Bharti Airtel’s Africa business saw a significant improvement in its financial performance in the first quarter of FY25, with a net profit of $31 million compared to a net loss of $151 million in the same period last year. This positive result was driven by a substantial reduction in net finance costs. However, the company experienced a decline in revenue, mainly due to currency devaluation in Nigeria.
Despite the revenue decline of 16% year-on-year to $1.15 billion, Airtel Africa managed to achieve a 3.4% sequential increase in revenue. This growth was supported by higher average revenue per user (ARPU) and the strong performance of the mobile money business. The company’s net finance costs for the quarter were significantly lower compared to the previous year, primarily due to reduced derivative and foreign exchange losses.
Airtel Africa attributed the impact of currency devaluations in key markets such as Nigeria, Malawi, Zambia, and Tanzania to the decline in reported currency revenue growth. The devaluation of the naira from NGN/US$ 503 to NGN/US$ 1,384 had a significant impact on the company’s financial results.
Despite the challenges posed by currency devaluation, Airtel Africa remains optimistic about its cost optimization initiatives. The company has already seen savings in network and distribution costs and expects further opportunities as contract renegotiations progress. Airtel Africa also highlighted its efforts to reduce foreign currency exposure to mitigate the impact of currency devaluation on its business.
Furthermore, Airtel Africa successfully repaid its outstanding debt at the HoldCo during the June quarter, eliminating its HoldCo debt. The company has been proactive in reducing its foreign currency debt, with 86% of its market debt now in local currency. Additionally, Airtel Africa’s ongoing share buyback program and focus on operational performance have contributed to its financial stability.
Looking ahead, Airtel Africa remains focused on driving sustainable growth and expanding its mobile money services. The company saw a sequential increase in its mobile money customer base and revenue in the first quarter of FY25. Despite challenges such as rising fuel prices and the lower contribution from Nigeria, Airtel Africa is committed to investing in future growth, with a capex guidance of $725 million to $750 million for the full year.
In conclusion, Airtel Africa’s improved financial performance in the first quarter of FY25 demonstrates its resilience in the face of economic challenges. The company’s strategic initiatives, cost optimization efforts, and focus on mobile money services position it well for future growth and success in the African market.
