Foreign exchange devaluation impacts Airtel Africa’s $151m loss in Q1 2023

Airtel Africa has reported a loss in their first quarter result for 2023. Airtel’s CEO cites the currency devaluation from Nigeria as a core reason.

According to a financial statement published on the Nigerian Exchange Group (NGX), Airtel Africa has reported a loss for its Q1 result in 2023—April 1 to June 30, 2023. Airtel reported a loss after tax for the period under review of $151 million, compared to a profit after tax of $178 million during the same period in 2022. Conversely, the telco’s revenue grew by 9.6% to $1.37 billion in Q1 2023, compared to $1.25 billion in the same period in 2022.

Commenting on the financial performance, Airtel Africa’s CEO, Olusegun Ogunsanya, stated that the group delivered a strong operating performance with improvement in both constant currency revenue growth and EBITDA margin despite the challenging macro environment. The telco saw an improvement in voice, data, and mobile money but its results were 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 highly attractive fundamentals. This has supported and sustained a strong operating performance which has seen a five-year revenue and EBITDA CAGR of 23.5% and 27.3% in constant currency, respectively,” Ogunsanya said.

Ogunsanya explained that even though the company expected the FX reforms to improve liquidity over time, the devaluation has had a material impact on Airtel’s results. He said the telco has, over the last few years, actively reduced their 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. Despite these headwinds, Airtel Africa revealed it will continue to invest in Nigeria to enable it to capture the growth opportunity. “This continued investment will facilitate growth, drive continued digitalisation across the country, facilitate economic progress and transform lives across Nigeria,” the report read.

The telco’s financial statement also reported that its mobile services revenue grew by 19.1% in constant currency, driven by voice revenue growth of 11.9% and data revenue growth of 29.8%. Mobile money revenue grew by 31.2% in constant currency. Similarly, its total customer base grew by 8.8% to 143.1 million, as the penetration of mobile data and mobile money services continued to rise, driving a 22.0% increase in data customers to 56.8 million and a 24.3% increase in mobile money customers to 34.3 million.