A resilient business with consistent double-digit growth and stronger performance in Q2
Key highlights
- The customer base grew by 12.0% to 116.4 million
- Revenue on a reported basis increased by 10.7% to $1,815m, with Q2 revenue growth of 14.3%
- Revenue growth in constant currency was 16.4% in H1, and 19.6% in Q2. Growth was recorded across all regions:
Nigeria up 20.2%, East Africa up 21.9% and Francophone Africa up 4.4%, and services, with voice revenue up by 7.0%, data by 33.4% and mobile money by 30.4% - Underlying EBITDA increased 12.8% to $812m while constant currency underlying EBITDA growth was 19.3%
- Reported underlying EBITDA margin was 44.7%, up by 85 bps (110 bps in constant currency)
- Operating profit increased by 19.5% to $472m, an increase of 28.3% in constant currency
- Free cash flow was $319m compared to $210m in the same period last year
- Basic EPS was $3.0¢, down 52.9% largely as a result of exceptional items and a one-off derivative gain incurred in the prior year. Excluding these one-off benefits, basic EPS would be up 19%. EPS before exceptional items was $3.0¢
- The board declared an interim dividend of $1.5¢ per share in line with the new progressive dividend policy to focus on growth opportunities and faster deleveraging. The new 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 falls below 2.0x
GAAP measures
Revenue
In the 6 months, ended 30 September 2020, revenue on a reported basis increased by 10.7%, with constant currency growth of 16.4% partially offset by currency devaluation, mainly in Nigeria (6.5%), Zambia (51%) and Kenya (4.5%). As restrictions on the movement of people eased in Q2’21, reported revenue growth accelerated to 14.3% and 19.6% in constant currency.
Constant currency growth of 16.4% was largely driven by the customer base growth of 12.0%, to 116.4 million and ARPU growth of 4.3% in constant currency. Revenue growth was recorded across all the regions: Nigeria up 20.2%, East Africa up 21.9% and Francophone Africa up 4.4%. Revenue growth was broad-based across all segments: voice up 7.0%, data up 33.4% and mobile money up 30.4% in constant currency terms.
Operating profit
Reported operating profit for the half-year was $472m, up by 19.5%, as a result of strong revenue growth and lower operating expenditures in proportion to revenue. Operating profit in constant currency grew by 28.3%.
Net finance costs
Net finance costs increased by $43m, driven by higher other finance costs which more than offset the reduced interest costs of $8.7m as a result of lower debt. Increase in other finance costs was primarily driven by $46m of derivative gains which occurred in the comparable period in the prior year.
Taxation
Total tax charges for the period amounted to $136m as compared to $88m in the comparable period last year. This was due to higher operating profit and withholding tax on OPCO dividends. The H1’20 also benefited from higher deferred tax credit recognition of $27m as compared to $9.6m in H1’21.
Profit after tax
Profit after tax was $145m, down by 36.6%, largely as a result of the recognition in the prior year of a one-off gain of $72m related to the expired indemnity to certain pre-IPO investors, as well as higher finance costs and tax in the current period. Excluding the benefit of exceptional items and one-off derivative gain of $46m in the prior period, profit after tax has increased by 31.8%.
Basic EPS
Basic EPS was at $3.0 cents, down by 52.9%, as a result of higher other finance costs due to a $46m derivative gain in the prior period, increase in tax charges due to higher operating profit and withholding tax on dividend, higher non-controlling interest, and the recognition in the prior year 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. Excluding exceptional items and the one-off $46m derivative gain, basic eps would be up 19%.
