Airtel Records $471M Foreign Exchange Loss

In Q1 June 30, Airtel Africa report a $471 million foreign exchange loss.

This information was disclosed in Airtel's financial statement filed with the Nigerian exchange.

The primary reason behind this loss was the Central Bank's unification of the exchange rate, which led to the exchange rate shifting from N460/$ in June to N790/$.

On a positive note, the company's revenue witnessed a 9% increase during the same period, reaching $1.37 billion from the previous $1.25 billion recorded in the corresponding period of 2022.

However, it's worth noting that the company used an exchange rate of N502/$ to prepare its financial results. Had they used the closing rate of N752/$, the revenues would have declined to $1.20 billion, representing a 4.4% decrease.

Profits and Earnings per share (EPS) also experienced a significant impact. Airtel Africa plc incurred a loss after tax of $151 million during the period under review, marking a substantial 184.7% decrease compared to the $178 million profit after tax in the same period of 2022.

This loss was largely influenced by the $570 million incurred in foreign exchange and derivative losses, contributing to a loss before tax of $221 million.

Earnings per share (EPS) for the period declined to negative 4.5 cents, representing a 204% decrease from the 4.4 cents recorded in the same quarter of 2022.

The company's tax bill saw a reduction due to the naira devaluation, decreasing from $119 million in the previous period to $84 million in the current financial statement.

Despite facing a challenging macroeconomic environment, Airtel Group managed to witness an 8.8% increase in its customer base, reaching 143.1 million users. The customer base for its Nigerian subsidiary also grew by 4.8%, aided by a 16% increase in the average revenue per user (ARPU).

Key highlights from the report include the negative profit after tax of ($151m), primarily driven by a $471m foreign exchange loss recorded in finance cost before tax and $317m after tax due to the devaluation of the Nigerian naira in June 2023.

Additionally, the Basic EPS was negative (-4.5 cents) compared to 4.4 cents in the prior period, affected by a $317m net exceptional loss due to the naira devaluation in June 2023.

In July 2022, the Group prepaid $450m of outstanding external debt at HoldCo, leaving $550m in remaining debt due in May 2024. The cash at the holding companies amounted to $505m at the end of the period.