| Segment reporting | 5. Segment reporting The Group’s Executive Committee, identified as the chief operating decision maker (CODM), reviews and evaluates the Group’s performance from a business perspective according to how the geographical locations are managed. Regional and operating company management are responsible for managing performance, underlying risks, and effectiveness of operations. Regions are broadly based on a scale and geographic basis because the Group’s risks and rates of return are affected predominantly by the fact that the Group operates in different geographical areas, namely Nigeria as the current largest market, Cameroon, Côte d’Ivoire, Rwanda, South Africa and Zambia, as our Sub Saharan Africa business (“SSA”), Kuwait and Egypt as our Middle East and North Africa business (“MENA”) and Brazil, Colombia and Peru as our Latin America business (“Latam”). The Executive Committee reviews the Company’s internal reporting to assess performance and allocate resources. Management has determined the operating segments based on these reports. The CODM has identified four operating segments: ◾ Nigeria ◾ SSA, which comprises operations in Cameroon, C ô te d ’ Ivoire, Rwanda and Zambia, along with the newly acquired operations in South Africa (refer to note 27). ◾ Latam, which comprises operations in Brazil, Colombia and Peru ◾ MENA, which comprises operations in Kuwait and Egypt. Although full operations in Egypt have not commenced, the business has incurred some startup costs. All operating segments are engaged in the business of some of or all of the following: leasing tower space for communication equipment to Mobile Network Operators (MNOs) and other customers (internet service providers, security functions or private corporations), providing fiber connectivity, providing managed services in limited situations, such as maintenance, operations and leasing services, for certain towers owned by third parties within their respective geographic areas. However, they are managed and grouped within the four operating segments, which are primarily distinguished by reference to the scale of operations, to the similarity of their future prospects and long-term financial performance (i.e. margins and geographic basis). The CODM primarily uses a measure of Segment Adjusted EBITDA (defined as profit/(loss) for the period, before income tax expense/(benefit), finance costs and income, depreciation and amortization, impairment of withholding tax receivables, business combination transaction costs, impairment of property, plant and equipment and related prepaid land rent on the decommissioning of sites, net (profit)/loss on sale of assets, share based payment (credit)/expense, insurance claims, listing costs and certain other items that management believes are not indicative of the core performance of its business) to assess the performance of the business. The CODM also regularly receives information about the Group’s revenue, assets and liabilities. The Group has additional corporate costs which do not meet the quantitative thresholds to be separately reported and which are aggregated in ‘Other’ in the reconciliation of financial statements presented below. These include costs associated with centralized Group functions including Group executive, legal, finance, tax and treasury services. There are no revenue transactions which occur between operating segments. Intercompany finance income, finance costs and loans are not included in the amounts below. The segment’s assets and liabilities are comprised of all assets and liabilities attributable to the segment, based on the operations of the segment and the physical location of the assets or liabilities, including goodwill and other intangible assets and are measured in the same way as in the financial statements. Other assets and liabilities that are not attributable to Nigeria, SSA, Latam and MENA segments consist principally of amounts excluded from specific segments including costs incurred for and by Group functions not attributable directly to the operations of the reportable segments, share-based payment and any amounts due on debt held at Group level as the balances are not utilized in assessing each segment’s performance. Summarized financial statements for the nine months ended September 30, 2022 is as follows: 2022 Nigeria SSA Latam MENA Other Total $’000 $’000 $’000 $’000 $’000 $’000 Revenues from external customers 997,132 295,331 116,117 26,552 — 1,435,132 Segment Adjusted EBITDA 596,756 163,672 83,010 11,616 (96,416) 758,638 Depreciation and amortization (note 6 and 7) (342,821) Net loss on disposal of property, plant and equipment (note 7) (13,650) Insurance claims (note 9) 1,686 Impairment of withholding tax receivables (39,141) Business combination transaction costs (17,928) Other costs (a) (1,274) Net impairment of property, plant and equipment and prepaid land rent (1,768) Share‑based payment expense (note 7) (9,752) Finance income (note 10) 11,035 Finance costs (note 11) (570,150) Other income 2,521 Loss before income tax (222,604) Additions of property, plant and equipment, right of use assets and intangible assets: - through business combinations — 642,371 365,749 3,650 - in the normal course of business 226,858 83,876 93,822 18,569 Segment assets (at September 30, 2022) 2,374,490 1,531,136 1,868,288 177,746 Segment liabilities (at September 30, 2022) 968,530 830,044 498,806 108,558 (a) Other costs for the nine months ended September 30, 2022 included professional costs related to SOX implementation costs of $1.0 million along with professional fees and system implementation costs. Summarized financial statements for the nine months ended September 30, 2021 is as follows: 2021 Nigeria SSA Latam MENA Other Total $’000 $’000 $’000 $’000 $’000 $’000 Revenues from external customers 846,941 256,382 39,642 21,151 — 1,164,116 Segment Adjusted EBITDA 599,682 144,500 29,142 9,401 (72,978) 709,747 Depreciation and amortization (note 6 and 7) (283,180) Net gain on disposal of property, plant and equipment (note 7) 1,632 Insurance claims (note 9) 5,437 Impairment of withholding tax receivables (44,398) Business combination transaction costs (9,087) Other costs (a) (14,353) Reversal of provision for decommissioning costs 2,671 Impairment of property, plant and equipment and prepaid land rent (44,369) Listing costs (6,659) Share‑based payment expense (note 7) (8,968) Finance income (note 10) 22,030 Finance costs (note 11) (218,069) Other income 1,269 Profit before income tax 113,703 Additions of property, plant and equipment, right of use assets and intangible assets: - through business combinations — — 262,843 5,388 - in the normal course of business 207,080 36,469 66,246 10,350 Segment assets (at September 30, 2021) 2,119,202 1,042,109 964,958 168,119 Segment liabilities (at September 30, 2021) 735,623 502,944 401,975 113,659 (a) Other costs for the nine months ended September 30, 2021 related to non-recurring professional costs related to financing of $13.5 million and aborted transaction costs of $0.9 million. Summarized financial statements for the three months ended September 30, 2022 is as follows: 2022 Nigeria SSA Latam MENA Other Total $’000 $’000 $’000 $’000 $’000 $’000 Revenues from external customers 355,351 114,801 42,104 9,061 — 521,317 Segment Adjusted EBITDA 210,039 63,746 29,993 3,828 (32,953) 274,653 Depreciation and amortization (note 6 and 7) (120,141) Net gain on disposal of property, plant and equipment (note 7) 134 Insurance claims (note 9) 70 Impairment of withholding tax receivables (11,422) Business combination transaction costs (3,685) Other (costs)/income (a) (966) Net impairment of property, plant and equipment and prepaid land rent (3,099) Share‑based payment expense (note 7) (4,127) Finance income (note 10) 6,412 Finance costs (note 11) (231,280) Loss before income tax (93,451) Additions of property, plant and equipment, right of use assets and intangible assets: - through business combinations — — — 3,650 - in the normal course of business 98,669 31,705 42,696 6,223 Segment assets (at September 30, 2022) 2,374,490 1,531,136 1,868,288 177,746 Segment liabilities (at September 30, 2022) 968,530 830,044 498,806 108,558 (a) Other costs for the three Summarized financial statements for the three months ended September 30, 2021 is as follows: 2021 Nigeria SSA Latam MENA Other Total $’000 $’000 $’000 $’000 $’000 $’000 Revenues from external customers 289,078 89,272 14,912 7,285 — 400,547 Segment Adjusted EBITDA 179,489 49,833 11,267 3,249 (24,120) 219,718 Depreciation and amortization (note 6 and 7) (99,255) Net gain on disposal of property, plant and equipment (note 7) 94 Insurance claims (note 9) 35 Impairment of withholding tax receivables (11,714) Business combination transactions costs (3,139) Other costs (a) (4,160) Impairment of property, plant and equipment and prepaid land (41,556) Reversal of provision for decommissioning costs 2,671 Listing costs (2,624) Share‑based payment expense (note 7) (4,286) Finance income (note 10) 18,017 Finance costs (note 11) (76,717) Loss before income tax (2,916) Additions of property, plant and equipment, right of use assets and intangible assets: - through business combinations — — — — - in the normal course of business 94,205 13,832 17,976 2,880 Segment assets (at September 30, 2021) 2,119,202 1,042,109 964,958 168,119 Segment liabilities (at September 30, 2021) 735,623 502,944 401,975 113,659 (a) Other costs for the three months ended September 30, 2021, included non-recurring professional costs related to financing of $4.2 million and aborted transaction costs recoveries of $0.1 million. Revenue from two tier one customers represents approximately 10% or more of the Group’s total revenue as follows: Three months ended Nine months ended September 30, September 30, September 30, September 30, 2022 2021 2022 2021 $’000 $’000 Customer A 63 % 65 % 63 % 66 % Customer B 17 % 15 % 17 % 14 % |
