Airtel Africa Grows Profit by 102% to $31 Million
Airtel Africa Plc recorded $31 million as profit in the first half of 2024, the telecom company told the Nigerian Exchange in a regulatory filing, reversing $151 million net loss posted in the comparable period in 2023.
The telecom company hints that the group is deleveraging its balance sheet to reduce foreign exchange exposure. Management said outstanding debt due to Holdco was fully repaid in the second quarter as part of effort to offset its debt position.
This reduced the company finance costs in the period, thus strengthened the bottom line. The telecom giant’s unaudited financial statement for Q1 2025 showed that revenue dropped by 16.1%year on year to US$1.16 billion from US$1.38 billion in Q1 2024.
The company attributed the decline in revenue to significant currency devaluations in several countries, including Nigeria, Malawi, Zambia, and Tanzania. Specifically, the Nigerian Naira devalued from a weighted average FX rate of N503 in the prior period to N1,384 in the current period.
Earnings before interest tax depreciation and amortisation (EBITDA) margin crashed to 45.3% from 49.5% in Q1-2024 and 46.5% in Q4-2024, the company said.
The telco giant explained that a substantial increase in fuel prices across its African markets and the lower contribution of Nigeria to the Group after the naira devaluation contributed to a decline in EBITDA margin.
It stated that profit after tax of $31 million in the first half of 2024 was impacted by $80 million of exceptional derivative and foreign exchange losses (net of tax), arising from the further depreciation in the Nigerian naira during the quarter.
The translation impact of currency devaluation on reported currency results was the primary driver of EPS before exceptional items declining from 3.9 cents in the prior period to 2.3 cents, Airtel Africa said in the statement.
Airtel’s operating profit declined by 27.5% year on year to US$335 million in Q1 2025 from US$462 million in Q1 2024 amidst a 14.5% increase in Depreciation and amortization to US$7188 million in Q1 2025.
Also, net finance cost decreased, down 64.1% year on year to US$245 million in Q1 2025 from US$683 million in Q1 2024. The reduced net finance cost mirrors the 63.4% year on year decrease in finance cost amidst a relatively unchanged finance income.
The decline in net finance cost was attributed to the reduced derivative and foreign exchange losses recorded in Q1 2025. The company recorded FX losses of US$136 million compared to the US$471 million recorded in the prior year.
It then delivered a pre-tax Profit of US$74 million in Q1 2025, which is a significant turnaround from a pre-tax loss of US$221 million in Q1 2024.
However, Airtel incurred a tax expense of US$43 million, compared to a tax credit of US$70 million in Q1 2024. This resulted in a net profit of US$31 million in Q1 2025, in contrast to a net income loss of $151 million in Q1 2024.
Commenting on the results, Sunil Taldar, Chief executive officer, said, the continued revenue growth momentum once again reflects the resilient demand for our services, with sustained growth in our customer base and usage.
“Our superior execution enables us to capture these opportunities, whilst retaining our reputation as a cost leader across the industry. Having visited most of our OpCos since I joined Airtel Africa, I am encouraged by the scale of the opportunity available across our markets in both the GSM and mobile money business”.
Airtel Africa CEO said, “A key priority for us is to look for new opportunities to further grow our business especially in the enterprise, fibre and data centre businesses across our footprint in Africa. We will build on the strong foundation established over many years to deliver on these new business opportunities.
“Most importantly, our emphasis is on significantly improving customer experience by simplifying customer journeys and providing best in class network experience to our customers, whilst remaining focused on driving efficiencies across the business.
“We have initiated a comprehensive cost optimisation programme 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”.
Taldar added 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 growth opportunity across our markets remains compelling and we continue to focus on margin improvement as indicated in our financial year 2024 results.” Shun Protest, Tinubu Working to Address Hunger – Wike
