Airtel Africa Reports $13m Loss After Tax in H1 2023

Kayode Tokede

Airtel Africa Plc has announced a $13 million loss after tax for the half year (H1) ended September 30, 2023, from the $330 million profit after tax reported in half year of 2022.

The loss was driven largely by a foreign exchange loss of $471 million recorded in finance cost before tax and because of the devaluation of the Nigerian naira in June 2023.

The telecommunication giant declared $12 muilion profit before tax in H1 2023, which was a decline of 97.7 per cent from the $516 million reported in H1 2022, as total finance cost reached $873 million in H1 2023, from the $358 million reported in H1 2022.

Amid the $13 million loss in H1 2023, the board and management of Airtel Africa declared an interim dividend of 2.38 cents per share, an increase of nine per cent, in-line with its progressive dividend policy.

Revenue in constant currency grew by 19.7 per cent, with reported currency revenues up by 2.3 per cent to $2,623 million in H1 2023 from $2,565million in H1 2022.

According to Airtel Africa, “whilst reported currency revenue growth was impacted by currency devaluation, all segments delivered double-digit constant currency revenue growth.

“Across the Group mobile services revenue grew by 18.3 per cent in constant currency, driven by voice revenue growth of 11.5 per cent and data revenue growth of 28.1 per cent. Mobile money revenue grew by 30.9 per cent in constant currency.

“EBITDA increased by 21.2 per cent in constant currency, and 3.7 per cent in reported currency to $1,302 million, with an EBITDA margin of 49.6per cent, reflecting a 70 basis points margin improvement over the prior period despite inflationary cost pressures and foreign exchange headwinds. Reported currency EBITDA declined by 3.3per cent in Q2’24 as the full impact of the Nigerian naira devaluation in June 2023 was incorporated.”

“EPS before exceptional items was 7.0 cents, an improvement of 3.2per cent. EPS before exceptional items and excluding foreign exchange and derivative losses was 10.7 cents. Basic EPS at negative (1.5 cents) compared to 7.9 cents in the prior period, was impacted by $317million net exceptional loss on account of naira devaluation in June 2023.”

The company stated that its total customer base grew by 9.7 per cent to 147.7 million, as the penetration of mobile data and mobile money services continued to rise, driving a 23 per cent increase in data customers to 59.8 million and a 23.1 per cent increase in mobile money customers to 36.5 million.

The Group chief executive officer, Airtel Africa, Olusegun Ogunsanya, in a statement said, “I am pleased to report a strong operating performance for the Group despite foreign exchange headwinds in many of our markets and specifically in Nigeria.

“The resilient growth in voice, data and mobile money usage levels reflects the inherent demand for these essential services across our footprint, and our six-pillar ‘win-with’ strategy continues to ensure we capture this growth opportunity by expanding our customer base and providing the platform to enable increased usage across the network. This strong momentum is supported by continued cost efficiencies which enabled further EBITDA margin expansion.

“As reported in July 2023, our results for the first quarter were significantly impacted by the changes to the FX market in Nigeria, introduced by the Central Bank.

“Whilst the changes are required for the long-term benefit of the Nigerian economy, the immediate impact of the naira devaluation continues to weigh on our reported financial performance in the period.

“Our focus remains to enhance long term value by continuing to drive sustained and efficient growth. Over the last five years we have delivered constant currency revenue and EBITDA CAGR of 17.1 per cent and 20.7 per cent respectively, allowing us to further derisk the balance sheet and improve profitability across the Group.

“Looking forward, the delivery of affordable and reliable telecom and mobile money services across our markets remains our key focus. Our strong operating performance continues to make us a stronger and bigger company, which is well positioned to deliver against the growth opportunities these markets offer.

“Despite the challenges of rising diesel prices in Nigeria, we aim to limit the impact with continued operational leverage and further cost efficiencies to deliver an improved EBITDA margin in FY’24 versus FY’23.”