126

Total

7,601

  7,160

 

 

 

 

 

6.  Exceptional items

Underlying profit/loss before tax excludes the following exceptional items:

 

For the year ended

 

31 March 2021

31 March 2020

Profit before tax

697

  598

 

 

 

Add: Exceptional items

 

 

- Service revenues (1)

(20)

-

- Employee restructuring (2)

6

-

- Reversal of indemnities (3)

(72)

- Network modernisation (4)

27

- Deferment of customer acquisition cost (5)

  (27)

- Share issue and IPO related expenses (6)

  (7)

 

 

 

 

(14)

  (65)

Underlying profit before tax

683

  533

 

(1)  represents recognition of revenue pertaining to earlier years on a cumulative catch-up basis, arising out of a settlement agreement entered with a customer in one of the Group's subsidiaries in Niger.

(2)  comprises the cost of employee restructuring completed during the year ended 31 March 2021 in one of the Group's subsidiaries, including settlement of severance pay defined benefit plans.

(3)  represents expiry of indemnity obligation on the publication of registration document of the company. This is presented as 'Non-operating income' in the statement of comprehensive income.

(4)  this relates to the accelerated depreciation which arose on non-usable uninstalled equipment as part of the modernisation programme. This specific programme started in 2017 and was completed during the year ended 31 March 2020.

(5)  represents the impact relating to previous periods of USD 27m on deferment of customer acquisition costs following reassessment of expected average customer life.

(6)  includes equity issuance related expenses under IPO of the company including cost and fair value changes of derivatives taken for IPO proceeds and equity issuance related expenses of rights issue in a subsidiary, Congo B.

 

Underlying profit after tax excludes the following exceptional items:

 

For the year ended

 

31 March 2021

31 March 2020

Profit after tax

415

  408

-Exceptional items (as above)

(14)

  (65)

- Tax on above exceptional items

  4

- Deferred tax asset recognition (1) (2)

(36)

  (51)

 

(50)

  (112)

Underlying profit after tax

365

  296

 

(1)  During the year ended 31 March 2021, the Group recognised deferred tax assets in Airtel Tanzania. Airtel Tanzania has carried forward losses and temporary differences on which deferred tax was not recognized in the past. Considering that Airtel Tanzania has been in continuous and cumulative profits and on the basis of likely timing and the level of future taxable profits, the Group has determined that it is now probable that taxable profits will be available against which the tax losses and temporary differences can be utilized in the foreseeable future. Consequently, the deferred tax asset recognition criteria are met, leading to recognition of USD 36m during the year ended 31 March 2021.

(2)  During the year ended 31 March 2020, the Group recognised deferred tax assets in Airtel DRC on meeting the recognition criteria.

Profit attributable to non-controlling interests include benefit of USD 19m and USD 3m during the year ended 31 March 2021 and 2020 respectively, relating to the above exceptional items.

7.   Income tax

The tax expense is as follows:

 

For the year ended

 

31 March 2021

31 March 2020

 

 

 

Current tax

242

176

Deferred tax

40

  14

Income Tax expense

282

190

 

8.  Earnings per share ('EPS')

The details used in the computation of basic EPS:

 

For the year ended

 

31 March 2021

31 March 2020

 

 

 

 

 

 

Profit for the year attributable to owners of the Company

339

370

Weighted average ordinary shares outstanding for basic EPS(1)

3,757,550,081

3,585,634,531

 

 

 

Basic EPS

9.0c

10.3c

 

(1) During the year ended 31 March 2020, the company as part of its IPO issued 676,406,927 shares.



The details used in the computation of diluted EPS:

 

 

For the year ended

 

31 March 2021

31 March 2020

 

 

 

Profit for the year attributable to owners of the Company

339

370

Weighted average ordinary shares outstanding for diluted EPS(1)(2)(3)

3,759,122,452

  3,586,678,328

 

 

 

Diluted EPS

9.0c

10.3c

(1)  The difference between the basic and diluted number of shares at the end of March 2021 being 1,572,371 (March 2020: 1,150,280) relates to awards committed but not yet issued under the Group's share-based payment schemes.

 

(2)  Refer Note 13 for detail on the ordinary share movements as part of the initial public offering process during the year ended 31 March 2020.

 

(3)  Deferred shares have not been considered for EPS computation as they do not have right to participate in profits.

 

       

 

 

 

 

9.  Property, plant and equipment ('PPE')

 

  The following table presents the reconciliation of changes in the carrying value of PPE for the year ended 31 March 2021 and 31 March 2020:

 

 

 Leasehold Improvements

 Building 

 Land

 Plant and Equipment (2)

 Furniture & Fixture

 Vehicles

 Office Equipment

 Computer

 Total

 Capital work in progress (3)

 Gross carrying value

 

 

 

 

 

 

 

 

 

 

 Balance as of 1 April 2019

 50

 52

 30

 1,957

 18

 27

 29

 670

 2,833

 367

 

 

 

 

 

 

 

 

 

 

 

 Additions  / capitalization

 2

 0

 0

 689

 13

 0

 11

 34

 749

 655

 Disposals / adjustments (1)

 (0)

 - 

 (3)

 (17)

 (3)

 (3)

 (0)

 (8)

 (34)

 (747)

 Exchange differences

 (2)

 (5)

 (1)

 (221)

 (3)

 (0)

 (3)

 (35)

 (270)

 (16)

Balance as of 31 March 2020

 50

 47

 26

 2,408

 25

 24

 37

 661

 3,278

 259

 

 

 

 

 

 

 

 

 

 

 

 Additions / capitalisation

 1

 1

 0

 648

 14

 0

 9

 26

 699

 611

 Disposals / adjustments (1)

 (1)

 (0)

 (0)

 (32)

 (1)

 (0)

 (0)

 0

 (34)

 (696)

Transferred to assets held for sale

-

-

-

(77)

-

0

-

(0)

(77)

(0)

 Exchange differences

 0

 (2)

 1

 (89)

 (1)

 0

 (1)

 (11)

 (103)

 (8)

 Balance as of 31 March 2021

 50

 46

 27

 2,858

 37

 24

 45

 676

 3,763

 166

 

 

 

 

 

 

 

 

 

 

 

 Accumulated Depreciation

 

 

 

 

 

 

 

 

 

 

 Balance as of 1 April 2019

 41

 13

 2

 506

 8

 25

 14

 627

 1,236

 - 

 

 

 

 

 

 

 

 

 

 

 

 Charge

 3

 3

 0

 362

 6

 0

 8

 24

 406

 - 

 Disposals / adjustments (1)

 (0)

 - 

 (1)

 (12)

 (3)

 (3)

 (0)

 (2)

 (21)

 - 

 Exchange differences

 (2)

 (1)

 0

 (134)

 (2)

 (0)

 (3)

 (33)

 (175)

 - 

Balance as of 31 March 2020

42

15

1

722

9

22

19

616

1,446

-

 

 

 

 

 

 

 

 

 

 

 

 Charge

 2

 3

 0

 341

 6

 1

 9

 27

 389

 - 

 Disposals / adjustments (1)

 (0)

 (0)

 0

 (28)

 (0)

 (1)

 (0)

 1

 (28)

 - 

Transferred to assets held for sale

-

-

-

(58)

-

(0)

-

(0)

(58)

 

 Exchange differences

 0

 (1)

 (0)

 (41)

 (0)

 0

 (1)

 (9)

 (52)

 - 

 Balance as of 31 March 2021

 44

 17

 1

 936

15

 22

27

 635

1,697

 - 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net carrying value

 

 

 

 

 

 

 

 

 

 

 As of 1 April 2019

 9

 39

 28

 1,451

 10

 2

 15

 43

 1,597

 367

 As at 31 March 2020

 8

 32

 25

 1,686

 16

 2

 18

 45

 1,832

 259

 As at 31 March 2021

 6

29

 26

 1,922

 22

 2

 18

 41

 2,066

 166

 

 

 

 

 

 

 

 

 

 

 

(1)  Related to the reversal of gross carrying value and accumulated depreciation on retirement of PPE and reclassification from one category of asset to another.

(2)  Includes PPE amounting to USD 50m and USD 4m as at 31 March 2021 and 2020 respectively, pledged against the Group's borrowings.

(3)  The carrying value of capital work-in-progress as at 31 March 2021 and 2020 mainly pertains to plant and equipment.

10. Impairment review

The carrying amount of goodwill is attributed to the following groups of CGUs:

 

 

 

As of

 

 

 

31 March 2021

31 March 2020

Nigeria

 

 

1,298

  1,373

East Africa

 

 

1,821

  1,853

Rest of Africa

 

 

716

  717

 

 

 

3,835

  3,943

 

The Group tests goodwill for impairment annually on 31 December. The carrying value of Goodwill as of 31 December 2020 was USD 1,349m, USD 1,836m and USD 730m for Nigeria, East Africa and Francophone Africa, respectively. The recoverable amounts of the above group of CGUs are based on value-in-use, which are determined based on ten-year business plans that have been approved by the Board.

The Group operates in emerging markets which are underpenetrated when compared to developed markets. In such emerging markets, short-term plans (for example, five years) are not indicative of the long-term future prospects and performance of the Group. Considering this, the life of the Group's regulatory licences and network assets, which are at an average of 10 years, and the potential opportunities of the emerging African telecom sector, which is mostly a 2-3 player market with lower smartphone penetration, the Group has adopted a ten-year plan for the purpose of internal forecasts and impairment testing.  Accordingly, the Board approved that this planning horizon reflects the assumptions for medium to long-term market developments, appropriately covers market dynamics of emerging markets and better reflects the expected performance in the markets in which the Group operates.

While using the ten-year plan, the Group also considers external market data to support the assumptions used in such plans, which is generally available only for the first five years. Considering the degree of availability of external market data beyond year five, the Group has performed sensitivity analysis to assess the impact on impairment of using a five-year plan. The results of this sensitivity analysis demonstrate that the initial five-year plan with appropriate changes including long-term growth rates applied at the end of this period does not result in any impairment and does not impact the headroom by more than 6% in any of the group of CGUs as compared to the headroom using the ten-year plan. In performing this sensitivity, the Group has changed the long-term growth rate for Nigeria from 2.51% to 4.51% while retaining the long-term growth rates for the other group of CGUs. The change in Nigerian long-term growth rate is aligned to the level of penetration and growth opportunities in the Nigerian telecom market towards the expiry of the five-year period and is in line with our view of combined growth over years six to ten and after ten years. Further, the Group is confident that projections for years six to ten are reliable and can demonstrate its ability, based on past experience, to forecast cash flows accurately over a longer period. Accordingly, the Board has approved and the Group continues to follow a consistent policy of using an initial forecast period of ten years for the purpose of impairment testing.

The cash flows beyond the planning period are extrapolated using appropriate long-term terminal growth rates. The long-term terminal growth rates used do not exceed the long-term average growth rates of the respective industry and country in which the entity operates and are consistent with internal/external sources of information.

 

 

The input used in performing the impairment assessment at 31 December 2020 were as follows:

Assumptions

Nigeria

East Africa

Francophone Africa

Pre-tax Discount Rate

22.45%

14.82%

14.25%

Capital expenditure (1)

8% - 19%

6% - 17%

5% - 10%

Long term growth rate

2.51%

5.11%

3.70%

(1) Capital expenditure is expressed as a percentage of Gross Revenue over the plan period.

At 31 December 2020, the impairment testing did not result in any impairment in the carrying amount of goodwill in any group of CGUs.

The key assumptions in performing the impairment assessment were as follows:

Assumptions

Basis of assumptions

Discount rate

Discount rate reflects the market assessment of the risks specific to the group of CGUs and estimated based on the weighted average cost of capital for respective CGUs. Following the onset of the COVID-19 outbreak, the Group had concluded that in determining the discount rate at 31 March 2020, using spot country risk premiums would not give a discount rate that a market participant would expect at the balance sheet date in determining the present value of cash flows over a ten-year period. At 31 December 2020 this significant market volatility has reduced and management have reverted to using a spot rate.

Capital expenditures

The cash flow forecasts of capital expenditure are based on experience after considering the capital expenditure required to meet coverage and capacity requirements relating to voice, data and mobile money services.

Growth rates

The growth rates used are in line with the long-term average growth rates of the respective industry and country in which the entity operates and are consistent with the internal / external sources of information.

 

At 31 December 2020, the impairment testing did not result in any impairment in the carrying amount of goodwill in any group of CGUs. The results of the impairment tests using these rates show that the recoverable amount exceeds the carrying amount by USD 1,719m for Nigeria (69%), USD 4,811m for East Africa (155%) and USD 1,811m for Francophone Africa (107%). The Group therefore concluded that no impairment was required to the Goodwill held against each group of CGUs.

Sensitivity in discount rate and capital expenditure

Management believes that no reasonably possible change in any of the key assumptions would cause the difference between the carrying value and recoverable amount for any cash-generating unit to be materially different from the recoverable value in the base case. The table below sets out the breakeven pre-tax discount rate for each group of CGUs, which will result in the recoverable amount being equal with the carrying amount for each group of CGU's:

 

Nigeria

East Africa

Francophone Africa

Pre-tax Discount Rate

33.28%

29.04%

26.32%

 

The table below presents the increase in isolation in capital expenditure which will result in equating the recoverable amount with the carrying amount of each group of CGUs:

Assumptions

Nigeria

East Africa

Francophone Africa

 

 

 

 

Capital expenditure

6.81%

13.94%

9.86%

 

No reasonably possible change in the terminal growth rate would cause the carrying amount to exceed the recoverable amount.

 

11. Cash and bank balances

Cash and cash equivalents

 

 

 As of

 

 

31 March 2021

March 31, 2019

  Balances with banks

 

 

 

  - On current accounts

 

486

  153

  - Bank deposits with original maturity of 3
  months or less

 

290

  836

  Cheques on hand

 

0

  0

  Balance held in wallets

 

36

20

  Cash on hand

 

1

1

 

 

813

  1,010

Other bank balances

 

 

 As of

 

 

31 March 2021

31 March 2020

 

 

 

 

  Term deposits with banks

 

257

-

  Margin money deposits (1)

 

25 

6

  Unpaid dividend

 

0

 

 

282 

6

 

(1) Margin money deposits represents amount given as collateral for legal cases and/or bank guarantees for disputed matters, and deposit against derivative contracts.

For the purpose of the statement of cash flows, cash and cash equivalents are as follows:

 

 

 As of

 

 

31 March 2021

31 March 2020

  Cash and cash equivalents as per balance sheet

 

813

  1,010

  Balance held under mobile money trust

 

440

  295

  Bank overdraft

 

(251)

  (218)

  Cash and cash equivalents classified as held for sale (refer note 17)

 

1

-

 

 

1,003

  1,087

 

 

 

12. Borrowings

Non-current

 

 

 As of

 

 

31 March 2021

31 March 2020

Secured

 

 

 

  Term loans

 

50

  0

  Less: Current portion (A)

 

(50)

  (0)

 

 

  0

 

 

 

 

Unsecured

 

 

 

  Term loans

 

544

  522

  Non- convertible bonds (1)

 

2,403

2,353

 

 

2,947

  2,875

  Less: Current portion (B)

 

(1,076)

 (429)

 

 

1,871

  2,446

 

 

 

 

 

 

1,871

  2,446

 

 

 

 

Current maturities of long-term borrowings (A + B)

 

1,126

  429

 

 

 

C urrent

 

 

 As of

 

 

31 March 2021

31 March 2020

Secured

 

 

 

  Term Loans

 

0

  Bank overdraft

 

4

 

 

4

Unsecured

 

 

 

  Term loans

 

92

  17

  Bank overdraft

 

250

  214

 

 

342

  231

 

 

342

  235

 

(1) It includes impact of fair value hedges and debt origination costs. During the year ended 31 March 2020, the Group repaid non-convertible bonds of CHF 350m at maturity.

 

13. Share capital

 

 

As of

 

 

31 March 2021

31 March 2020

Authorised shares

 

 

 

3,758,151,504 Ordinary shares of USD 0.5 each

(March 2020: 3,758,151,504)

 

1,879 

1,879

 

 

 

 

3,081,744,577 Deferred shares of USD 0.5 each

(March 2020:3,081,744,577)

 

                                         1,541

1,541

 

 

                                                       3,420

3,420

 

 

 

 

Issued, Subscribed and fully paid-up shares

 

 

 

3,758,151,504 Ordinary shares of USD 0.5 each (March 2020: 3,758,151,504) (1) (2)

 

                                                     1,879 

  1,879

3,081,744,577 Deferred shares of USD 0.5 each (1) 

(March 2020: 3,081,744,577)

 

                                        1,541

1,541

 

 

                                                         3,420

3,420

             

 

(1)  On 27 June 2019, the company sub-divided and converted each ordinary share of USD 1 into:

· One ordinary share of USD 0.5 each having the same rights and being subject to the same restrictions as the existing ordinary shares of the company; and

· One deferred share of USD 0.5 each.

 

(2)  On 3 July 2019 and 9 July 2019, the company completed its listing on the London Stock Exchange (LSE) and Nigerian Stock Exchange (NSE) respectively and raised USD 680m (including share premium of USD 342m) from the issue of 676,406,927 new ordinary shares.

 

(3)  During the year 31 March 2020, in order to meet the share capital requirements for re-registration as a public limited company, the company allotted 50,000 redeemable deferred shares of GBP 1 each (the 'Redeemable Deferred Shares') to AAML. In accordance with approval of High Court in London on 22 October 2019, these shares were reduced to Nil and the amount was paid to the shareholder.

   

14. Contingent liabilities and commitments

 

(i)  Contingent liabilities

 

 

As of

 

 

31 March 2021

31 March 2020

 

 

 

 

(i) Taxes, Duties and Other demands (under adjudication / appeal / dispute)

 

 

 

-Income tax

 

23

  30

- Value added tax

 

30

  56

-Customs duty & Excise duty

 

8

  7

-Other miscellaneous demands

 

9

  13

(ii) Claims under legal and regulatory cases including arbitration matters

 

87

  83

 

 

  157 

  189

 

There are uncertainties in the legal, regulatory and tax environments in the countries in which the Group operates and there is a risk of demands, which may be raised based on current or past business operations. Such demands have in past been challenged and contested on merits with appropriate authorities and appropriate settlements agreed. Other than amounts provided where the Group believes there is a probable settlement and contingent liabilities where the Group has assessed the additional possible amounts, there are no other legal, tax or regulatory obligations which may be expected to be material to the financial statements.

The movement in contingent liabilities during the year ended 31 March 2021 of USD 32m primarily comprises of reduction in a Value added tax (VAT) and withholding tax assessment received by one of the subsidiaries of the Group amounting to USD 23m.

One of the subsidiaries of the Group is involved in a dispute with one of its distributors, with respect to alleged unpaid commissions, bonuses and benefits, totalling approximately USD 12m, over a period of around eleven years of its business relationship with the subsidiary. In March 2012, the distributor filed a claim against the subsidiary in the High Court. On 4 October 2016, the High Court ruled against the subsidiary and ordered to pay the claimed amount of approximately USD 12m to the distributor. On 5 October 2016, the subsidiary filed an appeal in the Court of Appeal against the order of the High Court, which on 24 July 2020 was ruled against the subsidiary. On 7 August 2020, the subsidiary filed an appeal against the decision of the Court of Appeal, in the Supreme Court. Record of appeal has been transmitted to the Supreme Court and briefs of argument are currently being prepared.

Despite the strength of the subsidiary's line of defence, as both the High Court and Court of Appeal have ruled against the subsidiary, it is appropriate to disclose this matter as contingent liability for USD 12m, pending the decision of the Supreme Court. No provision has been made against the said claim.

 

 Guarantees:

Guarantees outstanding as of 31 March 2021 and 31 March 2020 amounting to USD 12m and USD 10m respectively have been issued by banks and financial institutions on behalf of the Group. These guarantees include certain financial bank guarantees which have been given for sub judice matters, the amounts with respect to these have been disclosed under capital commitments, contingencies and liabilities, as applicable, in compliance with the applicable accounting standards.

 

(ii) Commitments

 

Capital Commitments

The Group has contractual commitments towards capital expenditure (net of related advances paid) of $232m and $234m as of 31 March 2021 and 31 March 2020 respectively.

 

15. Related Party disclosure

 

(a)  List of related parties

 

i.  Parent company

Airtel Africa Mauritius Limited

ii.  Intermediate parent entity

Network i2i Limited

Bharti Airtel Limited

Bharti Telecom Limited

iii.  Ultimate controlling entity

Bharti Enterprises (Holding) Private Limited. It is held by private trusts of Bharti family, with Mr. Sunil Bharti Mittal's family trust effectively controlling the company.

iv.  Associate

Seychelles Cable Systems Company Limited

v.  Other entities with whom transactions have taken place during the reporting period

a.  Fellow subsidiaries

  Bharti Airtel International (Mauritius) Limited

  Nxtra Data Limited

  Bharti Airtel Services Limited

  Bharti International (Singapore) Pte Ltd

  Bharti Airtel (UK) Limited

  Bharti Airtel (USA) Limited

  Bharti Airtel (France) SAS

  Bharti Airtel Lanka (Private) Limited

  Bharti Hexacom Limited

b.  Other related parties

  Airtel Ghana Limited

  Singapore Telecommunication Limited

vi.  Key Management Personnel ('KMP')

a.  Executive director

 Raghunath Venkateswarlu Mandava

b. Non-executive directors

  Sunil Bharti Mittal

  Awuneba Ajumogobia (since April 2019)

  Douglas Baillie (since April 2019)

  John Danilovich (since April 2019)

  Andrew Green (since April 2019)

  Akhil Gupta

  Shravin Bharti Mittal

  Annika Poutiainen (since April 2019)

  Ravi Rajagopal (since April 2019)

  Arthur Lang (till October 2020)

  Kelly Bayer Rosmarin (since October 2020)

c.  Others

Segun Ogunsanya 

Ian Ferrao (since September 2019)

Michael Foley (since February 2020)

Jaideep Paul

Razvan Ungureanu

Luc Serviant (since December 2019)

Daddy Mukadi

Neelesh Singh

Ramakrishna Lella

Olivier Pognon

Rogany Ramiah (since May 2019)

Stephen Nthenge (since May 2019)

Vimal Kumar Ambat (since February 2021)

Ashish Malhotra (since October 2020)

Vinny Puri (since March 2021)

 

In the ordinary course of business, there are certain transactions among the Group entities and all these transactions are on arm's length basis. However, the intra-Group transactions and balances, and the income and expenses arising from such transactions, are eliminated on consolidation. The transactions with remaining related parties for the years ended 31 March 2021 and 2020 respectively, are described below:

The summary of transactions with the above-mentioned parties is as follows:

 

For the year ended

 

31 March 2021

31 March 2020

Relationship

Parent  company

Intermediate parent entity

Fellow

subsidiaries

Associates

Other

related

parties

Parent  company

Intermediate parent entity

Fellow

subsidiaries

Associates

Other

related

parties

Sale / rendering of services

 - 

6

66

 - 

1

-

8

84

-

0

Purchase / receiving of services

 - 

17

52

1

0

-

26

64

1

0

Rent and other charges

 - 

1

 - 

 - 

 - 

-

1

-

-

-

Guarantee and collateral fee paid

 - 

10

 - 

 - 

 - 

-

11

-

-

-

Purchase of assets

 - 

0

0

 - 

 - 

-

-

9

-

-

Dividend paid

95

 - 

 - 

 - 

 - 

63

-

-

-

-

 

 

The outstanding balance of the above-mentioned related parties are as follows:

Relationship

Parent company

Intermediate parent entity

Fellow subsidiaries

Associate

Other related parties

As of 31 March 2021

 

 

 

 

 

Trade payables

-

9

29

1

2

Trade receivables

 -

 3

 37

 - 

 3

Corporate guarantee fee payable

 -

 2

 - 

 - 

 -

Guarantees and collaterals taken (including performance guarantees)

 -

 7,056

 -

 -

 -

 

 

 

 

 

 

As of 31 March 2020

 

 

 

 

 

 

 

 

 

 

 

Trade payables

-

20

32

0

1

Trade receivables

-

3

24

-

1

Corporate guarantee fee payable

-

4

-

-

-

Guarantees and collaterals taken (including performance guarantees)

-

7,056

-

-

-

 

Key management compensation

KMP are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including any director, whether executive or otherwise. For the Group, these include executive committee members. Remuneration to key management personnel were as follows:

 

For the year ended

 

31 March 2021

31 March 2020

 

 

 

 

 

 

Short-term employee benefits

8

  7

Performance linked incentive

3

  2

Share-based payment

1

  0

Other long-term benefits

4

  2

Other benefits

  2

 

17

  13

 

16. Fair Value of financial assets and liabilities

The category wise details as to the carrying value, fair value and the level of fair value measurement hierarchy of the Group's financial instruments are as follows:

 

 

Carrying value as of

Fair value as of

 

31 March 2021

31 March 2020

31 March 2021

31 March 2020

Financial assets

 

 

 

 

 

 

 

 

 

 

 

FVTPL

 

 

 

 

 

Derivatives

 

 

 

 

 

- Forward and option
  contracts

Level 2

12

  9

12

  9

- Currency swaps and
  interest rate swaps

Level 2

0

  2

0

  2

- Cross currency swaps

Level 3

1

1

Investments

Level 2

0

  0

0

  0

 

 

 

 

 

 

Amortised cost

 

 

 

 

 

Security deposits

 

8

  7

8

  7

Trade receivables

 

113

  132

113

  132

Cash and cash equivalents

 

813

  1,010

813

  1,010

Other bank balances

 

282

  6

282

  6

Balance held under mobile money trust

 

440

  295

440

  295

Other financial assets

 

75

  67

75

  67

 

 

 

 

 

 

 

 

1,744

  1,528

1,744

  1,528

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

FVTPL

 

 

 

 

 

Derivatives

 

 

 

 

 

- Forward and option
  contracts

Level 2

6

  4

6

  4

- Currency swaps and
  interest rate swaps

Level 2

2

  0

2

  0

- Cross currency swaps

Level 3

3

 

3

 

- Embedded derivatives

Level 2

1

  3

1

  3

 

 

 

 

 

 

Amortised cost

 

 

 

 

 

Borrowings - fixed rate

Level 1

2,403

  2,353

2,479 </