Airtel Africa announces $471 loss due to naira devaluation

Airtel Africa’s revenue in the second quarter of 2023 slumped in the second quarter of 2021, declining by $1.20 billion representing a 4.4 percent decline due to the devaluation of the Naira.

According to the company’s financial statement filed at the Nigerian Exchange, the unification of the exchange rate by the Central Bank which pushed the exchange rate from N460/$ in June to N790/$ was the reason for the loss

It stated that the company’s revenue increased by 9 percent during the period to $1.37 billion from the $1.25 billion it recorded in the same period for 2022.

However, it stated that the company used an exchange rate of N502/$ to prepare its financial result, noting that if the closing rate of N752/$ were used to calculate its financial results, revenues would have slumped to $1.20 billion representing a 4.4 percent decline.

Airtel Africa Plc made a loss after tax of $151 million in the period under review. This represents a 184.7 percent decrease compared to the profit after tax of $178 million made in the same period of 2022.

This was driven by the $570 million incurred in foreign exchange and derivative losses. It also recorded a loss before tax of $221 million.

Earnings per share (EPS) for the period declined to negative 4.5 cents. This represents a 204 percent decrease from the 4.4 cents recorded in the same quarter of 2022.

The company saw its tax bill reduced on account of the naira devaluation from $119 million in the prior period to $84 million in the current financial statement.

Despite the harsh macroeconomic environment, Airtel Group saw its customer base increase by 8.8 per cent to 143.1 million users. The customer base for its Nigerian subsidiary grew by 4.8 per cent as the average revenue per user (ARPU) increased by 16 per cent.

Profit after tax was negative ($151m) driven largely by a foreign exchange loss of $471m recorded in finance cost before tax and $317m after tax because of the devaluation of the Nigerian naira in the month of June 2023.

In July 2022, the Group prepaid $450m of outstanding external debt at HoldCo. The remaining debt at HoldCo is now $550m, falling due in May 2024, while cash at the holding companies was $505m at the end of the period.

Airtel Africa is a telecoms and mobile money service company operating in 14 countries across West, South, Central and East Africa.