Following a significant loss in profits that was reported on the Nigerian Exchange, Airtel Africa Plc lost almost 10% of its market valuation on the stock market. According to data from the equities market monitoring, the market price of the telecom business dropped by 10.3% per week to N1,973 per share from N2,200.
The telecom behemoth began repurchasing shares on the London Stock Exchange via Citigroup Global Market. In order to take advantage of its excellent free cash flows, shareholders authorized the cancellation of part of the company’s shares in the middle of 2023.
The telecom business reported a $89 million loss after taxes for the fiscal year that concluded on March 31, 2024. The $549 million net of tax effect of the extraordinary derivative and foreign currency losses was the main cause of its lackluster financial performance.
“Excluding these exceptional items, profit after tax for year ended March 31 2024 was $460 mmillion”, the company said in its earnings statement. Airtel Africa’s earnings per share settled at negative 4.4 cents, according to its financial update on the Nigerian Exchange.
Ticker: AIRTELAFI is one of the less volatile stocks on the Nigerian equities market currently following share buyback from the minority shareholders or non-controlling interest.
On the operational side, Airtel Africa reported that total customer base grew by 9.0% to 152.7 million in 2023, despite NIN-SIM linkage directive, which affected its immediate rivals, MTN Nigeria, negatively. The telecom reported 17.8% increase in data customers to 64.4 million and a 20.8% increase in data usage per customer in the period, details from its financial report showed.
Its mobile money subscribers grew by 20.7%, reflecting continued investment in distribution to drive increased financial inclusion across Africa markets.
Airtel said annual transaction value grew to $112 billion in 2023, adding that increased transactions across the ecosystem reflects the enhanced range of offerings and increased customer adoption.
This boosted its average revenue per user 8.6%, helped by continued network investment to support an enhanced customer experience and drive increased 4G coverage. Management said 95% of sites are now 4G operational, facilitating a 42.3% increase in 4G customers over the year.
On 1 February 2024, the company announced that in light of the increase in HoldCo cash, current leverage and the consistent strong operating cash generation, the Board intended to launch a share buy-back programme of up to $100million over a 12 month period.
‘The Board believes that repurchasing its own shares is an attractive use of its capital in light of the Group’s strong long term growth outlook. The programme will be executed using its cash reserves and in accordance with applicable securities laws and regulations’, the statement reads.
in March2024, Airtel Africa plc announced the commencement of its share buyback programme. The programme is expected to be phased over two tranches, with the first tranche commencing on 1 March 2024 and anticipated to end on or before 31, 2024.
For first tranche, the telecom company plans to buyback shares worth $50 million, with Airtel Africa entering into an agreement with Citigroup Global Markets Limited to conduct the buy-back on its behalf. During March 2024, the company purchased 7.4 million shares for a total consideration of $9 million, details from its results showed.
In the third quarter of 2023, Airtel Africa announced the cancellation and extinction of all its deferred shares of USD 0.50 nominal value each, which was approved by shareholders at the annual general meeting of the Company held on 4 July 2023.
Management said the cancellation and extinction was sanctioned by the High Court of England and Wales. The effect of the capital reduction is to create additional distributable reserves.
In the official statement, the company said the reserve will be available to the company going forward and may be used to facilitate returns to shareholders in the future, whether in the form of dividends, distributions or purchases of the company’s own shares.
The company confirms that, following the capital reduction, the issued share capital of the company will be 3,758,151,504 ordinary shares of USD 0.50 nominal value each, carrying one vote each. There are no shares held in treasury. The total voting rights in the company therefore will be 3,758,151,504.
