Airtel Africa Plc, has recorded $151m loss due to the harmonisation of foreign exchange rates in Nigeria.
It disclosed this in its second quarter report filed with the Nigerian Exchange Limited.
The telecom company said, “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. This impact has been classified as a non-operating exceptional item.”
Recall that in June, the Central Bank of Nigeria announced the unification of all segments of the Nigerian forex market.
The apex bank collapsed all windows into the Investors and Exporters window as part of the Federal Government’s effort to improve liquidity and stability in the market and attract foreign investors into the Nigerian economy.
In its latest financial report, Airtel said its revenue grew by 9.6 per cent to $1,377m from $1,257m as of June 2022.
Across the group, mobile service revenue grew by 19.1 per cent in constant currency, driven by voice revenue growth of 11.9 per cent and data revenue growth of 29.8 per cent. Mobile money revenue grew by 31.2 per cent in constant currency.
During the period under review, Airtel Africa’s total customer base grew by 8.8 per cent to 143.1 million, as the penetration of mobile data and mobile money services continued to rise, driving a 22 per cent increase in data customers to 56.8 million and a 24.3 per cent increase in mobile money customers to 34.3 million.
In the accompanying notes to the financial statement, Olusegun Ogunsanya, Airtel’s Chief Executive Officer, said, “The group delivered a strong operating performance with improvement in both constant currency revenue growth and EBITDA margin despite the challenging macro environment. The acceleration in voice, data and mobile money revenue growth is testament to the success of our six-pillar ‘win-with’ strategy.
“Our continuing investment in network and distribution enabled us to expand our customer base further, driving increased usage on our network. This strong momentum is supported by a continued focus on cost efficiencies, which enabled us to expand our EBITDA margins in the quarter. Despite the strong operating performance, our results have been impacted by foreign exchange headwinds.
“This quarter saw the announcement of the change to the FX market in Nigeria which resulted in a significant naira devaluation. We have welcomed this reform as very positive for the medium and long-term development of our business in Nigeria, our largest market. The country offers significant untapped growth potential, underpinned by highly attractive fundamentals. This has supported and sustained a strong operating performance which has seen a five-year revenue and EBITDA CAGR of 23.5 per cent and 27.3 per cent in constant currency, respectively.”
The Airtel Africa’s CEO said the firm expected the FX unification (reform) to improve liquidity over time, thereby alleviating the challenges faced by international businesses over the last few years associated with accessing dollars and thus hindering accelerated growth.
“However, in the reporting period, the devaluation has had a material impact on our results. Over the last few years, we have actively reduced our FX exposure across the group, and this will continue to be a focus area in the future to limit the impact of any future devaluation.
“Our focus remains on areas which we can control: the provision of reliable telecom and mobile money services, at affordable rates across our 14 sub-Saharan markets in Africa where demand for these services remains significant.”
“The excellent operating performance over the last quarter highlights this success, and we are well positioned to deliver against the growth opportunities these markets offer, with a continued focus on margin resilience,” Ogunsanya stated.
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