Airtel Africa profit jumps 102% in quarter ending June 30
TLDR
- Airtel Africa Plc records $31 million profit in Q2, marking a turnaround from a $151 million net loss in the same period last year.
- Profit attributed to balance sheet deleveraging, reducing foreign exchange exposure.
- Revenue drops by 16.1% year-on-year to $1.16 billion due to currency devaluations, notably in Nigeria, Malawi, Zambia, and Tanzania.
The Nigeria-listed Airtel Africa Plc posted a profit of $31 million for the quarter ending June 30, reversing the $151 million net loss from the same period last year.
The telecom company attributed this turnaround to efforts in deleveraging its balance sheet to reduce foreign exchange exposure. The group fully repaid outstanding debt to Holdco in the second quarter, which helped lower finance costs and strengthen the bottom line.
However, revenue dropped by 16.1% year-on-year to $1.16 billion from $1.38 billion in Q1 2024, primarily due to significant currency devaluations in Nigeria, Malawi, Zambia, and Tanzania. The Nigerian unit devalued from a weighted average rate of N503 in the previous period to N1,384.
Key Takeaways
We observe that Airtel Africa's Q1 2025 performance presents a mixed picture. The company shows robust growth in its customer base, which expanded by 8.6% to reach 155.4 million. We note particular strength in data and mobile money segments, with data customers increasing by 13.4% and mobile money subscribers growing by 14.9%. In constant currency terms, revenue grew impressively at 19.0%. However, we see that currency devaluations, especially of the Nigerian naira, significantly impacted reported figures. This led to a 16.1% decline in reported revenue to $1,156 million. EBITDA followed a similar pattern, growing in constant currency but falling in reported terms. We find the decline in EBITDA margin from 49.5% to 45.3% concerning. The profit after tax of $31 million was notably affected by exceptional forex losses. Overall, we believe Airtel Africa demonstrates strong underlying growth but faces considerable challenges from macroeconomic factors, particularly currency fluctuations.
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