Airtel Africa losses 99% of its profits on the back of currency devaluation in Nigeria and Malawi
Airtel Africa, a prominent telecommunications firm operating in 14 African countries, has reported a staggering 99% decline in profits for the last fiscal year. The primary factors contributing to this financial setback are significant currency devaluations in key markets, including Nigeria, Malawi, Zambia, and Kenya.
The company’s profits plummeted to $2 million, a stark contrast to the $523 million recorded in the same period the previous year. The adverse effects of the Naira’s devaluation in Nigeria and the Malawian Kwacha amounted to a combined cost of $301 million for Airtel Africa. Had it not been for these currency devaluations, the profit before tax for the nine months ending December 2023 would have stood at $840 million.
Despite the challenging financial results, Airtel Africa’s Group Chief Executive Officer, Olusegun Ogunsanya, remains optimistic about the company’s future. Ogunsanya emphasized that the currency devaluation, particularly in Nigeria, will not hinder the execution of their growth plans. He outlined the company’s strategic priorities, including capital allocation to fully repay HoldCo debt by May 2024 and continuing their balance sheet de-risking strategy. Additionally, Airtel Africa plans to invest in new business opportunities, such as their recently launched data center business, Nxtra by Airtel. The board is set to initiate a share buy-back program of up to $100 million, commencing in early March 2024 over a 12-month period.
Airtel Africa’s financial statement highlighted some positive aspects amid the challenging economic conditions. The group’s mobile services revenue experienced a notable growth of 18.6%, driven by an 11.2% increase in voice revenue and a substantial 28.5% growth in data revenue. Mobile money revenue also demonstrated resilience, growing by 31.8% in constant currency. The company’s total customer base expanded by 9.1% to reach 151.2 million, reflecting the rising adoption of mobile data and mobile money services. Notably, data customers increased by 22.4% to 62.7 million, while mobile money customers saw a 19.5% growth to reach 34.3 million.
Airtel Africa’s ability to maintain growth in key operational areas and adapt to changing market conditions underscores its resilience in the face of economic challenges. The company’s strategic initiatives, including debt repayment, new business ventures, and a share buy-back program, indicate a commitment to navigating the current financial landscape while positioning itself for future success.
