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Airtel Africa Loses $70m To Naira Devaluation


According to a regulatory statement on the Nigerian Exchange, Airtel Africa Plc’s pre-tax profit drops 7.3% in the first nine months of the fiscal year 2022, despite robust increase in its subscriber base and revenue.

The telecom company’s statement reveals a $70 million FX loss owing to the naira’s depreciation throughout the time; currency depreciation in other African markets contributed to the losses. In addition, a check of Airtel Africa’s unaudited financial statements for the first nine months of 2022 results reveals that topline growth has been outpaced by increased expenses and net finance costs.

Following minor changes, telecom operators’ profits per share fell 5.8% in 2022. Africa’s leading telecom provider reported a 7.3% drop in earnings before tax in the nine months to December 31 to USD801 million, down from USD864 million in the corresponding year in 2021.

Revenue climbed by 12% to USD3.91 billion in 2022 from USD3.49 billion the previous year, while profits before interest, tax, depreciation, and amortisation increased by 13% to USD1.92 billion from USD1.70 billion. Expenses, on the other hand, increased by 11.7% to USD2.00 billion from USD1.80 billion, while net financing costs increased by 78% to USD519 million from USD291 million.

“Net finance costs increased by $228 million largely due to higher foreign exchange and derivative losses of $184 million mainly comprised of a $40 million loss on derivatives and higher foreign exchange losses arose from the restatement of balance sheet liabilities (a loss of $70m on devaluation of the Nigerian Naira, and other devaluation losses of $53m mainly arising from the Malawian Kwacha, Ugandan and Kenyan shilling)”, Airtel said in a note.

The Telco operator noted that some voice customers were barred in Nigeria during the last period and that “the loss of tower sharing revenues following the sale of towers in Tanzania, Madagascar and Malawi in the second half of 2022” had a negative impact on revenue as well.

In March of last year, Airtel sold its telecommunications tower firm in Malawi to Helios Tower for USD54.7 million. The fiscal year of Airtel concludes on March 31. According to its unaudited statement, its user base increased by 13% in nine months to 47.8 million from 42.4 million, led by mobile data and mobile money services.

The annualised transaction value increased by 37% to about USD100 billion in the third quarter of the fiscal year 2023, according to the report. Speaking about the result, Segun Ogunsanya, chief executive officer, said “Providing affordable, innovative and essential services to customers in our 14 markets with unparalleled network quality and customer service is integral to our ambition of transforming lives across Africa”.

According to Ogunsanya, these strong results are a testament to this strategy despite the current macroeconomic and geopolitical uncertainties. “The execution of our six-pillar strategy continues to provide the foundation for growth, driving 10% customer growth, supported by 14% growth in data customers and over 22% growth in mobile money customers”, Airtel Chief added.

He noted that higher usage across voice, data and money, have contributed to further ARPU growth of over 7%, resulting in 18% revenue growth in the quarter as penetration across each segment continues to increase. “I am particularly excited by the performance of our mobile money business, with annualized transaction value reaching nearly $100bn, as we continue to drive financial inclusion in the continent.

“Despite the inflationary pressures across our markets, the strong revenue performance in the first nine months of the year, combined with a continued focus on cost optimisation, contributed to EBITDA growth of over 17% in constant currency, with stable EBITDA margins. “Our strong operating performance, combined with a continued focus on our capital allocation priorities has facilitated the de-risking of our balance sheet with the early repayment of $450m HoldCo debt in July this year.

“We will continue to invest in expanding our network and evolving our service offerings to further deepen both financial and digital inclusion across our markets. We have especially focused on enhancing our spectrum footprint across all our markets. “Over the last nine months we have spent almost $490m on 4G and 5G spectrum across key markets to improve network capacity and quality, future-proof the company for continued growth opportunities and facilitate economic progress in all our markets.

“I am particularly pleased with these results which demonstrate the opportunities these markets offer, our ability to deliver against these opportunities and the contribution we make to local communities and economies across our footprint. “For the remainder of the financial year, we continue to anticipate sustained growth in the business with continued EBITDA margin resilience”, Ogunsanya said.


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