AIRTEL AFRICA REPORTS A 99% DECLINE IN PROFITS DUE TO CURRENCY DEVALUATION IN NIGERIA AND MALAWI
Airtel Africa, a telecommunications company operating in 14 African countries, faced a significant challenge last year with a 99% decline in profits due to currency devaluation in key markets such as Nigeria, Malawi, Zambia, and Kenya.
Currency devaluations in Nigeria’s Naira and Malawian Kwacha squeezed Airtel Africa’s margins, resulting in profits of $2 million for the year. The Naira’s devaluation alone cost Airtel $301 million. Excluding these impacts, the profit before tax for the nine months ending December 31, 2023, would have been $840 million.
This $2 million profit is a notable decrease from the $523 million profit recorded in the nine months ending December 2022. The financial challenges also contributed to a 1.4% drop in Airtel’s revenue, falling from $3.9 million to $3.8 million compared to the previous year.
Despite the tough results, Airtel Africa’s Group Chief Executive Officer, Olusegun Ogunsanya, remains optimistic. He emphasized that while currency devaluation, especially in Nigeria, affected reported financial performance, it would not hinder the execution of growth plans. Ogunsanya highlighted the focus on capital allocation priorities, intending to fully repay HoldCo debt due in May 2024, and emphasized the company’s commitment to its balance sheet de-risking strategy. Additionally, he mentioned investments in new opportunities, such as the data center business Nxtra by Airtel, launched in December. The company’s board plans to initiate a share buy-back program of up to $100 million starting in early March 2024 over 12 months.
Airtel Africa’s financial statement revealed positive aspects, with group mobile services revenue growing by 18.6%. This growth was driven by an 11.2% increase in voice revenue and a substantial 28.5% growth in data revenue. Mobile money revenue also showed a robust growth of 31.8% in constant currency. The company’s total customer base expanded by 9.1% to reach 151.2 million, with a notable increase in data customers by 22.4% to 62.7 million and mobile money customers by 19.5% to 34.3 million, reflecting the rising penetration of mobile data and mobile money services.
Source: TechCarbal
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