Airtel Africa Posts Profit In Q1 Amid Finance Cost Reductions
The telecom company's operating profit fell 27% to $335 million in the first quarter.
Airtel Africa Plc reported a profit in the first quarter of fiscal 2025. Its net profit stood at $31 million, compared to a loss of $151 million in the same period last year.
The loss last year was due to a sharp fall in finance costs, but quarterly revenues fell year-on-year, stung by currency devaluation in Nigeria.
The telecom company's operating profit fell 27% to $335 million in the first quarter.
Its revenue also dipped 16% year-on-year to $1,156 million during the quarter. In constant currency terms, it grew 19% to $1,172 million during the period.
Overall, average revenue per user rose 9.3% year over year. This growth was on the back of data ARPU growth of 9.6% and mobile money ARPU increase of 8.8% in constant currency.
Financial Performance
A substantial increase in fuel prices across the company's markets and the lower contribution of Nigeria to the group after the naira devaluation contributed to a decline in Ebitda margins to 45.3% in the first quarter of fiscal 2025 from 49.5% in the same period last year, the company said in a statement. However, constant currency Ebitda increased 11.3%, while reported currency Ebitda declined by 23.3% to $523 million.
Profit after tax of $31 million was impacted by $80-million of exceptional derivative and foreign exchange loss (net of tax), arising from further depreciation in the Nigerian naira during the quarter, it said.
The translation impact of currency devaluation on reported currency results was the primary driver of EPS before exceptional items declined from 3.9 cents in the prior period to 2.3 cents, the statement said.
Basic EPS of 0.2 cents compared to negative 4.5 cents in the prior period, predominantly reflecting $471 million of exceptional derivative and foreign exchange loss in the prior period, compared to $122 million in the current period.
Operating Highlights
Total customer base grew by 8.6% to 155.4 million.
Mobile money subscriber growth of 14.9%.
Data capacity across our network has increased by 33% with the rollout of almost 3,000 sites and over 5,600 kms of fibre.
Capital Allocation
Capex at $147 million was 4.9% higher compared to the prior period. Capex guidance for the full year remained between $725 million and $750 million as the company continues to invest for future growth, it said.
The leverage of the company stood at 1.6 times as of June 30, 2024, compared to 1.3 times in the same period last year. Of the 0.3 times increase, 0.2 times was due to the decrease in reported currency Ebita, with the balance due to an increase in lease liabilities.
The $100-million share buyback continues, with 21 million shares purchased for a consideration of $29 million as of June 30, 2024, the company said.
The company has zero holding company debt following the full repayment of the $550 million bond in May 2024, which is in line with its plans, it said.
This bond repayment was made exclusively out of the cash reserves at the holding company and is a continuation of the company's strategy to reduce external foreign currency debt, it said.
At the time of the IPO in June 2019, the group had $2,719 million of external debt at the holding company, which resulted in significant exposure to currency fluctuations and the reliance on upstream funds to cover both interest costs and the principal repayment.
Bharti Airtel Ltd. stock declined 0.37% to Rs 1,449.75 apiece, as compared with a 0.14% decline in the benchmark BSE Sensex on Thursday.
