Airtel Africa Reports Revenue Decline Due to Nigeria’s Currency Plunge
Airtel Africa’s half-year results for the period ending September 30, 2024, reveal a significant decline in revenue, primarily attributed to the drastic depreciation of the Nigerian naira. Despite a 19.9% increase in revenue in constant currency, the reported revenue took a hit, declining 9.7% due to the unfavorable impact of the weakened naira on the company’s earnings.
The Central Bank of Nigeria’s (CBN) 2023 decision to unify the foreign exchange rate led to a steep fall in the naira’s value, dropping from ₦471/$ to ₦1,601.20 by October 2024. This dramatic drop had a ripple effect on Airtel Africa’s financial performance.
The company’s EBITDA margins suffered, declining from 49.6% in H1 2024 to 45.8% due to a combination of factors, including escalating fuel prices in its operational regions and reduced revenue contribution from Nigeria following the devaluation.
Airtel Africa’s profit after tax stood at $79 million, significantly impacted by $151 million in derivative and foreign exchange losses (net of tax), largely attributed to the further depreciation of the naira.
Despite the challenging market conditions, Airtel Africa’s customer base continued to grow, expanding by 6.1% to 156.6 million, with data consumption per customer surging by 30.9% to 6.6 GB. The company also saw a 5.3% increase in smartphone penetration, reaching a level of 42.9%.
CEO Sunil Taldar emphasizes the growth potential in Sub-Saharan Africa, stating, “A young and fast-growing population, combined with low SIM and banking penetration, and a rising adoption of smartphones and digital payments, presents a unique opportunity to leverage our extensive infrastructure for sustainable growth.”
