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Airtel Africa swings to loss as revenue falls on currency devaluation

9th May 2024 10:02

(Alliance News) - Airtel Africa PLC on Thursday reported a decline in revenue, on a foreign exchange hit, though the Africa-focused telecommunications firm said it has recently "reduced the risks" from currency devaluation.

The stock traded 5.9% lower at 109.10 pence each in London on Thursday morning.

In the year ended March 31, revenue declined 5.3% to USD4.98 billion from USD5.26 billion the year prior. Airtel swung to a pretax loss of USD63 million from profit of USD1.03 billion.

Earnings before interest, tax, depreciation and amortisation fell 5.7% to USD2.43 billion from USD2.58 billion.

"During the period, the Nigerian naira devalued significantly from 461 per US dollar in March 2023 to 1,303 per US dollar in March 2024," Airtel said.

It added that the naira devaluation meant it suffered a USD1.04 billion hit to revenue, and a USD554 million hit to its Ebitda.

Airtel noted revenue surged 21% at constant currency.

"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," Chief Executive Officer Olusegun Ogunsanya said.

"Furthermore, our rigorous approach to de-risking our balance sheet and our capital allocation priorities has materially reduced the risks that the currency devaluation has had on our business. Key initiatives include the reduction of US dollar debt across the business and the accumulation of cash at the [holding company] level to fully cover the outstanding debt due. We will continue to focus on reducing our exposure to currency volatility. At the beginning of March, we launched our first buyback programme reflecting the strength of our financial position."

Airtel declared a 3.57 cents final dividend, a rise of 9.2% on-year from 3.27 cents. Its total dividend amounted to 5.95 cents, also up 9.2%, from 5.45 cents.

The CEO added: "The growth opportunity that exists across our markets remains compelling, and we are well positioned to deliver against this opportunity. We will continue to focus on margin improvement from the recent level as we progress through the year."

By Eric Cunha, Alliance News news editor

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