Business Standard

Airtel Africa posts $151 million net loss in Q1; revenue rises 9.6%

Higher finance costs and June devaluation of Nigerian currency identified as contributing factors

Bharti Airtel, Airtel Africa

Subhayan Chakraborty New Delhi

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Despite a 10 per cent increase in revenue, telecom provider Airtel Africa announced a net loss of $151 million in the first quarter (April-June) of FY24 on Thursday. This compares to a profit of $178 million in the same quarter of the previous year.

In the quarter immediately preceding Q1 FY24, the company reported a net profit of $227 million.

In the most recent quarter, Airtel Africa's revenue grew by 9.6 per cent year-on-year to $1.3 billion, up from $1.25 billion in Q1 FY23. The Ebitda was recorded at $682 million, marking an increase of 11.1 per cent.

Airtel's African operations have grappled with higher finance costs and felt the impact of the Nigerian currency Naira's devaluation in June.

The total customer base in the latest quarter expanded by 8.8 per cent to 143.1 million, as mobile data and mobile money service penetration continued to climb. This development led to a 22 per cent surge in data customers to 56.8 million and a 24.3 per cent increase in mobile money customers to 34.3 million, according to the company.

Forex Impact

"The annualised impact of the devaluation in Nigeria incurred in June 2023, assuming no further devaluation for the remainder of the year, is expected to be between $850m and $900m on annualised revenues and between $450m and $500m on annualised Ebitda. The vast majority of this impact is anticipated to materialise in Q2’24 and the rest of the fiscal year," the company stated.

Segun Ogunsanya, Airtel Africa CEO, commented on the strong operating performance of the company despite the impact of foreign exchange headwinds. "This quarter saw the announcement of changes to the FX market in Nigeria resulting in significant Naira devaluation. We view this reform as a positive development for the medium and long-term evolution of our business in Nigeria, our largest market," he said.

Emphasising the significant untapped growth potential in the country, supported by highly attractive fundamentals, Ogunsanya pointed out that these factors have driven a strong operating performance, with a five-year revenue and Ebitda compound annual growth rate (CAGR) of 23.5 per cent and 27.3 per cent in constant currency, respectively.

He added that foreign reforms are anticipated to improve liquidity over time, thereby easing the challenges international businesses have faced in recent years in accessing US dollars, which in turn has hampered accelerated growth.

The company noted that it has been actively reducing its forex exposure across the group over the past few years and will continue to focus on this area in the future to mitigate the impact of any potential future devaluation.

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First Published: Jul 27 2023 | 9:18 PM IST

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