Airtel Africa Plc experienced pressure from currency fluctuations in its core countries, resulting in a $89 million loss after taxes. The depreciation of the Nigerian and East African markets resulted in significant foreign exchange losses, which negatively impacted the telecom company’s earnings for the year ending March 31, 2024.
Specifics revealed that throughout that time, group revenue decreased by 5.3% to $4,979 million. The telecom operator claimed that notable currency devaluations in Nigeria, Malawi, Zambia, and Kenya had a special effect on its revenue growth.
Nonetheless, its income from mobile services increased by 19.4% in constant currency, with voice and data expanding by 11.9% and 29.2%, respectively. Constant currency mobile service revenues climbed by 25.8% in Nigeria, 21.5% in East Africa, and 9.2% in Francophone Africa.
Mobile money revenue grew by 32.8% in constant currency, primarily driven by continued strong growth in East Africa. Total customer base grew by 9.0% to 152.7 million.
“We continue to bridge the digital divide with a 17.8% increase in data customers to 64.4 million and a 20.8% increase in data usage per customer”, management said in its earnings results.
Airtel stated that mobile money subscriber growth of 20.7% reflects its continued investment into distribution to drive increased financial inclusion across our markets.
The data show that, with an annual transaction value of about $112 billion in reported currency, there was a 38.2% rise in transaction value in constant currency. It was observed that a wider choice of services and more client uptake are reflected in the increased transactions throughout the ecosystem.
The business emphasized that more network investment is needed to provide improved customer experiences and expand 4G coverage. According to the report’s details, 95% of Airtel Africa’s sites are now 4G operational, enabling a 42.3% rise in 4G users over the course of the year.
Despite currency headwinds and inflationary pressure on our cost base, EBITDA margins were steady at 48.8%. With reported currency EBITDA down 5.7% to $2,428 million, constant currency EBITDA rose 21.3%. It said Q4’24 EBITDA margins of 46.5% were impacted by the lower contribution of Nigeria following the Q4’24 naira devaluation and rising energy costs across a number of markets.
Loss after tax was $89m, primarily impacted by significant foreign exchange headwinds, resulting in a $549 million exceptional loss net of tax following the Nigerian naira devaluation in June 2023 and Q4’24, and the Malawian kwacha devaluation in November 2023.
Basic EPS of negative (4.4 cents) compares to 17.7 cents last year. EPS before exceptional items was 10.1 cents, a decline of 25.9%. Both EPS before exceptional items and basic EPS were primarily impacted by significant derivative and foreign exchange losses during the year.
Capex was broadly flat at $737 million and was below our guidance largely due to a deferral in data centre investments.
“In addition, we invested $152 million in licence renewal and spectrum acquisitions, including $127 million for the Nigerian 3G licence renewal”, the company said in its latest report.
Airtel said it has around $680 million of cash available at HoldCo, to be utilized to fully repay the remaining $550 million debt, falling due in May 2024.
The report revealed that the Board has approved a share buyback programme of up to $100 million, over a period of up to 12 months.
“On 1 March 2024, we announced the commencement of the first tranche of this buyback up to a maximum of $50 million. During March 2024, the company purchased 7.4 million shares for a total consideration of $9 million.
“The Board has recommended a final dividend of 3.57 cents per share, making the total dividend for FY24 5.95 cents per share”, the management stated in the earnings report.
Speaking to the results, Olusegun Ogunsanya, Chief executive officer, said, “The consistent deployment of our ‘Win with’ strategy supported the acceleration in constant currency revenue growth over the recent quarters which has reduced the impact of currency headwinds faced across most of our markets.
“This strong revenue performance is a reflection not only of the opportunity that is inherent across our markets, but also the resilience of our affordable offerings despite the inflationary pressure many of our customers have experienced. Facilitating this growth has been, and will remain, fundamental to our performance.
“The investment in our distribution to catalyse growth, and the technology required to support this growth has been key. Furthermore, our rigorous approach to de-risking our balance sheet and our capital allocation priorities has materially reduced the risks that the currency devaluation has had on our business”.
He added that Key initiatives include the reduction of US dollar debt across the business and the accumulation of cash at the HoldCo level to fully cover the outstanding debt due.
“We will continue to focus on reducing our exposure to currency volatility. At the beginning of March, we launched our first buyback programme reflecting the strength of our financial position. The growth opportunity that exists across our markets remains compelling, and we are well positioned to deliver against this opportunity.
“We will continue to focus on margin improvement from the recent level as we progress through the year. I want to say a particular thank-you to our customers, partners, governments and regulators for their support and our employees for their unrelenting contribution to the business. Our purpose of transforming lives across Africa will continue to be our highest priority”, Airtel chief said.
