AIRTEL HEMORRHAGES $1.7 BILLION AS NIGERIAN, MALAWIAN CURRENCIES CRUMBLE
Airtel Africa, the continent’s second-largest telecoms company with a strong presence in Nigeria, is facing significant financial headwinds due to currency devaluations in key markets. The company reported a hefty $1.7 billion loss in derivative and foreign exchange transactions for the fiscal year ending March 31, 2024.
This blow comes despite positive underlying business performance. Measured in a constant currency (eliminating the impact of exchange rate fluctuations), Airtel Africa saw impressive service revenue growth of 20.9% for the entire year, accelerating further to 23.1% in the final quarter. However, these gains are obscured when translated into US dollars due to the weakening currencies in some of their key markets.
The combined effect of the devalued Nigerian Naira and Malawian Kwacha resulted in a 5.3% decline in overall group revenue, down to $4.979 billion. Similarly, profitability as measured by EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also suffered, dropping by 5.7% to $2.428 billion.
These figures highlight the challenges Airtel Africa faces as a result of currency fluctuations. While their core business seems to be performing well, the devaluation of local currencies erodes their reported profits and creates financial instability. The company will need to navigate this complex situation to maintain its growth trajectory.
Source: Nariameterics
Read Also:
