Airtel Africa reports solid Q3, launches second $100m buyback
By Josh White
Date: Thursday 30 Jan 2025
(Sharecast News) - Airtel Africa reported a strong operating performance for the nine months ended 31 December, with revenue growth of 20.4% in constant currency, although reported revenue was down 5.8% due to currency devaluations, as it launched a second $100m share buyback.
The FTSE 100 company said that in the third quarter, revenue growth accelerated to 21.3% in constant currency, while reported currency revenue increased by 2.5%.
Mobile services revenue grew 18.8% in constant currency, supported by a 9.8% increase in voice revenue and a 29.5% rise in data revenue.
Mobile money revenue continued to expand, increasing by 29.6% in constant currency.
Despite the growth, EBITDA fell by 11.9% in reported currency to $1.68bn, with margins impacted by higher fuel costs and the reduced contribution of Nigeria to the group.
However, efficiency measures led to an improvement in EBITDA margins from 45.3% in the first quarter to 46.9% in the third quarter.
Profit after tax for the third quarter benefitted from a $94m exceptional gain due to currency appreciation, but for the nine-month period, profit stood at $248m, reflecting $57m in derivative and foreign exchange losses.
Earnings per share before exceptional items declined to 6.2 cents from 7.1 cents, mainly due to costs related to the ATC contract renewal.
The company's total customer base grew by 7.9% to 163.1 million, with data customers increasing by 13.8% to 71.4 million.
Smartphone penetration rose to 44.2%, and data usage per customer increased by 32.3%.
Mobile money subscribers expanded by 18.3% to 44.3 million, with annualised transaction value reaching $146 billion.
Capital expenditure declined by 7.8% to $456m, with full-year guidance unchanged at between $725m and $750m.
Airtel Africa said it continued its strategy of reducing foreign currency debt, paying down $739 million over the past year.
Local currency now accounted for 92% of OpCo debt, up from 79% a year ago.
Lease-adjusted leverage rose from 0.7x to 1.1x due to higher debt and currency devaluation impacts.
The company recently completed its first $100m share buyback, and was launching a second buyback programme of up to $100m.
Its board cited continued growth potential, balance sheet strength, and consistent cash accretion as the rationale for returning capital to shareholders.
"We have delivered an improvement in both the operating and financial performance in the last quarter driven by our refined strategy which is focussed on delivering great customer experience across all touch points," saud chief executive officer Sunil Taldar.
"An increasingly important component of this is to provide a best-in-class network, digitise and simplify the customer journey.
"Our focus on speed and quality execution is enabling us to unlock the substantial opportunities for growth across our markets and business segments, where demand remains significant, resulting in a further acceleration of constant currency revenue growth to 21.3% in the most recent quarter."
Taldar said the company was committed to investing for the future by expanding its distribution and network to ensure that it could capture this "significant growth opportunity" on offer.
"Despite the challenging environment for many of our customers, we continue to see strong demand for our services as we enable connectivity and facilitate access to the digital economy.
"The scale of data traffic growth across our markets - an increase of 49% over the last year - is testament to the investments we have made and the relentless focus on our strategy to create value for all our stakeholders.
"As we have communicated previously, our cost efficiency programme continues to deliver EBITDA margin improvements, with a further expansion of margins in the third quarter."
Airtel continued to focus on further margin improvement, Sunil Taldar said, adding that its capital structure remained robust with 8% of OpCo debt in foreign currency - a substantial improvement over the last year.
"This, together with continued confidence in the outlook for the business, has enabled the board to announce a second share buyback programme, which will return up to $100m to shareholders.
"The recent signs of currency stabilisation in some markets and the recent decision from the Nigerian Communications Commission (NCC) regarding tariff adjustments in Nigeria are encouraging and signal a more stable and supportive operating environment.
"While challenges remain, these developments provide a firm foundation for growth and improved market conditions."
At 0842 GMT, shares in Airtel Africa were up 8.8% at 144.7p.
Reporting by Josh White for Sharecast.com.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN