On Thursday, Airtel Africa Plc reported losing $151m because of the harmonization of foreign exchange rates in Nigeria.
It disclosed this in its second quarter report filed with the Nigerian Exchange Limited.
The telecom company said, “Profit after tax was negative ($151m), driven largely by a foreign exchange loss of $471m recorded in finance cost before tax and $317m after tax, because of the devaluation of the Nigerian naira in June 2023. This impact has been classified as a non-operating exceptional item.”
In June, the Central Bank of Nigeria announced the unification of all segments of the Nigerian forex market.
The apex bank collapsed all windows into the Investors and Exporters window as part of the Federal Government’s effort to improve liquidity and stability in the market and attract foreign investors into the Nigerian economy.
In its latest financial report, Airtel said its revenue grew 9.6 percent to $1,377m from $1,257m as of June 2022.
Across the group, mobile service revenue grew by 19.1 percent in constant currency, driven by voice revenue growth of 11.9 percent and data revenue growth of 29.8 percent. Mobile money revenue grew by 31.2 percent in constant currency.
In the accompanying notes to the financial statement, Airtel’s Chief Executive Officer, Olusegun Ogunsanya, said, “The group delivered a strong operating performance with improvement in both constant currency revenue growth and EBITDA margin despite the challenging macro environment. The acceleration in voice, data, and mobile money revenue growth is a testament to the success of our six-pillar ‘win-with’ strategy.
“Our continuing investment in network and distribution enabled us to expand our customer base further, driving increased usage on our network. A continued focus on cost efficiencies, which enabled us to expand our EBITDA margins in the quarter supports this strong momentum. Despite the strong operating performance, our results have been impacted by foreign exchange headwinds.
“This quarter saw the announcement of the change to the FX market in Nigeria which resulted in a significant naira devaluation. We have welcomed this reform as very positive for the medium and long-term development of our business in Nigeria, our largest market. The country offers significant untapped growth potential, underpinned by beautiful fundamentals. This has supported and sustained a strong operating performance which has seen a five-year revenue and EBITDA CAGR of 23.5 percent and 27.3 percent in constant currency, respectively.”
He said the firm expected the FX reforms to improve liquidity over time, thereby easing the challenges faced by international businesses over the last few years associated with accessing dollars and thus hindering sped-up growth.
“However, in the reporting period, the devaluation has had a material impact on our results. Over the last few years, we have actively reduced our FX exposure across the group, and this will continue to be a focus area in the future to limit the impact of any future devaluation.
“Our focus remains on areas which we can control: the provision of reliable telecom and mobile money services, at affordable rates across our 14 sub-Saharan markets in Africa where demand for these services remains significant.”
