FX movements wipe $1bn off Airtel's top line
By Benjamin Chiou
Date: Thursday 09 May 2024
(Sharecast News) - Africa-focused telecoms group Airtel was hit hard by a drop in the Nigerian naira in the year to 31 March, with a $549m negative FX headwind pushing it into the red on a pre-tax basis and taking more than $1bn off the top line.
The company swung to a reported pre-tax loss of $89m, from a profit of $750m the year before, following the Nigerian naira devaluation in first and fourth quarters, as well as the Malawian kwacha devaluation in November 2023. Other FX movements worked against Airtel during the period, including the Zambian kwacha and the Kenyan shilling, partially offset by an appreciation in the Central African franc.
The naira in particular devalued significantly over the year 461 naira to the US dollar in March 2023 to 1,303 by March 2024.
Reported EBITDA fell 5.7% to $2.43bn, but would have increased by 21.3% if currencies had remained stable.
Reported revenues sunk 5.3% to $4.98bn as a result of a $1.04bn negative impact from the naira devaluation, but increased by 20.9% in constant currencies helped by a 9% increase in the customer bases and 10.7% higher average revenue per user.
Airtel said that, as the currency devaluation occurred at various stages during the year, revenues and EBITDA reported don't reflect the full-year impact. "As a result, the next financial-year reported currency results will continue to reflect the currency headwinds experienced during FY24," it said.
"If the closing rate of 1,303 NGN/USD were to be used to consolidate the results of the group for the year ended 31 March 2024, reported revenue would have declined further by $603m to $4,376m (16.7% yoy decline) [...]. Similarly, EBITDA would have declined further by $324m to $2,104m (18.3% yoy decline)."
The board recommended a final dividend of 3.57 cents per share, making the total dividend for the year 5.95 cents per share.
"The growth opportunity that exists across our markets remains compelling, and we are well positioned to deliver against this opportunity. We will continue to focus on margin improvement from the recent level as we progress through the year," said chief executive Olusegun Ogunsanya.
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