AIRTEL Africa incurred $89 million in losses after tax for the financial year ended 31 March, 2024 in contrast to an after-tax profit of $750 million twelve months earlier after a long-standing currency crisis in its largest market, Nigeria, left the bottom line battered.
Nigeria contributes 30 per cent of the wireless operator’s revenue, according to the company’s latest financial reports, with East Africa, Francophone Africa and the telco’s mobile money business accounting for the rest.
The naira, which continues to face foreign exchange headwinds after a dollar scarcity, returned to pre-pandemic crisis level, especially in the last few weeks. The naira plunged to its record low after a second devaluation of the currency in seven months in January. At $5 billion, Airtel’s turnover was slightly weaker by 5.3 per cent as all key revenue sources, except mobile money revenue fell by significant margins.
Airtel Money, the group’s fastest-growing unit, contributed 20 per cent more to the revenue pool than a year ago. The mobile money unit has been esteemed as the brightest spot in the telco’s business, with talks around spinning it off into an independent entity already at an advanced stage.
The mobile money business, which has witnessed considerable transformation following the success of its payments unit Smartcash across the continent, is on course to launch an initial public offer of $4 billion any moment soon, Bloomberg reported in March.
Earnings for Airtel Africa took a hit from a $1.1 billion derivative and foreign exchange losses in Nigeria, which, alongside a jump in finance costs to $482 million, triggered a loss before tax of $63 million. Airtel Africa incurred $1.2 trillion in loss due to foreign currency translation differences, which surged by 235.7 per cent yearly.
The total comprehensive loss for the year stood at $1.3 billion compared to a $397 million gain in 2023. Key initiatives include the reduction of US dollar debt across the business and the accumulation of cash at the HoldCo level to cover the outstanding debt due fully”, said CEO, OlusegunOgunsanya.
“We will continue to focus on reducing our exposure to the naira volatility”, he added. Airtel Africa is currently undertaking a share repurchase programme, as it seeks to splash $100 million on a ‘buy back’ of its own shares, saying it hopes this will strengthen the valuation of its stock.
