Airtel Africa Q2FY25 results: Net profit declines 80% to $24 million

Continuing devaluation of African currencies and higher finance costs remain drags

Weighed down by the continuing devaluation of African currencies, telecom provider Airtel Africa announced a $24 million net profit in the second quarter (July-September) of FY25 on Friday. Attributable to the owners of the company, this compares to a net profit of $115 million in the same quarter of the previous year.

 

Continuing to be impacted by ongoing currency devaluation, the company reported a 2.6 per cent fall in revenue to $1.21 billion, down from $1.24 billion in Q2FY24. However, the revenue decline was less than the 16.1 per cent fall recorded in Q1. Revenue growth was particularly affected by significant currency devaluation in Nigeria.

 

 

Earnings before interest, taxes, depreciation, and amortisation (Ebitda) was recorded at $564 million, 9.1 per cent lower than $620 million in the same quarter of the previous year.

 

Profit was impacted by $71 million of exceptional derivative and foreign exchange losses (net of tax) arising from further depreciation in the Nigerian naira in Q1, the company said. The figure was $80 million in the preceding quarter.

 

“A substantial increase in fuel prices across our markets and the lower contribution of Nigeria to the group after the naira devaluation contributed to a decline in Ebitda margins to 45.8 per cent from 49.6 per cent in the first half of '24,” it said.

 

The total customer base in the latest quarter expanded by 6.1 per cent to 156.6 million, as mobile data and mobile money service penetration continued to climb. The quarter saw a 10.4 per cent increase in data customers to 66 million and a 13.4 per cent rise in mobile money customers to 41.5 million.

 

"We have already seen strong progress, with an acceleration in constant currency revenue growth over the last quarter as demand for our services remains strong, reflected in the 48 per cent growth in data volumes over the first half of the year, despite the challenging backdrop in some of our markets. Foreign currency debt has fallen to just 11 per cent of market debt at the end of September, which reflects the work we have undertaken to de-risk the balance sheet," Airtel Africa CEO Sunil Taldar said. Taldar took over as CEO on July 1 after the retirement of long-time CEO Olusegun Ogunsanya.

 

The company has previously stated it has been actively reducing its forex exposure across the group over the past few years and will continue to focus on this area to mitigate the impact of any potential future devaluation. Airtel Africa has paid down its foreign currency debt exposure by $809 million.

 

Meanwhile, its capex guidance for the full year remains at $725 million-750 million.