Earnings call transcript: Airtel Africa reports strong Q4 2025 growth despite stock dip

Airtel Africa (AAF), with a market capitalization of $8.28 billion, reported a robust performance for the fourth quarter of 2025, with a 23.2% increase in constant currency revenue growth. The company’s full-year revenue reached $4.95 billion, driven by significant gains in mobile money services and network expansion. Despite these positive financial results, Airtel Africa’s stock price fell by 8.46% to $155.90, reflecting investor concerns over declining EBITDA and future capital expenditures. According to InvestingPro analysis, the company currently trades at a relatively high P/E ratio of 115x, suggesting premium market expectations for future growth.

Key Takeaways

• Airtel Africa’s Q4 constant currency revenue growth was 23.2%.
• Full-year revenue reached $4.95 billion, with a 21.1% growth in constant currency.
• Stock price dropped 8.46% following the earnings announcement.
• EBITDA experienced a decline of 5.1% in reported currency.
• Mobile money transaction value increased by 32%.

Company Performance

Airtel Africa demonstrated strong revenue growth in the fourth quarter, primarily driven by its mobile money services and increased smartphone penetration. The company continues to expand its network across Africa, capitalizing on the region’s low smartphone penetration and high cash-based transaction rates. Despite a challenging economic environment, Airtel Africa has maintained its leadership position in mobile money services, a key growth area for the company.

Financial Highlights

• Revenue: $4.95 billion for the full year, reflecting a 21.1% growth in constant currency.
• Earnings per share (EPS): $0.82, a substantial increase from $0.10 the previous year.
• EBITDA: $2.3 billion, a 5.1% decline in reported currency.
• EBITDA margin: 46.5% for the full year.
• Normalized free cash flow: $213 million.

Outlook & Guidance

Airtel Africa plans to continue its network expansion and improve cost efficiencies. The company is set to increase its capital expenditures to between $725 million and $750 million next year. Additionally, Airtel Africa is preparing for an Airtel Money IPO in the first half of 2026, which is expected to further boost its financial services segment. InvestingPro analysis reveals several positive indicators, including expected net income growth and strong financial health metrics. Subscribers can access 12 additional ProTips and detailed valuation metrics for deeper insights.

Executive Commentary

"Our purpose is to transform life across Africa by bridging the digital divide," stated Sunil Tadar, CEO of Airtel Africa. This strategic focus on digital infrastructure and financial inclusion is central to the company’s growth plan. CFO Jadeep highlighted, "We continue to see a substantial return to our shareholders," emphasizing the company’s commitment to delivering shareholder value despite market challenges.

Risks and Challenges

• Declining EBITDA in reported currency could pressure profit margins.
• Increased capital expenditures might strain financial resources.
• Market saturation in some regions could limit growth potential.
• Macroeconomic pressures and currency fluctuations pose risks.
• Competition from other telecom providers and fintech companies.

Airtel Africa remains optimistic about its growth prospects, with a strong focus on expanding its digital services and network infrastructure to cater to the growing demand in Africa. However, the company faces challenges that could impact its future performance, including economic uncertainties and competitive pressures. For a comprehensive understanding of Airtel Africa’s position and potential, investors can access the detailed Pro Research Report available on InvestingPro, which provides in-depth analysis of the company’s financials, market position, and growth prospects.

Full transcript - Airtel Africa Plc (AAF) Q4 2025:

Conference Moderator: Good day, ladies and gentlemen, and welcome to the Airtel Africa Full Year Results for Year Ended March 2025. All participants will be in listen only mode. There will be an opportunity to ask questions later during the conference. Please note that this call is being recorded. I would now like to turn the conference over to Sunil Tadar.

Please go ahead.

Sunil Tadar, CEO/Managing Director, Airtel Africa: Thank you. Hello, everyone, and thank you all for joining us today. I have with me Jadeep, our CFO Kamal Dua, our Deputy CFO and Alastair, who heads who’s the Head of Investor Relations. Let me give you some brief highlights over the last year before running through our refresh strategy, which has been deployed across the organization, provide some context to the markets we operate in and give you give a brief run through of how these factors have contributed to a strong performance during the year. After that, I will hand over to Jadhi to run through financials.

Over the year, we faced continued uncertainty in the economic and operating environment, but more recently, it has been encouraging to see some easing of this volatility in our markets. However, we’ve been consistent in our focus on deploying our refresh strategy, which really puts the customer experience at the top of the list. In addition to our strategic focus, what has been operating across our business over the last few years is the essential nature of our services. Our customers have significant challenges in many of our markets, but demand for our services has remained strong. It is this that has contributed to some strong trends over the course of the year with constant currency revenue growth accelerating to over 23% in quarter four from 19% in quarter one.

This combined with the launch of a cost efficiency program has helped deliver or drive EBITDA margins higher reaching 47.3% in in the final quarter, a strong recovery from Q1 levels, and we continue to retain our position as an industry leader in terms of operating efficiencies. Importantly, our focus on derisking the balance sheet has enabled not only continued investments in our network to sustain our growth, but it’s also provided the foundation to continue returning cash to shareholders. Over the last five years, we’ve returned over $1,100,000,000 to shareholders, which continues to reflect a strong track record despite macroeconomic volatility. Importantly, we remain well positioned to deliver on not only the opportunity in our existing product and services, but also in our ability to capture the strong growth potential in other new services, particularly in the enterprise space. Our purpose is to transform life across Africa by bridging the digital divide and drive financial inclusion through the continued rollout of our mobile money services.

Over the year, we have been we have seen smartphone penetration rise by over four percentage points as demand for data services, drives increased digital inclusion. Furthermore, a 17.3% growth in mobile money customers and a 32% increase in transaction value in constant currency on Airtel Money platform highlights our success in driving financial inclusion across our markets. Being a business that is resistant to challenging operating environment has ensured that we continue to capture the growth opportunity available to us. This has been reflected not only this year, where we’ve seen a strong acceleration in revenue growth, but also over the last five years, we have consistently reported double digit constant currency growth with revenue with revenues growing at a CAGR of over 19% and industry leading EBITDA margins. Earlier this year, we launched a comprehensive cost efficient cost efficiency program targeting structural ongoing efficiencies, which will not impact our growth ambitions.

We are seeing clear progress with EBITDA margins expanding 200 basis points between quarter one and quarter four and revenue growth accelerating at the same time. We remain optimistic on our ability to realize further efficiencies. Over the year, we have continued investing in capacity and coverage with further site expansion and fiber network rollout supporting our ambition to expand coverage and capacity to drive a great customer experience. In addition, we have materially reduced our exposure to dollar debt with 93% of market debt based in local currency, which is up from 83% a year ago. The overall performance across the group has enabled the Board to reiterate its existing dividend policy with a further 9% increase in our final dividend.

Next slide. This slide serves as a reminder of how our operating environment has improved over the course of the year. We’ve seen accelerating trends in key operating performance metrics as well as financial metrics. From an operational perspective, the focus on our strategy around getting closer to our customers and focusing on expanding our network has resulted in a step up in customer additions and smartphone pickup with a further acceleration in data ARPU growth to 17% in constant currency in the second half of the year. For mobile money, we’ve seen transaction value also increase in the second half as the expansion of our use cases and continued customer adoption drives strong operating performance.

Finally, this has resulted into strong financial performance with accelerating growth in revenues and continued cost optimization driving a sequential increase in EBITDA margins throughout the year. Let me now spend a few minutes explain explaining the significant opportunities across our markets and how our refreshed strategy will enable us to continue executing on this opportunity. The one thing that my travels across the region has confirmed is the scale of the opportunity across our our footprint. From a high level, we have a population of over 660,000,000 people, which is expected to grow to by around 3% every year. The opportunity is compounded by how young this population is, giving us a unique opportunity to continue growing our customer base.

In addition, giving the low levels of smartphone penetration, the opportunity for growth in data services is unparalleled and is expected to continue to be in the foundation for further growth. In addition, we have a unique ability to also offer financial services to our customers, driving increased financial inclusion. As many of you are aware, over 90% of all transactions in Africa are cash based, and our unique distribution network will enable us to capture a significant share of these transactions that will inevitably move traditional platforms. However, the opportunity is not only in consumer. The b to b or enterprise segments offers a particularly encouraging avenue for growth, and we’re actively working on capturing this demand as the digital infrastructure across the continent evolve.

To execute against this exciting opportunity, we refreshed our strategy to highlight how we intend to maximize our right to win across the continent. The primary focus of this refresh strategy is to ensure a great customer experience. By embedding this in our mindset and our day to day operations, I believe we can truly differentiate ourselves from our competition. Firstly, we must strengthen our go to market, which is essentially essentially our ability to differentiate to a superior distribution network, enabling us to reach those previously may have been unconnected. Secondly, a brilliant network experience is fundamental to ensuring our customers remain connected and in many cases can access a network for the first time as we continue to invest in network capacity and coverage across our footprint.

There are also clusters of opportunity which which have been identified across the outpost, which have been called out as must win markets. From micro marketing, using network and digital tools, we can strengthen our presence in these clusters. In the fourth pillar, we focus on the importance of digitizing and simplifying our product offerings to to provide simplicity to the customer journey, and we continue to migrate towards the digital age. The importance of simplifying the customer journey will always be increasingly important to accelerate customer acquisition, but also improve customer retention. Money remains a fundamental part of our strategy and is key to our ambitious, ambitions across the the footprint.

Accelerating the adoption of Airtel Money not only improves our customer proposition, but also has the additional benefit of driving improved financial inclusion. And finally, our sixth pillar reflects the significance of the adjacent sectors across our markets, which remain untapped. Our infrastructure across the continent also provides us with a unique opportunity to offer a full integrated suite of offerings to the enterprise segment and and enhance our customer proposition with the HPE offering. Underpinning the strategy is the relentless focus on cost optimization to support our ambition for growth and in continued investment into people and talent across the region. Our sustainability strategy remains a key support for our purpose of transforming lives and acting as as a responsible business.

In the context of next, in the next few slides, I want to reflect on how our strategy has supported the continued momentum we have seen in both the operating and financial aspects of the telecom business as well as the mobile money business. Starting off with the mobile services, our go to market strategy has been key in getting closer to our customers. We continue to invest in increasing the number of customer touch points to reduce friction so we can upsell our existing customers to enhance lifetime value. This has also been supported by our digitalization strategy through the continued focus on our app to make it easier for customers to recharge, sign up to new services. This combined with our sustained network investment has contributed to the continued expansion of the customer base with a particularly encouraging growth in smartphone customers across the network.

In this slide, we look at how this operating performance has translated into strong results. As a result of the very strong demand for both voice and data services, the usage across our network continues to grow. One area that makes us unique is the continued growth in voice minutes as many customers use our services for the first time. Data usage per customer also continues to grow and is now at seven gigabytes per month, which remains well below some of the global payer growth. The result is data traffic across our network increasing by over 47% during the year.

This strong demand and our investment into the network to support this demand has resulted in an accelerating growth in constant currency to 19.6% in the year and almost 22.4% in quarter four. However, it is worth noting that for the last five years, we have consistently seen strong growth in both revenues and EBITDA for mobile services division. In fact, on a five year basis, revenue and EBITDA CAGR has been 17.520.5% respectively in constant currency. It is this track record that I believe sets us up apart in the telecom industry. Now moving on to mobile money business.

Mobile money services is is all about driving increased financial inclusion across our markets. Low levels of financial inclusion have been one key reason for the consistent customer base growth. The facilitator of this growth is not only our agent network, but also the partnership we have with the GSM business, which has enabled customers has enabled customer uptake. We’ve seen strong success in penetrating the JSON customer base, but with only 27% of our customer using early money, the opportunity remains substantial. We’ve also seen great momentum in the in the take up of the My Airtel app for customers, merchants, agents that simplify the customer journey and drives import function improved functionality.

It has also been reinforced by the trust that has been built up through the provision of easy to use services with a focus on float availability so customers can access their cash with relative ease as and when they need it. Cable Money is very well positioned in a dynamic and rapidly expanding ecosystem that is digitizing cash based economies and advancing financial inclusion. We continue to expand the use cases to meet the diverse needs of individuals and businesses from deposits and withdrawals to merchant payments, enterprise, and customer centric financial solutions. Slide 12 demonstrates the continuing evolution of our mobile money ecosystem with transaction value of hundred and $36,000,000,000 in reported currency. We’ve seen the makeup of transactions shift towards newer, more advanced services such as bill pay and merchant services as the ecosystem continues to grow.

Once again, this success has translated into strong financial momentum with constant currency revenue growth of almost 30%, translating into revenues of approximately 1,000,000,000 with an EBITDA margin of 52.8%. Once more, the track record speaks for itself. Over the last five years, we have consistently seen very strong revenue and EBITDA CAGR growth of well over 30%, reflecting the very strong momentum in the business. Let me now briefly call out the key conclusion from our recent performance in Nigeria region. Demand for our services in Nigeria has been maintained and this has translated into strong revenue growth momentum despite the impact of barring of customers following the KYC directives issued by the regulator.

Revenue growth accelerated in the last quarter to over 40%, partly reflecting the tariff adjustment that we were implemented, but for the year, we are encouraged by the constant currency growth of 36.7%. EBITDA margins of 49.7% have been particularly impacted by the increase in diesel prices over the last year. However, we have seen sequential improvement in margins over the last quarter with EBITDA margins of 52.6% in quarter four, reflecting a strong focus on cost initiatives and strong revenue growth. East Africa in East Africa, trends remain strong with constant currency revenue growth of 21.8%. In quarter four, constant currency revenue growth of 20.7% translated into reported currency growth of 22.6% as currency headwinds eased, with Uganda and Kenya seeing currency appreciation versus a year ago.

Data trends also remain remain encouraging with over 26% growth in data revenues driven by continued demand across the region. Despite the inflationary pressures on the cost base from rising diesel costs, the EBITDA margins remained stable over the period. Moving on to The performance in the Francophone region has been very encouraging. Despite continued pressures from inflation, we’ve seen growth accelerate sharply during the year as our continued focus on growing our customer base has translated into strong financial momentum. In quarter one, constant currency revenue growth in Francophone region was 5.2%, but through our continued focus on our strategy and easing macro and political headwinds, we’ve seen growth accelerate to 15.7% in quarter four.

This improved revenue performance supported a continued improvement in EBITDA margins during the year with quarter four EBITDA margins up hundred and five basis points over the year. Growth of the enterprise segment and the scale of the SME sector provides a unique opportunity for us to tailor our services towards the ever evolving needs of the enterprise segment. The recent activation of two Africa’s summary cable, which combined with our fiber footprint of almost 80,000 kilometers across the continent, enables us to offer reliable, resilient capacity to our existing corporate customers, whilst also attracting new customers to offer a unique service at scale across the continent. In addition, the ability to leverage our strong network presence and the continued investment into four g and five g services provides us with a unique opportunity to offer home broadband services to our customer base. The enterprise and HPB offerings provides us with an additional lever for growth in future years, and we continue to invest in order to capture this opportunity in the future.

In conclusion, hopefully, this summarizes our position across the market and reflects our track record and execution against the opportunity we have across Africa. Importantly, we believe in our strategy and the execution of this strategy is integral to capturing these opportunities. Let me now hand hand over to JT to run through financials. Thank you, Sunil, and good afternoon to all of you. Let me start with the key financial highlights.

Our revenue in reported currency at 4,950,000,000.00 and the full year growth has been impacted by severe currency devaluation, especially in Nigeria in FY 2024, while quarter four reported currency revenue growth has been recorded at 17.8%. As you are aware, Nigeria witnessed the most significant devaluation in FY ’24. Naira devalued from $4.61 naira a dollar in March 23 to $13.00 3 in March 25 sorry, March 24 and further to $15.42 in March 25. Currently, NIRA has been by and large stable at around $15.50 to 1,600 a dollar. We continue to deliver good underlying results despite these currency headwinds, which we faced over the last, twelve to eighteen months.

Revenue growth for the full year was above above 21% in constant currency, which accelerated to 23.2% in quarter four, partially benefiting from the tariff adjustment in Nigeria. EBITDA in reported currency at $300,000,000 declined by 5.1% due to cascading impact of currency devaluation and inflation witnessed in prior year. However, in constant currency, the EBITDA grew by 18%. EBITDA margin for the full year at 46.5% declined by 120 basis points in constant currency. However, as we realized the benefit from the cost efficiency initiatives, along with relatively stable macroeconomic environment in the current year, margins have expanded from 45.3% in quarter one to 47.3% in quarter four.

Constant currency margin for the quarter four was 47.5%. Our $670,000,000 CapEx investment was below guidance due to deferral of the data center investment, especially in Nigeria. The operating free cash flow at $600,000,000 declined 3.4% largely due to lower reported currency EBITDA, partially offset by the lower CapEx. Leverage at 2.3 times increased from 1.4 times, reflected the additional impact of tower contract renewal on increasing lease liabilities. Lease adjusted leverage at one times, up from 0.7 times in previous year.

EPS before exceptional item at $0.82 was impacted due to translation impact of currency devaluation and impact of tower contract renewal. The Board has recommended a final dividend of $0.39 per share, thereby making a total dividend for FY ’twenty five of $0.65 up 9.2 vis a vis last year, in line with our current dividend policy. Next slide. This slide gives us an overview of our improved performance over the last four quarters. Revenue growth in constant currency continues to accelerate with 2% improvement to reach 23.2 in quarter four, which also partially benefited from tariff adjustment in Nigeria.

These revenue trends clearly demonstrate the strong demand of our services in the market we operate. We have seen a substantial improvement in EBITDA margin over the year, which improved from 45.3% in quarter one to 47.3% in quarter four. This trend reflects the effectiveness of our ongoing cost efficiency program along with a stable operating environment during the year. We continued our de dollarization program to limit exposure to foreign currency denominated debt. Over 93% of Opco debt is now in local currency, which has marked improvement from 83% of last year.

Coming to the next slide, the overall revenue growth was 21.1% in constant currency, while in reported currency, revenue declined by 0.5%. And this chart gives you the idea that $923,000,000 was the currency translation impact because of the devaluation. Reported revenue growth in current year was impacted because of that. However, in constant currency, the growth continued to be over 20%. And the fourth quarter reported currency revenue growth was 17.8%.

All the key service segment grew double digit, while voice revenue up 11%, data and mobile money revenue up by 30% on a year on year basis. Next slide. The group EBITDA absolute EBITDA declined by 5.1% in reported currency to $2,300,000,000 However, in constant currency account, the EBITDA grew by over 18%. The adverse impact on EBITDA amounted to $493,000,000 due to currency devaluation, primarily in Nigeria, mainly due to the cascading impact of currency devaluation and inflation witnessed in the previous year. Group EBITDA margin decreased by two twenty eight basis point in reported currency, reaching 46.5% for the full year.

In constant currency terms, the margin declined by 120 basis point. The steeper decline in reported currency margin was largely due to the lower contribution from Nigeria in the overall portfolio following significant niger devaluation. Out of $426,000,000 increase in constant currency operating expense, dollars $256,000,000 was attributed to higher network cost, with approximately 50% of the increase was driven by the rising fuel price in Nigeria and few other market. We started the year with a lower margin of 45.3% in quarter one, improved to 47.5%. Despite these challenges, our cost efficiency initiative supported the margin improvement during the year, resulting in a two twenty basis point improvement in quarter four.

Our finance cost for the current year is $822,000,000 compared to $1,700,000,000 of last year. Last year, our finance costs included a significant impact of $1,200,000,000 due to currency devaluation, which is $179,000,000 in the current year. Excluding the ForEx and derivative losses, the finance cost has increased by $444,000,000, to last year to $643,000,000 in the current year, which is roughly about hundred million dollar in $200,000,000 increase. Last year had an impact of 1,200,000,000.0 on account of currency devaluation, which is $179,000,000 in the current year. The $200,000,000 increase in finance cost is primarily due to tower contract renewal and increased number of sites during the year, which contributed another $124,000,000 and an increase in the weighted average interest rate resulting in higher local currency debt due to the de dollarization program.

Coming to EPS, basic EPS was $06 in current year as compared to negative $0.44 in previous year. Our EPS before exceptional item was $0.82 in current year as compared to $0.10 in the prior year. The current year EPS has been influenced by several factors, an zero eight nine dollars impact due to currency devaluation, zero three three impact of interest and depreciation, higher interest and depreciation from the tower contract renewal and approximately $02 impact from the higher finance cost, which is explained because of the local currency debt increase in local currency debt, which comes at a higher cost. These were partially offset by NOK0.05 increase due to the higher operating profit, corresponding benefit of NOK0.1.02 in the tax charge. Coming to normalized free cash flow.

Our normalized free cash flow in the current year is $213,000,000 as compared to $234,000,000 of the last year. Reduction is largely due to decrease in reported currency EBITDA, and the reason for that has already been explained. The bridge between EBITDA and normalized cash flow is largely contributed by cash tax of $323,000,000 payment towards CapEx of seven CapEx vendor of $736,000,000 cash interest of $644,000,000, lease payment of $222,000,000, and intangible assets, which is basically, renewal of license and spectrum of hundred and $23,000,000, resulting into normalized free cash flow of $213,000,000 Our capital allocation policy remains the same. Our key priority remain to continuously invest in the business along with further strengthening of the balance sheet. Our full year CapEx was $670,000,000, which is below our guidance due to our decision to defer investment in data center business in Nigeria.

For the next year, our CapEx guidance is in between $725,000,000 and $750,000,000 as we continue to invest for future growth. The Nigeria data center work has already started in the current financial year, and that $90,000,000 has been allocated to Nigeria data center for the next year. Our lease adjusted leverage was impacted due to translation impact of currency devaluation on reported currency EBITDA and higher lease adjusted net debt. Returning cash to shareholder through our progressive dividend policy remain as our one of the key priorities. The Board has recommended a final dividend of S0.3.9 dollars making a total of S0.6.5 dollars per share, reflecting a growth of 9.2% in line with our current dividend policy.

We completed the first share buyback program during the year, returning $100,000,000,000 to the shareholder. The second buyback program of another $100,000,000 was launched in two tranches, out of which a further $45,000,000 has been returned to the shareholder, which was completed on April 24. The second tranche of balance $55,000,000 out of the second share buyback program will be launched soon. We continue to focus on strengthening our balance sheet by firstly reducing our foreign currency debt across OPCO’s. Polkadet is now zero post repayment of bond in May 24.

Secondly, OpCo local currency market debt increased by $650,000,000 as we continue to execute on debt pushdown strategy. Over 93% of the opco debt in local currency, up from 83% a year ago. Leverage at 2.3 times has increased from 1.4 times compared to last year, primarily on account of increase in lease liabilities related to tower contract renewal and increase in market debt. Lease adjusted leverage at 1x increased from 0.7x in last year, but primarily impacted by increase in the market debt by approximately $200,000,000 Continuous strong operational and financial performance has translated to the substantial return to our shareholder in the last few years. As mentioned earlier, we have returned over $1,100,000,000 in last five years by way of dividends and share buyback program.

Let me now hand over to Sunil for his concluding remarks. Thanks, Adeeb. Finally, on Slide 28, just a few words on summary and outlook. As you’ve seen from our results, our strategic focus has consistently driven positive momentum across the business and reflects a strong track record in execution. Key to delivering value to our stakeholders is to drive continued growth across our base.

Our focus will remain on investing in our network and on and on further expanding our distribution to be closer to our customers, whilst at the same time looking at new opportunities for growth. Over the last few years, there’s been continued volatility in the macro environment, but more recently, we’ve seen some signs of stabilization, which is encouraging. Our ability to navigate these challenges while sustaining a strong track record in operational and financial performance reflects our success in executing against this opportunity, and we will continue to do so. We will also remain focused on EBITDA margin improvements subject to macroeconomic stability. I know many of you will be wanting to get an update on the IPO of Airtel Money.

We are making significant progress towards the IPO, and we remain committed to this objective. However, we are also mindful of the evolving capital market conditions, and therefore, subject to these market conditions, we anticipate an IPO in the first half of calendar year 2026. As many of you know, the IPO was part of the commitment with the minority investors when we sold a stake in 2021. It is worth noting, and I would like to underscore this, that the minority investors, being members of the board and the IPO committee, have been very involved in the discussions around the logic behind a delay in the IPO. And with that, I would like to thank you all for your attention today, and we would like we would now like to open the floor for questions.

Conference Moderator: Thank you. Ladies and gentlemen,

Unidentified Speaker: you.

Conference Moderator: The first question we have is from Cesar Tyrone of Bank of America. Please go ahead.

Unidentified Speaker: Yes, hi. Thanks for the call and the opportunity to ask questions. I have three, if that’s okay, but they’re very easy. The first one, I wanted to check if the price hikes you’ve implemented in Nigeria were implemented, I think, in the February, if I recall. So they’ve only impacted really Q1 numbers sorry, well, calendar year Q1 numbers for only five weeks.

So therefore, should we expect that we will see a further reacceleration from the 40% that reported in the last quarter? That’s the first one. The second one, in light of lower potentially fuel prices, right, I mean, which we’ve seen, does it also impact retail prices in Nigeria? And can you also remind us the sensitivity on your Nigerian margins? And then the third one on the potential delay of the Airtel Money IPO.

Could you please remind us the put and close agreements? I think it’s puts agreements that you have with your partners and whether they have committed to not exercise the puts due to the delay or if there’s a risk that these puts can be can be exercised by the time of the of the IPO? Thank you.

Sunil Tadar, CEO/Managing Director, Airtel Africa: Alright. Thank you very much for those questions. Let me first, you know, address your first question on Nigeria, the price adjustments. Firstly, we are grateful to the Nigerian authorities for the approvals that we received, which we see as supportive for the industry and support continued investments into digital infrastructure across Nigeria. With regards to the impact of these tariff adjustments on our business, the approvals are very clear are clearly very positive development.

And combined with the recent signs of macro stability, we expect a positive outcome to our business. Following these developments, we have noted we have implemented our tariff adjustments in the quarter, which partly contributed to an acceleration in revenue growth in quarter four financial year quarter four twenty five. Now we will we will remain vigilant around tariff adjustments that are made also by our competitors and be flexible in our approach to pricing, but there have been some benefit flowing through to the revenue and EBITDA line. Now with this and as a result, it’s, you know, too early to to conclude on the ultimate impact that this will have on our business because as you said, these these, you know, have gone in the last four to five weeks of the last financial. And very briefly touching on on the question that you asked on the impact on customer.

See, given the unprecedented circumstances, it is it is a little difficult to judge the impact the exact impact these tariff adjustments will have on the business in terms of growth acceleration. We have seen some impact definitely in quarter four. You know, before the price adjustment, our business was growing in in 30 or 35%, which accelerated to about 40% in in quarter four. However, having said that, we do see the you know, with the implementation of of these the the of of of the tariff amendments as as a as a positive development, the customers are also adapting to to the tariffs. And we’ve seen slight impact, but normally, we see this happen in every price adjustment.

There is a slight impact in the customers get get used to it, and we will see this you know, we’ll be able we’ll be in a better position to to comment on this as the price adjustments unfold, you know, in in the in this quarter. So by the end of this quarter, we will we’ll actually be able to give a more definitive answer as to what has been the impact. But so far, we’ve seen revenue acceleration in quarter four. We’ve seen, you know, some impact of us, you know, titrating of of consumption by customers. The real impact will be felt in this quarter as the pricing impact in last quarter was about four to five weeks, as you just said.

Now on your next question on on the on the IPO. See, on the IPO, you know, let me just just talk about two things. The first is if you look at our able money is a great business that continues to deliver exceptional performance with consistent year on year growth in the range of about 25 to 30%. The business remains highly profitable with exceptional cash flow generation, which affects the strength of our model and operational excellence. We firmly believe that listing earning money is the right strategic path forward.

We are making strong progress in our IPO preparations and remain firmly committed to this objective. While minute while maintaining flexibility in response to evolving financial conditions subject to market dynamics, we anticipate, as I said, a potential listing in the first half of calendar twenty six. Now specifically on, on our minority investors, we continue to have constructive and transparent engagement with our strategic investors. There is a shared understanding that the business is doing exceptionally well and that aligning the IPO with the growth trajectory target for the first half of twenty twenty six serves the best interest of all stakeholders. We are collaboratively working towards working together towards this common objective is is is how I would like to put it for, you know, to answer your question.

Yeah. The on the on the question of lower fuel fuel price sensitivities in Nigeria, so let me just put forward two things. One, the diesel is currently stabilized between 1,050 to 1,100 liter, and it is more or less stable at that level. Right? So if the diesel price further goes down, obviously, that benefit will be passed on to us because it’s most of the cases, it’s flow through or pass through.

Roughly 35% of our overall OpEx in Nigeria is relating to this energy cost. Also to add that our original strategy of, alternative source of energy like solar, battery, increased battery, those projects are also undergoing. And as we complete during the year these projects, those benefits will also start coming in. So if diesel price even remains stable and, we are able to execute our, our alternative source of energy strategy, we can definitely see some benefits coming in the P and L of Nigeria.

Alastair, Head of Investor Relations, Airtel Africa: Can we move on to the next question?

Conference Moderator: The next question we have is from Rohit Modi of Citi. Please go ahead.

Rohit Modi, Analyst, Citi: Thank you for the opportunity. I have three two please actually. Firstly, just to follow-up on Nigeria price hike. Can you confirm that you have you do have a bandwidth to have a further pricing price rise taking into account your 50% cap. But, I I think you haven’t you haven’t done all 50% so far.

So you do have a bandwidth, if you can confirm that. Second, is on your CapEx guidance. And I I remember, Terry, you last last year mentioned there’s 40,000,000 of data center CapEx that have been deferred to this year, which seems to be, like, deferred to now next year. But then if I look at absolute numbers of Nigeria, there’s still a bit of a decline, major decline in Nigeria CapEx. How do you look at your Nigeria CapEx intensity going forward?

How we are pleased, you know, with your capacity and networks in Nigeria as of now? Thank you.

Sunil Tadar, CEO/Managing Director, Airtel Africa: Yeah. See, on the Nigeria price increase, we have passed on, you know, the price increase, which was allowed price adjustment that was allowed by us. It was by the regulator to the extent of you know, to the maximum extent possible. So and this the impact of this price increase, as I said, you know, some portion of that has been realized in the last quarter. This quarter, the the real impact in terms of, you know, the revenue acceleration, also, you know, the customer impact will will be in a better position to to, you know, to talk about.

Now the next price price adjustment, you know, our expectation or our ask from the regulator was almost a %, you know, price adjustment given the the volatility that we’ve seen in in in that environment, both with with respect to price increase, also with respect to, you know, currency challenges that we face. Having said that, the next price price adjustment that that we will get is, you know, is is a is a little time away. We will not be able to comment on this at this point in time. So that’s on the on the Nigeria price increase. But whatever price adjustment that we were we were allowed has been passed on to the you know, has been passed on.

Now coming on the coming to the to the to the CapEx on see, the with respect to the, you know, the volatility that we’ve seen in the macroeconomic environment did require us to evaluate our CapEx spend given the uncertain uncertainty across the market. Now with a with a particular focus on directing CapEx to ensure a maximum return on that investment. However, there were other areas which contributed to to lower spend. During the year, there was an increased focus on efficiencies through negotiations with our CapEx vendors. In addition, there was an increased focus during the year on rollout of, you know, lean sites in our urban areas and top five towns given the need for infill sites.

But these are, you know, to provide better to provide better capacity and wherever and and and plug the coverage holes. Now on Nigeria, we have in in terms of see, the other aspect of our our CapEx investments is more on need based. So in terms of need, whatever the need in the business was from a radio side or, you know, back at backhaul or transmission, Those CapEx investments have been made in Nigeria, which is what we are seeing in in a total of $670,000,000 of capital investment that that we saw last year. We have enough capacity and enough network has been deployed to meet the rising demands of our our business, our customers in in Nigeria. And we remain committed to to providing the best in class experience and also drive further, you know, usage of, you know, voice or data and expand our coverage so that we remain ahead of the bond and we continue to drive usage in in Nigeria.

So, you know, there there is by no stretch this this CapEx has been in terms of both capacity or CapEx investments will will kind of impact our growth rates, you know, going forward.

Conference Moderator: The next question we have is from Mehdi Singh of HSBC. Please go ahead.

Mehdi Singh, Analyst, HSBC: Yes, hi. Thanks a lot for taking my questions. I have two short ones and a follow-up. The first question is on your performance in East Africa, which was actually very strong. So wondering if you could spell out the drivers behind it and specifically talking about Uganda where there was an MTR cut, what kind of impact did you have from that?

And did that had a role to play in the overall strong key strategic performance? Then the second question is on your buyback. I understand your first tranche is completed. So if you could talk about your procedural requirements, if any, to resume you know, the buyback, basically start the second tranche? And do you need, like, any further approval from anywhere or anyone board or at all?

You know, if you could talk about those things. And is share buyback going to be a, let’s say, a permanent feature in the shareholder remuneration or, you know, the current plan is more ad hoc dependent on the share price? So that’s the second question. And on the third question and the follow-up on the IPO delay, if you could talk about your thinking as yeah. Like, you know, what chances do you think is there that your investors, TPG, and it all will exercise the put option?

And in case they do, do you have options at your hand to handle handle that? What are the options you you if you could discuss scenarios there? Thank you.

Sunil Tadar, CEO/Managing Director, Airtel Africa: Thank you very much for those questions. I what I will do is I’ll take the first and the third question and then hand over to JD on the on the share buyback and if he has anything to add on the IPO over and above whatever I would say. So reflecting on East Africa, East Africa is a is a very strong business for us, and this business has been consistently performing well over the last few years. We have a, you know, very strong presence across both GSM as well as Mobile Money. Our execution in this market has been very, very strong.

We continue to make we have a very strong network, and we continue to make very smart investments in in networking in East Africa, you know, across all the markets. And that is what is driving our continuous, you know, our consistent performance, and this remains a very, very important area of focus for us. And, you know, we we will you know, as we have seen in the recent past, it’s been a very strong performance. With respect to your specific you know? And one of the reflection is is also a very strong base growth that we have, which is a reflection of, you know, that this this performance or position continue.

Now if you look at coming to your specific question on Uganda, MDR adjustment, MDR on our overall performance in Uganda or or in East Africa, therefore, the MDR has not had much of an impact. Actually, it’s a very significant impact because it’s been a predominantly on net market. So MDR has has not had much of an impact on the overall performance of of East Africa. Moving on to your question on on IPO. I will just repeat a little bit of what I just said, but, you know, try and address your specific query.

See, given that the minority shareholders have been closely involved in the process and is aware of both the progress being made towards an IPO and the strength of the underlying business, we believe they’re unlikely to exercise the production. That said, should the need arise, Kettle Africa has a strong balance sheet that can easily meet this meet put option obligations without compromising our growth strategy or capital allocation priorities. We also have ample debt capacity and can access financing quickly if required. In case the put option is exercised, our expected payout is capped at approximately 550 odd million dollars. And just to add what Sunil said on this, keep in mind that if this in the unforeseen event or unlikely event of this put option gets triggered, this is a temporary phenomenon because those shares on a prorated basis for to the extent of the the put option value, those shares will be come will be coming back to the majority shareholder, which is Airtel Africa PLC.

And then those shares are available to sell off during IPO and pay back the the debt, which which will which if at all it is required to be taken. So it’s a temporary phenomena which can happen. We have enough flexibility and headroom available to fund that kind of scenario. But as we said that at this moment, it is it seems unlikely, but we are we are also parallelly ready. Share by that.

On the share by that That’s I can

Mehdi Singh, Analyst, HSBC: Sorry. Just Rajit, just a quick follow-up on this one. The is there a technical requirement to do an IPO, or it’s simply listing the business?

Sunil Tadar, CEO/Managing Director, Airtel Africa: No. It’s a it’s a IPO. Okay. Listing what’s the difference between IPO and listing? I mean, in in a stock exchange

Mehdi Singh, Analyst, HSBC: In certain markets in certain markets, you can simply just list this in a certain number of shares without actually needing to, you know, like, selling them in the entire chunk.

Sunil Tadar, CEO/Managing Director, Airtel Africa: No. No. It could be public listing. The IP here, it is it is what we meant by IP is a proper public offering.

Mehdi Singh, Analyst, HSBC: Mhmm. Okay.

Sunil Tadar, CEO/Managing Director, Airtel Africa: On the share buyback, let me let me repeat. We we have so far done total total approval, which we received for $200,000,000, out of which 45 have been completed by twenty fourth of, this last month. The second one will we are in the in the final process of, you know, finalizing that our TLCs. And as of when those those are done, it will not take much time. Then the second balance, 55,000,000, will be will be launched in the market.

What will happen after that, it’s a prerogative which which is basically the board decision. So we I will not be able to comment on that at this stage.

Mehdi Singh, Analyst, HSBC: So as of now, share buyback is not really part of long term shareholder remuneration plan?

Sunil Tadar, CEO/Managing Director, Airtel Africa: No. As I said that the current one, we have to complete first. So once we come closer to the the completion, obviously, then it will be reevaluated, the whole proposal, and then that final decision will be taken.

Mehdi Singh, Analyst, HSBC: Got it. Thank you very much.

Conference Moderator: The next question we have is from John Caritas of Deutsche Bank. Please go ahead.

John Caritas, Analyst, Deutsche Bank: Thank you. I have a question on Airtel Money that has nothing to do with the IPO, if I may. To me, Airtel Money remains a bit of a black box in terms of which country contributes what proportion of its business. So I wonder if it’s possible for you to sort of paint a picture of the sort of key contributors by size please? And maybe just a sentence or two per market in terms of competition and the degree to which the market is mature or still developing?

Thank you.

Sunil Tadar, CEO/Managing Director, Airtel Africa: Okay. Before Sunil comes in, let me call out. If you refer to Page number 17 of the trading update, the RNS, you can see the region wise breakup. At least you have a fair sense of how this $1,000,000,000 revenue is constructed. But for everybody’s ease of understanding, about $750,000,000 is in East Africa, about $2.40 odd million dollar in Franco Africa.

Nigeria is very small. It’s just $4,000,000. Just as you know that we just started the PSP business, but that’s the breakup of of the full year revenue of about 900 and almost a billion dollar revenue. That K. That’s a that’s a it is largely East Africa and some part of Algo Africa.

That’s really what we’re Yeah.

John Caritas, Analyst, Deutsche Bank: Thank you, Bhat. Within each region, there are a bunch of countries. So maybe we could do it on a by country, please, because I think two or three countries are much, much bigger than others. So if you can help us with that, that would be great, please.

Sunil Tadar, CEO/Managing Director, Airtel Africa: I mean, sorry. We we we don’t give even in GSM side also, we don’t give country wise country wise data specifically. But we but I’m sure Sunil will be giving give you Sunil will give you some some color to the to the East Africa, you know, portfolio. Yeah. Thanks, Adi.

You know, as Javeep said, we do not provide country level, you know, numbers. The numbers that we provide is at a market segment level. I will refer to the comment that you made that early money remains a black box. We’ve given the, you know, the market segment numbers to you, but I will, you know, very quickly highlight the opportunity that we have in in early money. If you look at 27% of our customers, roughly, I’m just running it up 26.8, 20 seven percent of our customers are AtriumMoney customers, which basically means more than 70% of our customers, there is a there is a headroom for growth.

So that’s the one penetration opportunity that we have. The other thing that we spoke about, you know, which is the the there are two things that is happening in the early money business, which which gives us confidence that this revenue momentum that we have, you know, should remain sustained. The first is there is this, you know, the increasing transaction value at an overall level, which is a function of both when the new customers come in and the and the existing customers, they increase their overall transaction level, which is driven predominantly by increase in the use cases, which is, you know, from deposits or peer to peer transfer to, you know, to, as I said, withdrawals to merchant payments, enterprise, and other financial solutions. So from an opportunity point of view, it is there is still a very large opportunity. There is a very large penetration opportunity.

There is a very large, you know, depth opportunity as customers continue to to expand their use cases. And at an overall Africa level, financial inclusion remains a very, very large opportunity, which is what we’re focused on. Market segment wide numbers is what we shared with you, which is what Jadip alluded. I’m afraid this is you know, we don’t share numbers at a country level, but I I guess you have a fair idea looking at the market segments plus the the the the penetration that we spoke about.

John Caritas, Analyst, Deutsche Bank: Thank you, gentlemen.

Conference Moderator: The next question we have is from Simran Khanna of Ashmore. Please go ahead.

Simran Khanna, Analyst, Ashmore: Thanks for speaking with us today. I just had a few questions on we’ve seen in April, some of your competitors have cut down their tariff, maintain competitiveness. Do you see this impacting your customer base? Maybe a bit of insight in Nigeria as to like if you’ve seen any churn in the lower income segments based on the hikes? And maybe your expected ARPU trajectory in Nigeria over the next few months due to the tariffs?

Thanks.

Sunil Tadar, CEO/Managing Director, Airtel Africa: Sure. See, as I you know, there was this earlier question that we were responding to. I will try and add a little more color to the you know, our texture to what what what we just said. The the tariffs were you know, the price adjustment was introduced in in the later part of last quarter. So about four to five weeks of impact is what we’ve seen.

And, therefore, it is too early to conclude on the overall elasticity impact for this tariff this this tariff adjustment. Normally, when we when we roll out tariffs but, see, these are unprecedented circumstances. There is lots happening in the macro environment. There is also this price adjustment that has gone in. So what we normally see is there is a little bit of a reaction that that happens from the customers.

At the top end of the market, which is largely about 70% of bulk of the market, those are are inelastic customers. They are price resistant, and therefore, normally, you don’t see that impact. There is a there is some amount of tight trading of consumption that happens at the lower end of the market, but normally in our experience, this is temporary in nature. Now most of the, you know, of the price adjustments that that have gone in, this is what we have seen, and the consumption normally comes back, which is the reason I’m saying that on this one, we will be actually in a better position. So there is one set of customers where we’ve seen they are they remain price inelastic.

They remain price resistant. There is you know, which is roughly about 70 odd percent of our our total revenue, you know, contributing customers. At the lower end, which is where there is some impact, normally, this this adjustment of, you know, the recite rating happens, they come back, and we will be in a better position to to answer the the real impact of price adjustment at the end of this quarter. Now with respect to the with respect to the ARPU on, you know, on Nigeria, I just we’ve seen Nigeria ARPU, you know, improve from $1.8 in quarter three to $1.9 in in quarter four. So we’ve we’ve seen an on a y o y basis, it’s about a 34% growth.

Even on voice, if you look at, we’ve seen point nine to to, you know, to $1. Now if this voice ARPU was a was a little bit of a, you know, kind of a a signal to to what’s happening at the lower end of the market. It is it’s a it’s a relatively a better you know, or or heavy sign, but we’ll have to wait and watch to be a little more conclusive as to, you know, of what a 50% price it has been done does to the to the consumption as far as the customers are concerned.

Conference Moderator: Thank you. We have no further questions on the conference call, and I would like to hand over to Alastair for any webcast questions.

Alastair, Head of Investor Relations, Airtel Africa: Yeah. Just a few that we haven’t addressed to to highlight. The first one is just on Nigeria, in particular, network capacity utilization. Any comments on how how our network is performing there? Any concerns around capacity on the network given a slight reduction in CapEx in Nigeria?

And related to that, any details or information you provide on infrastructure sharing arrangement that we announced with MTN and how that potentially could impact CapEx or OpEx? That’s the one thing. And then the second one is just on talking about partnerships as well with SpaceX. We announced something recently if you give any sort of clarity around the logic behind that. All agreed.

Sean?

Sunil Tadar, CEO/Managing Director, Airtel Africa: So the the first question, which is on on Nigeria. Nigeria is a very important market for us, and we we remain very excited about the growth opportunity or the potential that this market has to offer for both voice, data, enterprise, and home broadband categories. So and money, of course. So all these categories, you know, it’s a very, very large opportunity for us, and we would and we continue to make our our investments to ensure that we are making in the right investments to support our growth ambitions in Nigeria. Our our capacity we have enough capacity in Nigeria to to support our our growth ambitions.

And so far, in terms of our customer experience, we can we’ve made massive investments. You know, one is one is in in network, be in our technology and and network and digital tools to be able to understand if there was any area or any any part of the market where there is any stress on customer customer experience, we are able to proactively, and I wanna underscore this point, proactively and, you know, address that that that customer experience issue because, you know, as far as we are concerned, customer experience or delivery customer experience is is is at the front and center of everything that we do. So as far as Nigeria is concerned, the recent cap you know, the the the the capital investment that we are seeing is by by no stretch an indication of us pulling down investments in Nigeria, and you will see that, yeah, as we continue to support data or voice voice consumption in in in that market. So this is from, you know, the question on Nigeria. With respect to to Indian and Airtel, we we went into a partnership agreement with Indian for network sharing in two markets, which is Nigeria and Uganda, driven to extend digital and financial inclusion across Africa and, you know, we’re exploring similar partnerships with with other operators as well.

These sharing agreements target improved network cost efficiency. So that is that is definitely one objective. Expanded coverage and provision of enhanced mobile services to millions of customers, particularly in those remote areas where we we, you know, we do not yet fully enjoy the benefits of modern connected life. Now this is a move towards building common infrastructure within the permissible regulatory framework to provide a more robust and extensive, you know, digital highway or drive digital financial, you know, inclusion at the same time. What we are trying to achieve here is, one, is to avoid duplication of investments, you know, of expensive infrastructure.

And most importantly, is the other objective is to is to build resilience in our in our network, and this is important for both us and NTA. Right? So so that our operational efficiencies improve. So there is a there is this attempt to avoid duplication of investments. There is this attempt to so that we we we get better efficiencies out of our investments, provide better experience by building resiliency in in our in our in our network, and to be able to expand network in areas which probably otherwise would have taken a little longer for all of us to go there faster and make sure that we’re serving the underserved.

So that really is the objective for, you know, for for this for this agreement that we signed with with Indian in in Nigeria and in Uganda. This is Starlink. Oh, now with respect to Starlink, you know, the so but the agreement that that we’ve signed with with with with Starlink is the agreement will will help us to serve the underserved in in remote locations where there is no network or the cost of building network is very, high across our job across all geographies. Currently, you know, Starlink has a license to operate in nine out of our fourteen fourteen outposts. Further, this will also improve the transmission to the site and thereby our ability to serve our b to b customers as well because, you know, they it is both for for backhauling as well as for for wholesale or selling to our reselling to our our b to b customers.

So that really is the objective of of this agreement with with Starlink.

Alastair, Head of Investor Relations, Airtel Africa: Great. And then one more question. Just I think you’ve already addressed it. Mobile Money is are we expecting any acceleration in growth and improvement in margins in Mobile Money performance? It’s been very strong.

Is there any scope for further acceleration in that business?

Sunil Tadar, CEO/Managing Director, Airtel Africa: See, if if you look at mobile money, as I said, there is a there is a huge opportunity. We currently have, you know, more than 70% of our customers who are not in mobile on mobile money. So that is one opportunity. Africa remains a very, very large market from an opportunity point of view on mobile money penetration. That is the other large opportunity that we have.

And from a growth acceleration point of view, which is where our focus is, as we continue to drive, you know, four g penetration in our markets, we will also drive, you know, the the the multiplicity of use cases, you know, with our customers. And as our customers use use mobile money for more than one or two use cases, their ARPU grows. So from an opportunity point of view, there is a massive opportunity, and we have really clear plans to accelerate growth on mobile money. And the good thing about this business is, you know, the growth, the translation from from top line to bottom line is very strong, which is something that we see in in in the EBITDA and the cash generation on the mobile money side. So it’s a very, very strong opportunity and a business that we have, which is also reflected in our consistent performance of close to 25 to 30% growth in the last five years CAGR of 30% in the last five years.

Alastair, Head of Investor Relations, Airtel Africa: Great. I think that’s, that’s all in closing remarks. Sunil?

Sunil Tadar, CEO/Managing Director, Airtel Africa: Yeah. If there are, no further questions, I would like to thank, each one of you for joining us today. Thank you very much. Thank you. Thank you.

Conference Moderator: Ladies and gentlemen, that concludes today’s conference. Thank you for joining us. You may now disconnect your lines.

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