Airtel Africa Posts Strong Half-Year Results Despite Currency Challenges

Airtel Africa PLC, a telecommunications and mobile money services provider in 14 African countries, has reported resilient and robust operating performance for the half year ending September 30, 2023. The growth was achieved amidst significant foreign exchange headwinds, particularly in Nigeria, demonstrating the company’s ability to navigate challenging economic conditions.

Customer Growth and Service Penetration

Airtel Africa’s total customer base experienced a notable increase of 9.7%, reaching 147.7 million. This growth can be attributed to the rising penetration of mobile data and mobile money services, which saw a 23.0% and 23.1% increase in data and mobile money customers, respectively. The company now boasts 59.8 million data customers and 36.5 million mobile money customers.

Financial Resilience

In terms of financial performance, Airtel Africa achieved a 19.7% growth in revenue in constant currency, translating to $2,623m in reported currency, despite a 4.7% decline in Q2’24 due to the devaluation of the Nigerian naira in June 2023. Notably, all segments of the company delivered double-digit constant currency revenue growth. Mobile services revenue, which includes voice and data, grew by 18.3%, while mobile money revenue saw an impressive 30.9% increase in constant currency.

The company’s EBITDA increased by 21.2% in constant currency and 3.7% in reported currency, reaching $1,302m. This reflects a solid EBITDA margin of 49.6%, which is a 70 basis points improvement over the previous period. However, the company recorded a loss after tax of $13m, primarily due to a foreign exchange loss of $471m before tax and $317m after tax, caused by the devaluation of the Nigerian naira.

Capital Allocation and Dividends

Airtel Africa’s capital expenditures were marginally higher compared to the prior period, totaling $312m. The company’s capex guidance for the full year remains between $800m and $825m. The remaining debt at the Holding Company level stands at $550m, due in May 2024. With $495m in cash at the HoldCo and a leverage ratio of 1.3x as of September 2023, the Group is well-positioned to repay this debt when due. The Board has declared an interim dividend of 2.38 cents per share, a 9% increase, aligning with the company’s progressive dividend policy.

Sustainable Growth and Community Impact

Airtel Africa continues to emphasize its commitment to sustainability and community impact. The company has launched a landmark five-year $57m partnership with UNICEF, aiming to reach one million children through educational programs by 2027. Furthermore, Airtel Africa is actively working on reducing its carbon footprint, implementing Scope 1 and 2 emissions reductions and developing a robust Scope 3 strategy.

Group Chief Executive Officer, Olusegun Ogunsanya, expressed his satisfaction with the company’s performance, highlighting the resilience amidst challenging economic conditions. He emphasized the company’s focus on delivering affordable and reliable telecom and mobile money services across its markets. Despite the immediate impact of currency devaluation and rising diesel prices, particularly in Nigeria, Airtel Africa is well-positioned for sustained growth and profitability.

Airtel Africa Half Year Results Summary: