Airtel Africa’s Profit Down $70m Over Naira Devaluation

Samuel Mobolaji

Despite healthy growth in its customer base and revenue, Airtel Africa Plc posted a decline of 7.3 per cent in its profit for nine months result for the financial year 2022.

According to a regulatory filing on the Nigerian Exchange, the telecom company account shows a $70 million FX loss due to the naira devaluation in the period, other Africa markets’ currencies depreciation also added to the losses.

Also, a review of Airtel Africa’s unaudited financial statement for the nine months of 2022 results shows that topline growth was overtaken by rising expenses and net finance costs.

Consequent to some adjustments, the telecom operators’ earnings per share slumped 5.8 per cent in 2022 Africa’s focus telecom operator reported that its profit before tax in the nine months to December 31 fell by 7.3 per cent to USD801 million from USD864 million in the comparable year in 2021.

The telecom company’s revenue increased by 12 per cent to USD3.91 billion in 2022 from USD3.49 billion 12-month earlier, while earnings before interest, tax, depreciation and amortisation increased by 13 per cent to USD1.92 billion from USD1.70 billion. However, expenses jumped by 11.7 per cent to USD2.00 billion from USD1.80 billion, while its net finance costs spiked 78 per cent to USD519 million from USD291 million.

“Net finance costs increased by $228 million largely due to higher foreign exchange and derivative losses of $184 million mainly comprised of a $40 million loss on derivatives and higher foreign exchange losses arose from the restatement of balance sheet liabilities (a loss of $70m on devaluation of the Nigerian Naira, and other devaluation losses of $53m mainly arising from the Malawian Kwacha, Ugandan and Kenyan shilling)”, Airtel said in a note.

The Telco operator noted that some voice customers were barred in Nigeria during the last period and that “the loss of tower sharing revenues following the sale of towers in Tanzania, Madagascar and Malawi in the second half of 2022” had a negative impact on revenue as well.

Speaking about the result, Segun Ogunsanya, chief executive officer, said “Providing affordable, innovative and essential services to customers in our 14 markets with unparalleled network quality and customer service is integral to our ambition of transforming lives across Africa”.

According to Ogunsanya, these strong results are a testament to this strategy despite the current macroeconomic and geopolitical uncertainties.

“The execution of our six-pillar strategy continues to provide the foundation for growth, driving 10 per cent customer growth, supported by 14 per cenjt growth in data customers and over 22 per cent growth in mobile money customers”, Airtel Chief added.

“We will continue to invest in expanding our network and evolving our service offerings to further deepen both financial and digital inclusion across our markets. We have especially focused on enhancing our spectrum footprint across all our markets.

“Over the last nine months we have spent almost $490million on 4G and 5G spectrum across key markets to improve network capacity and quality, future-proof the company for continued growth opportunities and facilitate economic progress in all our markets.

“I am particularly pleased with these results which demonstrate the opportunities these markets offer, our ability to deliver against these opportunities and the contribution we make to local communities and economies across our footprint.

“For the remainder of the financial year, we continue to anticipate sustained growth in the business with continued EBITDA margin resilience”, Ogunsanya said.