CLSA says that In 4QFY21, Bharti Airtel’s Africa revenue increased 15% YoY to US $1038 mn and Ebitda was up 25% YoY. Data and mobile money account for 44% of its Africa revenue. Revenue growth was across regions, with East Africa up 24% YoY and Nigeria up 23% YoY. Airtel Africa’s FY21 cash flow after Capex and interest costs was US $647 mn, up 43% YoY, and the region’s gearing is comfortable at 2x EBITDA. In value unlocking, Airtel Africa is selling a 12% stake of mobile money for US$300m, implying a valuation of US $2.65 bn. Africa accounts for 30% of Airtel’s consolidated revenue and EBITDA and both its Africa operations and Airtel are undervalued, in CLSA’s view.
In 4QFY21, Airtel Africa’s revenue was up 15% YoY to US $1038 mn and Ebitda was up 25% YoY to US $495 mn, both ahead of estimates. Its margin expanded 353bps to 47.7%. The subscriber (net additions at 7.6m in FY21) loss of 0.7m loss in 4QFY21 to 118m was below our estimate but Arpu was up 11% YoY at US$3, ahead of CLSA’s estimate. Voice revenue rose 7% YoY, data revenue was up 24% YoY & mobile money was up 30% YoY. Data & mobile money accounted for 44% of revenue, and PAT at US$132m was up 103% YoY, highlights CLSA.
See Zee Business Live TV Streaming Below:
CLSA says that In 4QFY21, Africa reported revenue that was up 15% YoY, but constant currency growth was higher at 21.7% YoY, which was offset by currency devaluation, mainly in Nigeria, Zambia and Kenya. Revenue growth was across regions: Nigeria was up 23%, East Africa +24% and Francophone Africa +16%. Airtel’s 4QFY21 subscriber growth was disrupted due to Nigeria which faces the challenge where the regulator has mandated operators ensure subscribers provide valid national identification numbers and update sim card registration. To date, Airtel has collated data for 23m of its 42m (55%) subscribers in Nigeria and still has to complete this process.
CLSA highlights that Africa’s FY21 operating free cash flow (EBITDA less Capex, cash interest & tax), rose 43% YoY to US $647 mn. FY21 Capex of US $614 mn was down 4% YoY due to Covid-19 and interest payments totalled US $302 mn. Rising cash flow for its Africa operations was led by EBITDA growth and with debt, at US $3.5 bn, gearing’s comfortable at 2x.
Airtel Africa is selling a 12% stake (to TPG and Mastercard) of the mobile money subsidiary for US $300 mn, implying a valuation of US $2.65 bn. The company will look to increase minority investors in mobile money up to 25% and to IPO in few years. Mobile money is 10%-11% of its Africa revenue of US$3.9bn and Ebitda of US $1.8 bn. In turn Africa is 30% of Airtel’s consolidated operations and it has 56% ownership. Airtel Africa has a US $4 bn market cap and it and Airtel are undervalued, in CLSA’s view.
Credit: Source link