Airtel Africa posts 20% growth in Third quarter

Airtel Africa revenue in constant currency grew by 20.2%, with Quarter Three 2024 growth accelerating to 21.0%.

Reported currency revenues declined by 1.4% to $3,861m. In Q3’24, reported currency revenues declined by 8.3% as currency devaluation (primarily the Nigerian naira devaluation) continued to impact reported revenue trends.

According to the Airtel Africa report that was released recently, all segments continued to deliver double-digit constant currency growth.

“Accross the Group mobile services revenue grew by 18.6% in constant currency, driven by voice revenue growth of 11.2% and data revenue growth of 28.5%. Mobile money revenue grew by 31.8% in constant currency,” notes the report.

Constant currency EBITDA increased 21.9%, with Q3’24 EBITDA growing 23.3%. The EBITDA margin of 49.4% increased 72bps over the prior period despite foreign exchange headwinds and inflationary pressure.

Reported currency EBITDA declined by 0.4% to $1,908m, with Q3’24 EBITDA 8.3% lower as currency headwinds continued to impact reported trends.

Profit after tax was $2m in the period, primarily impacted by significant foreign exchange headwinds, particularly the $330m exceptional loss after tax following the devaluation of the Nigerian naira in June 2023 and the Malawian kwacha in November 2023 after the structural changes in their respective FX markets.

The Nigerian naira devalued further in Q3’24, resulting in a $140m derivative and foreign exchange losses net of tax, which is not treated as an exceptional item.

Olusegun Ogunsanya, Group Chief Executive Officer, on the trading update said “We remain focussed on the execution of our growth strategy and, combined with our strong operational execution, this has ensured that we continue to see sustained, positive growth momentum across the business, despite the inflationary and currency headwinds.

“Demand remains resilient, highlighting the vital nature of the voice, data and mobile money services we provide to our customers across the region, and has resulted in a strong 20.2% constant

currency revenue growth over the period, with an increase in EBITDA margins.

“This strong operating performance has limited the impact that currency movements have had on the Group. In this regard, whilst further currency devaluation, particularly in Nigeria, has weighed on our reported financial performance, it will not affect the execution of our growth plans.

“I am pleased to note that our sustained focus on capital allocation priorities will enable us to fully repay HoldCo debt when due in May 2024, ensuring the continued success of our balance sheet de-risking strategy. 

"This will allow us to continue investing in our strategic priorities to provide affordable and reliable services to customers across our markets, whilst also enabling us to capitalise on new business opportunities, such as our new data centre business, Nxtra by Airtel, which we launched in December,” said Ogunsanya.

He said that in light of their consistent strong operating performance and given current leverage, the Board intends to launch a share buy-back programme of up to $100m, starting early March 2024 over a 12-month period.

“We continue to be well positioned to deliver on the attractive growth opportunities our markets offer and despite the challenge of rising diesel prices, ongoing currency devaluation and inflationary pressures across some of our markets, we remain focussed on margin resilience.”