Airtel Africa plc, a leading telecommunications company, has reported a significant foreign exchange loss of $471 million in the quarter ending on June 30, as revealed in its financial statement filed at the Nigerian exchange. The loss was primarily attributed to the unification of the exchange rate by the Central Bank, which resulted in a drastic shift in the exchange rate from N460/$ in June to N790/$.
Despite the foreign exchange loss, the company’s revenue showed growth, increasing by 9% during the same period to reach $1.37 billion compared to $1.25 billion recorded in the corresponding period in 2022. However, it’s worth noting that the financial results were prepared using an exchange rate of N502/$. Had the closing rate of N752/$ been applied, revenues would have experienced a 4.4% decline, totaling $1.20 billion.
The financial report also reflected a loss after tax of $151 million, marking a staggering 184.7% decrease in comparison to the profit after tax of $178 million achieved in the second quarter of 2022. The loss was primarily driven by foreign exchange and derivative losses amounting to $570 million, leading to a loss before tax of $221 million.
The earnings per share (EPS) for the period also took a hit, plunging to negative 4.5 cents, a 204% decrease from the 4.4 cents recorded in the same quarter of the previous year.
On the tax front, the company’s tax bill experienced a reduction from $119 million in the previous period to $84 million in the current financial statement, largely attributed to the devaluation of the Nigerian naira.
Despite the challenging macroeconomic environment, Airtel Group witnessed an 8.8% increase in its customer base, reaching 143.1 million users. Notably, its Nigerian subsidiary observed a 4.8% growth in customer base, with the average revenue per user (ARPU) increasing by 16%.
Key highlights from the financial report include the foreign exchange loss impacting profit after tax, leading to negative EPS, and the reduction in tax bills due to naira devaluation. Additionally, in July 2022, the Group prepaid $450 million of outstanding external debt at HoldCo, leaving $550 million due in May 2024. The cash balance at the holding companies stood at $505 million at the end of the period.
The company’s performance in the face of a challenging economic climate underscores its resilience, as it continues to navigate through the impact of currency fluctuations and external factors affecting the telecommunications industry.