Airtel Africa sees profit surge despite currency headwinds

DAR ES SALAAM: AIRTEL Africa reported significant profit gains and subscriber growth as the company continues to contend with currency devaluation across the continent.

For Q1 of this year, ending June 30, Airtel Africa announced a year-on-year profit increase of 120.3 per cent, reaching 31 million US do lars, a notable recovery from a loss of 151 million US dollars in Q1 2023.

The profit was, however, impacted by an 80 million US dollars “exceptional derivative” and forex losses due to further depreciation of the Nigerian naira in the first quarter.

The company’s revenue decreased by 16.1 per cent to 1.15 billion US dollars, and earnings before interest, taxes, depreciation and amortisation (EBITDA) declined by 23.3 per cent to 523 million US dollars.

The total customer base expanded by 8.6 per cent to 155.4 million, with data customer penetration rising by 13.4 per cent to 64.4 million.

Additionally, data usage grew by 25 per cent to 6.2GB, and smartphone penetration increased by 4.7 per cent to 41.7 per cent.

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Mobile money revenue saw a growth of 10.1 per cent, increasing from 201 million US dollars in the same quarter last year to 222 million US dollars.

Airtel Group CEO Sunil Taldar said through a release over the weekend that the telco will build on the strong foundation established over many years to deliver on these new business opportunities.

“The continued revenue growth momentum once again reflects the resilient demand for our services, with sustained growth in our customer base and usage,” Mr Taldar said.

The telco statement said they have launched a comprehensive cost efficiency programme to identify specific cost reduction initiatives across the Group.

“We have already seen success in this project, with savings arising in network and distribution costs, and continued opportunities as contract renegotiations continue.

We expect sustainable savings to continue as the year progresses,” he said.

Revenue in constant currency grew by 19.0 per cent in Q1’25, driven by 33.4 per cent growth in Nigeria and 22.3 per cent growth in East Africa, respectively.

Reported currency revenues declined by 16.1 per cent to 1.156bilion US dollars reflecting the impact of currency devaluation, particularly in Nigeria.

Across the Group mobile services revenue grew by 17.4 per cent and Mobile Money revenue grew by 28.4 per cent in constant currency.

The statement showed that a strong capital structure is critical to enabling these ambitions and future proofing our ambitious growth targets.

“During the quarter, we fully repaid the outstanding debt due at the HoldCo and we remain committed to further reduce foreign currency exposure across the Group to limit the impact of currency devaluation on our business,” the statement said.

The growth opportunity across their markets remains compelling and they continue to focus on margin improvement as indicated in this final year results.