Airtel Africa Value Rises by 28% as Market Downplays Earnings Loss

Airtel Africa Value Rises by 28% as Market Downplays Earnings Loss

The market value of Airtel Africa Plc spiked by about 30% to N6.727 trillion as the market downplayed the telecom company’s earnings miss. In the previous week, the company had recorded more than 20% share price increase even with its unimpressive earnings result.

At the current level, Airtel Africa is the most valuable on the Nigerian Exchange, followed by Dangote Cement (N5.576T), and then MTN Nigeria Plc, its immediate rival currently valued at N4.9 trillion – after earnings was eclipsed by negative impacts of FX losses.

The telecom company’s earnings reacted negatively to the devaluation of the naira in June 2023. This resulted in a profitability decline in the first and second quarters of 2024 accounting period. Airtel Africa recorded a US$13 million loss after tax in H1 2024. Its earnings per share then nosedived to US$0.01, a development that would possibly affect dividend payment.

But the telecom star is noted to have a special advantage coming from its dual listing – On the Nigerian Exchange and London Stock Exchange. MarketForces Africa gathered that foreign portfolio investors often ride the wave using Airtel Africa to upstream funds abroad by offloading their portfolio at the London Stock Exchange.


In its first half of 2024 results, Airtel Africa’s revenue grew marginally by 2.3% to US$2.6 billion from US$2.56 billion in the comparable period in its financial year 2023 result.

Specifically, its second quarter result showed that total revenue declined by 10% to US$1.25 billion amidst rivalry in the industry from US$1.38 billion in the first quarter of FY2024.

Amidst dirty competition with its immediate rival, the telecom giant deepened its footprint in the market. Its numbers showed that mobile money revenue was the major driver of top-line growth.

Not losing focus on things that matter, the telecom company’s data revenue remained resilient in the period, increasing by 5.9% year on year to US$915 million from US$864 million in the comparable period.

In its note, Airtel Africa said the total customer base grew by 9.7% to 147.7 million, as the penetration of mobile data and mobile money services continued to rise.

The company recorded a 23.0% increase in data customers to 59.8 million and a 23.1% surge in mobile money customers to 36.5 million.

In the period, net finance cost increased by 144.1% to US$873 million from US$358 million 12 months ago. Analysts said its elevated net finance costs mirror the 141.2% increase in finance cost despite a 54.5% rise in finance income.

CSL Stockbrokers thinks that higher interest on market debt, mostly from spectrum acquisitions and license renewal payments made in the previous year, as well as higher interest on lease liabilities, contributed to the increase in net finance expenses.

This peppered the bottom line as pre-tax profit decreased by 97.7% year on year to US$12 million from US$330 million.  The company recorded a loss of US$13 million in H1 2024. EPS declined to US$0.01 in H1 2024.

Commenting about the results, Olusegun Ogunsanya, Group chief executive officer 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”.

Ogunsanya said 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.

He said the 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% and 20.7% respectively, allowing us to further de-risk 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 2024 versus FY 2023.” No Shortage of Naira Notes, CBN Assures Nigerians