Airtel Africa loses $ 1.7b to FX crisis in Nigeria, Malawi

FINANCIAL setbacks in key markets including Nigeria, Malawi have resulted in Airtel Africa’s loss of $ 1.7 billion for the ending on March 31, 2024. The loss came despite a 20.9 per cent growth in service revenues in constant currency. Airtel, in the financial statement, released yesterday , noted that it witnessed a decline in group revenue by 5.3 per cent to $ 4,979 million, and a 5.7 per cent drop in EBITDA to $ 2,428 million.

These figures primarily reflected the severe impact of the Nigerian Naira and Malawian Kwacha’s devaluation against the dollar. In the report, Airtel said the Nigerian Naira devalued drastically from 461 to 1,303 per U. S dollar during the year, which deeply affected its financial outcomes. The devaluation led to a loss of $ 1.042 billion in reported revenue and a $ 554 million decrease in EBITDA for the company. With operations in Nigeria and 13 other African countries, noted that finance costs soared to $ 1.7 billion, significantly influenced by $ 1.26 billion in losses from derivatives and foreign exchange revaluations, of which $ 770 million was due to the naira’s devaluation. Airtel Africa Chief Executive Officer, Segun Ogunsanya, highlighted the effectiveness of the company’s strategic approach in mitigating the adverse effects of currency fluctuations and driving revenue growth. “The consistent deployment of our ‘ Win with’ strategy supported the acceleration in constant currency revenue growth over the recent quarters which have reduced the impact of currency headwinds faced across most of our markets.

“This strong revenue performance is a reflection not only of the opportunity that is inherent across our markets but also the resilience of our affordable offerings despite the inflationary pressure many of our customers have experienced,” he said.

Further elaborating on the company’s operational focus, the CEO noted the critical role of investments in distribution and technology in facilitating growth, alongside a strategic emphasis on financial prudence.

“Facilitating this growth has been, and will remain, fundamental to our performance. The investment in our distribution to catalyse growth, and the technology required to support this growth has been key,” he explained.

On the NIN- SIM linkage directive in Nigeria, Airtel said it has complied with the directives issued and barred all customers without NINS as well as customers with more than four active SIMS which had a very negligible impact on revenue.

The telco said it is currently engaging with approximately 5.7 million customers, whose NINS are yet to be verified. It revealed that since the directive was issued in December 2023, 7.9 million customers have already been verified.