Airtel Africa plc’s financial statement filed at the Nigerian exchange shows the company incurred a foreign exchange loss of $471 million in the quarter ending on June 30. The loss was attributed to the unification of the exchange rate by the Central Bank, which resulted in the exchange rate shifting from N460/$ in June to N790/$.
Despite the foreign exchange loss, Airtel Africa plc’s revenue saw a positive growth of 9% during the same period. The company’s revenue increased to $1.37 billion compared to the $1.25 billion it had recorded in the corresponding period of 2022.
However, the company clarified that it used an exchange rate of N502/$ to prepare its financial results. If the closing rate of N752/$ were applied instead, the revenues would have declined to $1.20 billion, representing a 4.4% decrease.
Analysis of profits and earnings per share
During the period under review, Airtel Africa plc reported a significant loss after tax of $151 million, reflecting a substantial decrease of 184.7% compared to the profit after tax of $178 million achieved in the same period of 2022.
The loss was primarily driven by the $570 million incurred in foreign exchange and derivative losses, leading to a loss before tax of $221 million.
Furthermore, the earnings per share for the period declined to a negative 4.5 cents, marking a considerable decrease of 204% from the 4.4 cents recorded in the corresponding quarter of 2022.
Naira devaluation decreased the company’s tax legislation
Due to the naira devaluation, the company experienced a decrease in its tax bill, which reduced from $119 million in the previous period to $84 million in the current financial statement.
Despite the challenging macroeconomic environment, Airtel Group witnessed a notable growth in its customer base, with an 8.8% increase, reaching a total of 143.1 million users. Additionally, the Nigerian subsidiary of the company also experienced growth, with its customer base expanding by 4.8%. This growth was supported by a 16% increase in the average revenue per user.
Notable Points from the Report
The company’s Profit after tax for the period was negative, amounting to ($151 million), primarily due to a substantial foreign exchange loss of $471 million recorded in finance costs before tax and $317 million after tax. This loss resulted from the devaluation of the Nigerian naira in June 2023.
The Basic EPS also reflected a negative value of (4.5 cents), in contrast to 4.4 cents in the previous period, mainly influenced by a net exceptional loss of $317 million attributed to the devaluation of the Nigerian naira in June 2023.
In July 2022, the Group proactively prepaid $450 million of outstanding external debt at HoldCo, which reduced the remaining debt at HoldCo to $550 million, set to mature in May 2024. At the end of the period, the holding companies held $505 million in cash.
What to note about Airtel Africa
Airtel Africa is a telecommunications and mobile money service company that operates in 14 countries across West, South, Central, and East Africa.
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