Airtel Africa, Nigeria’s second-largest telecommunications company, has reported a substantial loss of $1.7 billion attributed to currency devaluations in Nigeria and Malawi for the fiscal year 2024. Despite witnessing a commendable 20.9% growth in service revenues when measured in constant currency, the company faced a 5.3% decline in group revenue and a 5.7% drop in EBITDA due to currency fluctuations.
The Nigerian Naira and Malawian Kwacha experienced significant devaluations against the US dollar during the fiscal year, adversely impacting Airtel’s financial performance. The Nigerian Naira plummeted from 461 to 1,303 per US dollar, resulting in substantial losses for the company.
Finance costs surged to $1,703 million, primarily driven by $1,259 million in losses from derivatives and foreign exchange revaluations, with $770 million attributed to the Naira’s devaluation.
CEO of Airtel, Olusegun Ogunsanya, emphasized the company’s strategic approach in mitigating the adverse effects of currency fluctuations while driving revenue growth. He highlighted investments in distribution and technology as key drivers of growth, alongside efforts to minimize risks associated with currency devaluation.
Operational highlights revealed strong performance in mobile services and mobile money segments, with mobile services revenue growing by 19.4% and mobile money revenue rising by 32.8% in constant currency. Despite currency and inflationary challenges, Airtel maintained a reported EBITDA margin of 48.8%, indicating operational resilience.
However, Airtel’s fiscal year 2024 results in Nigeria depicted a stark contrast between operational success and currency challenges. While the company reported robust revenue growth in constant currency terms, the depreciation of the Nigerian Naira led to a 29.4% decline in reported revenues.
Despite these challenges, Airtel Nigeria demonstrated strong operational performance, with revenue growth supported by an expanded customer base and increased Average Revenue Per User (ARPU) in both voice and data segments.
Looking ahead, Airtel anticipates ongoing currency volatility to continue impacting its financial results, emphasizing the need for prudent financial management and strategic initiatives to navigate currency risks effectively.
