Airtel Africa PLC
LSE:AAF
Earnings Call Analysis
Q1-2024 Analysis
Airtel Africa PLC
In the face of a tumultuous economic climate, the company has managed to deliver robust operating results. Revenues soared to nearly $4.4 billion, marking a 20.4% increase in constant currency growth—an upswing from the preceding quarter's 18.6% growth. This hike can be attributed to strategic success across regions. There was also an EBITDA margin enhancement by roughly 70 basis points, reaching 49.5%. This represents an 11.4% advancement in EBITDA in reported currency and an even more impressive 22.5% in constant currency, reflecting strong operational performance.
Recent governmental policies in Nigeria, including the introduction of the William Buyer naira, have led to significant currency devaluation—yet the company faced only a marginal revenue and EBITDA impact due to the timing of these events. Notably, there was a non-operating exceptional item of $471 million in finance costs, reflecting adjustments of U.S. dollar liabilities, after-tax amounting to $317 million. With all liabilities now adjusted for the devaluation, the company does not foresee further foreign exchange losses barring additional devaluation, maintaining an optimistic outlook regarding Nigerian market stability and growth prospects.
The company has observed strong growth trends in regions like Nigeria at over 13%, East Africa with almost 23% revenue growth in constant currency, and the Francophone region at 2.5%. Specific to the mobile services segment, customer base expansion by almost 9% and a 9.8% ARPU growth have spurred constant currency revenue growth of over 19%. Voice revenues buck the global trend by growing 12% in constant currency, suggesting continued demand in less penetrated markets, while data revenues surge by nearly 30% amid increasing network coverage and capacity—setting the stage for sustained growth from the current low usage levels compared to global standards.
The mobile money sector continues its remarkable trajectory with a 31% constant currency revenue growth, outpacing previous periods and reinforcing its status as Africa's fastest growing mobile money operation. This vitality is driven by a 34% surge in customer growth and expansion of the mobile money ecosystem. Transaction values have burgeoned by 47.2%, with an annualized value nearing $107 billion, underlining the strength and potential of this segment.
Despite inflationary pressures in various markets, the organization has managed to bolster its group EBITDA margins to 49.5%, thanks to a steadfast commitment to operational efficiencies underpinned by a 'win with cost' strategy. This discipline allows the company to absorb the effects of the Naira devaluation without significant deterioration in margins, epitomizing resilience and sound fiscal management.
The end of June saw a leverage ratio of 1.3x EBITDA, with a net debt of $3.3 billion. Adjustments for the full-year impact of the Nigerian currency devaluation point toward a leverage ratio between 1.4x to 1.5x. The company's approach to debt involves matching currency revenues with debt obligations, thereby reducing vulnerability to currency fluctuations. Policy regarding capital allocation remains steady, emphasizing continued investment in the business and an operating leverage expects to remain stable.
The encouraging operational performance this quarter casts a spotlight on the opportunities and well-defined strategies across its markets. Even with the drag from Naira devaluation on reported results, strong customer base growth, especially in data services and mobile money, sets a foundation for continuing double-digit growth. Progress in controlling energy costs and investment in eco-friendly and cost-effective energy solutions like lithium batteries, solar panels, and grid connections are also pivotal. Looking ahead, the company aims to continue leveraging customer growth, especially through mobile money and enhanced IT platforms, to bolster transaction values and overall business health.
Adherence to a strategic philosophy of incremental EBITDA ensures that for every dollar added to the top line, between 50 to 55 cents contributes to the bottom line. By driving usage and maintaining a lean cost structure focused on capacity expansion, distribution cost reductions, and transmission optimizations, the company projects to retain this strong EBITDA growth moving forward.
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Good day, ladies and gentlemen, and welcome to the Airtel Africa First Quarter 2024 Results Conference. [Operator Instructions].
I will now hand the conference over to Mr. Olusegun Ogunsanya. Please go ahead, sir.
Thank you for joining us on today's call. And I'm joined on the line by our CFO, Jaideep and our Deputy CFO and Head of Investor Relations, Mr. Pier. We shortly be answering your questions. But first, I would like to provide you with a brief overview of performance in the first quarter.
We have reported a strong set of operating results despite the macroeconomic backdrop, which remains very volatile. Revenues in the quarter reached almost $4.4 billion with constant currency growth of 20.4%, an improvement from the 18.6% growth reported in the final quarter of last year. This improvement reflects the success of our strategy across all of our regions. The strong performance revenues, combined with the continued focus on efficiencies enabled us to report an improvement in EBITDA margins across the group by almost 70 basis points to 49.5%. This is an increase of 11.4% in our EBITDA and reported currency represents 22.5% in constant currency, pretty strong operating performance.
Before I go to the detailed regional performance of the group, I wanted to comment on the recent events in Nigeria following the devaluation of naira towards the end of the last quarter. We welcomed initiatives introduced by the new Nigerian President which has resulted in the introduction of the William Bayer [indiscernible] Nigerian naira. We believe this will lead to a more stable Nigerian foreign exchange market in the long run. As a result of these initiatives, the naira, Nigerian currency devalued significantly in June. This has impacted our results for this quarter. Reported revenue and EBITDA were only marginally impacted because of the devaluation occurring towards the end of the quarter. However, we reported $471 million nonoperating exceptional item in finance costs, reflecting the restatement of U.S. dollar liabilities in our balance sheet.
The after-tax impact of this amounts to USD 317 million. This adjustment has materially impacted our revenues for the quarter. But with all of our liabilities now restated to reflect the devaluation, there should be no further foreign exchange losses assuming no further devaluation. There is an event with [indiscernible] spread improved liquidity over time and we have facilitated our ability to sustain good momentum we've seen in our market. Nigeria is a very significant market for us. It offers on time growth potential and we will continue to actively invest in the market to capture this opportunity. Our strategy remains unchanged, and we look forward to reporting on our successes in the coming quarters.
Before I discuss our performance across our 2 operating segments, I'd like to highlight our performance on the regional business, our [indiscernible] regions, including both mobile services and mobile money. In Nigeria, we continue to see very strong trends in constant currency over [13%] in the period. This has rebounded very strongly from the demonetization impact in Q4 of last year. In East Africa, we reported almost 23% revenue growth in constant currency as well with our Francophone region coming at 2.5%, all different regions seen an acceleration in growth from the previous period.
Let me now talk about our mobile services segments. The strong demand for services across our footprint, combined with our very attractive customer for cost propositions, resulted in an almost 9% growth in the customer base, which combined with ARPU growth of 9.8%, almost 10%, resulted in constant currency revenue growth of over 19% and it 8% in reported currency. In Nigeria, constant currency mobile services revenue grew by 23% over the period, with East Africa region almost 20% and Francophone about 13%.
Unlike many other regions in the world, our voice revenues grew almost 12% in constant currency. Given the low levels of SIM penetration and continued pent-up demand for voice services [indiscernible] markets, we expect this to continue. The growth in voice revenue is further supported by almost 30% growth in data revenues reflected an increasing and improving network coverage and capacity to position for significant demand we see for data services. This improved coverage has contributed to 22% growth in data customer base over the year, almost 50% of which are currently using 4G services. Given the user level remains very low compared to global levels, we expect this growth to continue.
Now mobile money business. Our mobile money business continued to see very strong performance with about 31% constant currency remaining growth in the period, an acceleration from the previous period, and it remains the fastest growing mobile money business in Africa. This is very encouraging growth, was driven by continued customer growth of about 34%, and further enhancements of the mobile money ecosystem. This led to 47.2% growth in transaction value over the year to almost $107 billion annualized transaction value.
In Nigeria, we continue to build the PSB business, and we have added over 90,000 active customers over the last quarter. reaching 1.5 million customers. The strong top line performance across all regions continue to support our group EBITDA with EBITDA margins rising to 49.5% despite inflationary pressures in the market, as I mentioned in my opening paragraphs. We continue to focus on efficiencies in our business with a win with cost strategy. And we remain accorded by the progress we've made. We do not expect a material impact on our EBITDA, as a result of Nigerian naira devaluation, our margin remains very resilient.
Over the year, foreign exchange had an adverse impact on our reported financials. When the naira devaluation in Nigeria was very exceptional in nature, what are markets of [indiscernible]? In particular, the Malawi and Zambia Kwacha as well as the Kenyan Shilling. After adjusting for different sources across our markets, EPS was up 16.2%. Although this is a benefit from a one-off gain in deferred tax as an indirect consequence of the naira devaluation. Briefly in terms of the balance sheet and cash flow. By the end of June, our leverage ratio was 1.3x EBITDA with net debt of $3.3 billion. The leverage ratio has improved slightly from Q4 levels. But adjusting this ratio for a full year impact of naira devaluation, we expect the ratio to be between 1.4x and 1.5x.
Our capital allocation policy remains unchanged. Our priority is to continue to invest in the business to ensure with future growth of our operations for sustained growth. We therefore returned our previous quarter's guidance of between $800 million and [$828] million for this financial year. Furthermore, we continue to actually reduce our balance sheet exposure for sure and continue to uptick cash from our various [indiscernible].
Before I go to Q&A., I thought I will summarize the key conclusion from this quarter's results. Operationally, I am very busy with the performance achieved by the last few months. The accelerating growth reflects the opportunity available across our markets and our clear and consistent strategic approach to capture this opportunity. With the backlog of continued economic uncertainty across the markets, the performance is very encouraging. Although the naira devaluation had a material impact on our reported results, we believe the initiatives adopted are for the best of the country, on our opportunity market, the scale of the opportunity and the willingness to invest significant capital into the market does not change.
Finally, I am encouraged by the work undertaken over the last few years, to minimize the impact the devaluation has had on our business. Our capital allocation framework remains very robust, and we look forward to continue executing on this and of our priorities. And with that, I would now like to open the line for questions for which I'm going to be joined by Jaideep and Pier. Operator, I hand over to you.
[Operator Instructions]. Our first question is from Rohit Modi of Citi.
Congratulations on great set of results. Just 3 questions from my side. Firstly, on PSB. Do you have any internal timeline or target in terms of number of customers when you start charging having revenue on PSB in Nigeria? And secondly, again, on PSB, do you -- what do you see in terms of transaction yields or fees that you can charge in Nigeria? I see generally, it's 0.8% to 1% in other markets. Do you think that will be lower in Nigeria or you think that should be in par with other markets as well? Thirdly, on DRC, one of your peers reported a substantial decline in ARPU in DRC. I just wanted to confirm, do you see any kind of deterioration in DRC market or any changes in the market structure in DRC?
Thank you, Rohit. Let me take the customer number question first. In Nigeria, we continue to prioritize addition of customer either of revenue [indiscernible]. I said this in the last review, that remains a priority. We want a very critical base of customers. We probably start monetizing them. I expect we're going to continue to add more customers over the next quarters. And at the appropriate time, we would begin to talk about revenues. Nigeria is a very large country. Many [indiscernible] rates are very regulated by the CBN. The key to success is very, very critical mass, and that is what we continue to focus upon. On your question on DRC, there has been some pricing aggressiveness by a few of the operators, but we continue to leverage usage to drive ARPU enhancement. And our strategy is working for us in DRC.
And in terms of yields or fees that you can charge in Nigeria or the kind of market do you see compared to other markets?
Like I have read about it, pretty clear use cases for mobile money. The first one is [indiscernible] second one is big business R&D charges. In Nigeria, the charges are highly regulated by the Central Bank does it limit to what you can charge. Therefore, now the focus is really not on data revenue, and of course on getting as many customers as possible. And that’s what we’re going to continue to do about the next couple of quarters as we engage regulators for appropriate pricing of our services but that is basically within control of the regulator.
The next question is from Cesar Tiron of Bank of America.
I have three, if that's okay. The first one relates to your CapEx, which is in U.S. dollars with the guidance being unchanged, given the significant depreciation of currencies that you're seeing, why not reduce this CapEx? That's the first one. The second one is on the Nigerian pricing. So obviously, inflation is going to most likely accelerate quite significantly in the next couple of months in Nigeria and the industry has tried to put through price increases in September 2022, but the regulator, I believe, changed its mind at the latest. And those price increases were not able to be implemented.
Do you think you are now going to be able to implement price increases in Nigeria in the next couple of months or to the opposite, are the authorities going to put pressure on the industry to lower prices given the significant amount of inflation. And the third question also relates to Nigeria. Just wanted to check what you're seeing on the FX market. So obviously, we're seeing the FX rate, but is there any liquidity at the $750 million, $800 million mark? Are you able to take money out of Nigeria right now.
Let me take the last question first on the FX liquidity. The new FX regime is about 3, 4 weeks old, I think we're in the very early days of these new prices covering the currency. And I believe confidence we would get to this market pretty soon. It's too early to make a judgment but as I speak now, liquidity is still very thin at $750 million. We're very optimistic that we are confident in terms of the market. We're going to see more liquidity in the market. Therefore now at &750 million, [indiscernible], like to see. But once again, very early days there, we remain confident that liquidity would be improving market.
Now around the pricing, in most countries in Africa, prices are regulated by the government. But like I said on different locations, about growth alterative does depend on pricing. Our [indiscernible]. If we do the pricing, we check it. Unlike Nigeria, we've not taken a price increase. We grew 23%. Voice revenues have grown, data revenues have grown, and we continue to deliver growth on the back of usage of customer addition is a true clear, very sustainable, and more customers, medium consumer minutes, medium data, that we saw growing. Given inflation in Nigeria, If you look at your price it's going to be good for the business. But without this price increase, we continue to develop very, very strong double digit growth on the back of customer addition and increasing usage.
While I was talking about voice, talking about data, we're now talking about getting more customers to use our mobile money business. And for CapEx, I will let Jaideep add more color to this. What I mean the competence we have in the market, we put in our money where mouth is. We believe in the growth potential in all of our countries given the very, very still low unique SIM card penetration, the very low usage levels. When I'm talking about data or minutes and also the very small penetration of banking services. We're very bullish about Africa. We don't have any plan to reduce our CapEx commitment. This is a long-term play for us, and we're going to continue to invest in each of our markets to a strong value and deliver value to our customers. Jaideep, do you want to add some?
Yes, sure, thanks. I just want to add 1 more flavor to this question about the CapEx. So we have to keep in mind that we have 14 countries operation. Nigeria is about 1/3 and let’s say, ballpark, 1/3 of the CapEx goes to Nigeria. So out of 1/3, we have also about 70%, 75% is in dollar currency. So the point is that to the extent of that 75% of, let’s say, $250 million-odd dollar, is not something which will draw immediate alarm or any major concern. So our view is that since Nigeria is growing at 20% plus consistently. And it's not only this quarter, even if you go in the past quarters, except Q4 where we were hurt by the demonetization impact for a short period of time.
But other than that, Nigeria has been consistently growing at 20% plus in local currency or constant currency. So we need to maintain that momentum, keep investing in Nigeria because the growth opportunity is immense. So from a overall perspective, we are not changing our CapEx guidance at this moment, and we continue to invest with the – of all the operating ability, including Nigeria, the way it was planned earlier.
The next question is from Madhvendra Singh of HSBC.
Yes. Can you hear me?
Yes, we can.
So continuing on Nigeria, if you could talk about your post-quarter end performance in July, that would be quite helpful. given the high inflation and we have seen the currency depreciation as well, have you seen any change in the consumer behavior in any sorts? Are they starting to find money to spend on telcos for any reason and so on. So if you could talk about the current operating dynamics in the country post the devaluation that will be very helpful.
Then the second question is on your leverage, given the currency devaluation, I think there might be some short-term impact on your net leverage ratios. Is there any concern on your side whether that puts you in a difficult situation at all even for a brief period in the ratio terms? And does it accelerate your moving away from dollar debt in any way. So what are you doing on that front that, that will also be helpful. And finally, just trying to understand the derivative in Nigeria. Is it something which relates to -- what part of business this derivative relates to? Is it about the payables? Is it about the CapEx, which you have to do?
Why does this derivative exist? And typically, derivatives offer hedge. So in case of FX move, it would actually give you hedge. But here, it is actually causing you a big hit on the earnings. So if you could give some color around this derivative, which exists and why is it this, that would be helpful as well.
I would take some of the questions and Jaideep would respond to the question on derivatives. Let's start with Nigeria and your concern and part of inflation as [indiscernible] you are asking. Yes, there is massive inflation in the country. It's about 20% the last time when I saw. There has been price increase in the world and you have a price increase in the economy. What I believe that the market is actually adjusted to 750 price point for dollar a few months ago. So I won't take the sudden shock. Most price levels are [indiscernible] reflect the value few months ago. What I mean the wallet is a wallet. The size of the wallet is diminished. But I believe we are very essential part of everybody's wallet in the country. We are a replacement product. We replace many things, we replace transportation, we replace education, we replace entertainment and we are also very affordable.
Given the fact that we have an essential item, we replaced some of the essential items and also very affordable. I don't see a significant impact or how much of the wallet that has been dedicated to telco services. We didn't see in the last quarter, we've not any this quarter. And we just continue to provide these services very affordable price points. Once we've been driving a lot more customers to the franchise and making sure they consume more data, more voice at better, affordable prices. That is what we offer. And that is why I believe the medium part of that is very muted as opposed to the impact on sectors of the economy.
In terms of the leverage, I was going to give you a strong flavor. But our philosophy remains unchanged. We continue to strengthen our balance sheet. That's a declared objective by pushing debt down to your course by localizing debt. And by having us as more debt as possible in local currency [indiscernible] much between our revenues and our debt. But I'm going ask Jaideep to give more flavor to the derivatives.
Yes. So before derivative, let me also talk about the leverage. Your second question was on leverage. Obviously, this impact on leverage hasn't come through in Q1 as we have announced that the full year impact will be a little bit different. So if we take it at 752 as an exchange rate for Nigeria, then our leverage at the end of the year will be in the range of 1.4% to 1.5%. That's number one. It will not be 1.3%, probably it will go up a bit to 1.4, 1.5 right.
With reference to derivative, let me tell you that for the last couple of years, as you know, that we have gone through this difficulty in sourcing dollar from the market. So we have to use various instrument -- structured instrument through the bank to source dollar for paying vendor to upstream money and so on and so forth. So those instruments, the derivative instruments were used to source dollar and mainly used for upstreaming and also to some extent for making payment for the CapEx vendors, dollar-denominated CapEx vendors,.
Understood. And just to clarify, the leverage ratio you talked about 1.4x, 1.5x. That includes the leases or this is on excluding leases, basis?
Yes, yes. It includes lease, liabilities and everything put together. I mean, the way we calculate normally the leverage. So the definition remains same.
Right. And just to -- sorry for following through on the derivative side. what is the duration of these derivative contracts? By when the derivative contracts would stop being an issue for you in terms of further currency depreciation if it happens?
See, the point is that it all depends on the liquidity. If liquidity improves in next few quarters or, let's say, from this quarter onwards, if we start seeing that liquidity, we can dilute many of our ForEx liabilities in Nigeria by sourcing dollar and keep liquidating those liabilities, including derivative. So it all depends on how the liquidity situation will move as we progress through the subsequent next couple of quarters.
Got it.
Our endeavor will be always to source dollar and keep reducing this ForEx denominated liabilities in Nigeria because that is not only – it will actually future-proof us from further devaluation impact if any further devaluation happens. So our endeavor is to continue to source dollar and keep reducing these exposures, the foreign currency exposures in Nigeria.
[Operator Instructions]. The next question is from Tajudeen Ibrahim of Chapel Hill Denham.
Congratulations on your numbers. I just would like if you can give clarity around what you expect to be the catalyst for your business in Nigeria in terms of recovery for the remaining part of the financial year. We are seeing the numbers been dampened by foreign currency losses. So what do you expect to be the catalyst for recovery for the business going forward? The second thing is I would like if you can please speak around your energy costs in Nigeria, particularly around what you have said you would do previously to bring down the energy cost around the towers. If you can speak to that, I think it will help. Thanks a lot.
Thank you, Tajudeen. On the catalyst for our business, I mean, we don't require any catalyst. The fundamentals are very strong. We just delivered a 23% growth in constant currency. Data revenues are climbing, voice revenues are climbing. On mobile money business, we acquired more by 5 million customers. We've increased the Asian base. We started a very strong footing. I mean, this one-off devaluation [indiscernible] was. My only response is to continue to grow a very strong double digit. If we continue to grow at 20%, 23%, 24%, 25% growth, then we would improve our business as the only response we can give, so we're not expecting any major CapEx from anywhere? I just focus on our strategy of [indiscernible] network footprint, content cost, deliver nice profitability that is catalyst that is required for us to continue to remain relevant in our largest market.
On the energy cost, there are a number of things that we're looking at. Of course, the price of business has come down significantly from what it was in the last couple of quarters and it has very good street natural [indiscernible]. But we've seen a move from our design to use more environmentally. This is good for 2 things, good for the environment and good for [indiscernible] cheaper. So they are builds of 3 legs. The first leg is to use more of lithium battery. We can return much more energy and conserve us for longer hours.
The second one is use of solar panels. And in, total, it is increasing the number of towers, which are [indiscernible]. We're making progress on each of these delays. Conversion to lithium battery, use more solar panels and connecting more size to the grid. Grid availability is increasing in Nigeria, and that is why we're able to go on slightly more sites to the grid. Those are the 3 clear pillars upon which I mean we build our energy conservation on. And of course, continue to work with the partners. They are aligned with that is right thing to do good for the environment and good for cost control as well.
Okay. So thank you. Do you want to speak to mobile money? I know that the numbers are still way too small to be reported. But are you open to speaking to what you are doing to support the overall ecosystem, particularly in Nigeria.
In terms of mobile money, we remain focused on our twin Win strategy. One, make sure the IT platforms are very strong, very robust, customer-friendly. And secondly, use this to attract a lot more customers. You’ve seen from the last quarter, we had about 600,000 customers, we added 90,000 more to the customers, reaching almost 1.5 million customers. That’s some good progress for us. In terms of the agent base, we’ve gone up to almost 134,000 agents. These are points where you can win, do cash and cash out an increase of almost 7,000. That’s also some good progress for us.
And in terms of transaction value, we’ve attracted over $100 million in terms of transaction value. That is clear progress that we reported upon. But the key focus is customer addition, customer addition, customer addition, give it a very low [indiscernible]. We did a very large customer base before we start to be monetizing the base and that’s on thing mean we keep working upon.
The next question is from Aditya Suresh of Macquarie.
Two forward-looking questions, if I may. Firstly, as you say, your subscriber base has been expanding within that data consumer portion mix also expanding, seen as mobile money as well. Do you have any perspective on kind of how this could look like in maybe 12 months' time, 18 months' time? And if you maybe like some of the more recent dynamics around demonetization, et cetera, helps accelerate some of these trends. Are you witnessing any of that in your customer base? And is the network in a position adequately for the team?
The question is not very clear. Are you talking about customer base for our business or customer base for mobile money?
For both. What is I am talking about is a actual example, data users as a proportion of your overall customer base that's now at about 40% right? And that ratio has been expanding for the past couple of years. Give any perspective on how this could evolve it, say, 12, 24 months? Are you seeing any acceleration in some of these trends in different markets? And I guess the question on mobile money was more about with demonetization? Is it your view that maybe we see a further bump up here or the inflection in kind of your mobile money users?
In terms of overall customer, we continue to expand our customer base about 5% growth in this quarter of our previous year. We had highest growth in this quarter because of a new regulation that increases the age that you can now pass to consumers from 16 to 18 that took out a large number of potential customers. But of course, we are always very compliant with any regulation. So that regulation came out a couple of months ago. And the we comply with that regulation that sort of slow down the customer numbers in the last quarter. Talking about, I mean data customer. Data customer continue to increase.
As I said in my opening statement, close to 50% of our data customers, largely 4G customer and getting a lot more usage out of 4G customers. That is 1 clear duty for us, not just increasing the absolute number. Of course we're increasing those with smartphones because a lot more of 4G and that we will continue to do.
And lastly, on mobile money again. There are 2 sources of customer addition to our mobile money business. One is from a new customer. A second is from my peers and Nigeria got about 40 million customers already. So the challenge is to combat as many of these business as possible by showing them the advantages of using a mobile wallet, that is one base for us to start from. And the second opportunity is new customers that we're acquiring with 2 resources, we used to in place the customers that are using the mobile money business. But our very unique distribution infrastructure is certainly conditioned to develop very, very strong numbers of customer growth, but we had a slowdown last quarter from regulatory requirement for minimum age from 16 to 18 years.
And in terms of the incremental EBITDA margins that you're seeing as you're adding on these customers, are you able to comment on that in terms of your expectations and what you -- what we should look at over the next, say, couple of years? It seems that a lot of your cost item if any are stable. And as you grow the business, you should see a fairly meaningful further bump-up in operating margins. And I just wanted to hear your perspective on that.
We check our performance over the last quarters. We got a very simple strategy. First is the growth of plan and second is to expand EBITDA. We expand EBITDA. We’ve got this philosophy around the incremental EBITDA. For every one dollar, we added the top line. We make sure between $0.50 and $0.55 go towards supporting the bottom line. That has worked for us very well in the last set of quarters. You can see from our results, we’re not departing from that philosophy. We continue to grow top line by driving usage, and we continue to grow the EBITDA line by $0.02. The incremental revenue coming from top and a very efficient cost structure.
How do we contain cost structure? We focus on increasing capacity, network capacity, at minimal incremental cost. I mean, we’ve spoken about [indiscernible] technology for a number of quarters that is still [indiscernible] of leveraging on capacity expansion at minimal cost. We continue to look at distribution cost as well. We’re converting some customers to digital channels, chip for us. We’re moving some to mobile money chip for us. We look at our transmission, regarding our transmission but to optimize capacity. And I believe that this lesser focus on cost control, lesser focus on expanding the top line. We continue to deliver between 50% and 55% incremental EBITDA for us.
Ladies and gentlemen, we have no further questions in the queue. And I'd like to hand back to Mr. Ogunsanya for some closing remarks.
Thank you very much. Look forward to seeing all of you over the next 3, 4 months. Thank you.
Thank you very much, sir. Ladies and gentlemen, that then concludes today's event, and you may now disconnect.