Airtel Africa Plunged by 10.3% after Earnings Storm
Airtel Africa Plc lost more than 10% of its market valuation in the stock market after huge earnings loss posted on the Nigerian Exchange. The market price of the telecom company declined by 10.3% week-on-week to N1,973 per share from N2,200, details from the equities market tracked revealed.
The telecom giant launched share buyback on London Stock Exchange through Citigroup Global Market. Shareholders had, in mid-2023 approved the cancellation of some of its shares to utilize its strong free cash flows.
The telecom company posted a loss after tax of $89 million during the year ended March 31 2024. Its unimpressive earnings results was primarily impacted by the $549 million net of tax impact of the exceptional derivative and foreign exchange losses.
“Excluding these exceptional items, profit after tax for the year ended March 31 2024 was $460 million,” the company said in its earnings statement. Airtel Africa’s earnings per share settled at negative 4.4 cents, according to its financial update on the Nigerian Exchange.
Ticker: AIRTELAFI is one of the less volatile stocks on the Nigerian equities market currently following share buybacks from minority shareholders or non-controlling interest.
On the operational side, Airtel Africa reported that its total customer base grew by 9.0% to 152.7 million in 2023, despite NIN-SIM linkage directive, which affected its immediate rival, MTN Nigeria, negatively.
The telecom reported 17.8% increase in data customers to 64.4 million and a 20.8% increase in data usage per customer in the period, details from its financial report showed. Its mobile money subscribers grew by 20.7%, reflecting continued investment in distribution to drive increased financial inclusion across Africa markets.
Airtel said annual transaction value grew to $112 billion in 2023, adding that increased transactions across the ecosystem reflect the enhanced range of offerings and increased customer adoption.
This boosted its average revenue per user by 8.6%, helped by continued network investment to support an enhanced customer experience and drive increased 4G coverage. Management said 95% of sites are now 4G operational, facilitating a 42.3% increase in 4G customers over the year.
On 1 February 2024, the company announced that, in light of the increase in HoldCo cash, current leverage, and consistent strong operating cash generation, the board intended to launch a share buyback programme of up to $100 million over a 12 month period.
‘The Board believes that repurchasing its own shares is an attractive use of its capital in light of the group’s strong long term growth outlook. The programme will be executed using its cash reserves and in accordance with applicable securities laws and regulations’, the statement reads.
In March 2024, Airtel Africa plc announced the commencement of its share buyback programme. The programme is expected to be phased over two tranches, with the first tranche commencing on 1 March 2024 and anticipated to end on or before March 31, 2024.
For the first tranche, the telecom company plans to buyback shares worth $50 million, with Airtel Africa entering into an agreement with Citigroup Global Markets Limited to conduct the buyback on its behalf. During March 2024, the company purchased 7.4 million shares for a total consideration of $9 million, as details from its results showed.
In the third quarter of 2023, Airtel Africa announced the cancellation and extinction of all its deferred shares of USD 0.50 nominal value each, which was approved by shareholders at the annual general meeting of the company held on July 4, 2023.
Management said the cancellation and extinction was sanctioned by the High Court of England and Wales. The effect of the capital reduction is to create additional distributable reserves.
In the official statement, the company said the reserve will be available to the company going forward and may be used to facilitate returns to shareholders in the future, whether in the form of dividends, distributions, or purchases of the company’s own shares.
The company confirms that, following the capital reduction, the issued share capital of the company will be 3,758,151,504 ordinary shares of USD 0.50 nominal value each, carrying one vote each. There are no shares held in the Treasury. The total voting rights in the company will therefore be 3,758,151,504. PZ Cussons 27% Cheaper, Still Above Offer Rejected by SEC
