Airtel Africa posts $248m profit in nine-month turnaround

AFRICA:  Airtel Africa has recorded a significant financial turnaround, posting a profit after tax of USD 248 million for the nine-month period ending December 31, 2024.

This marks a sharp recovery from the meagre 2 million usd profit recorded in the same period last year, demonstrating strong operating momentum despite economic headwinds.

The company’s total revenue declined by 5.8 per cent to usd 3.63 billion in reported currency, largely due to the depreciation of the Nigerian naira, Malawian kwacha, and Zambian kwacha.

However, in constant currency terms, revenue actually grew by 20.4 per cent reflecting strong business fundamentals despite currency volatility.

Strong growth in mobile money and data services

Airtel Africa’s customer base grew by 7.9 per cent to reach 163.1 million, driven by rising demand for mobile money and data services.

Data customers increased by 13.8 per cent to 71.4 million, with data usage per customer surging by 32.3 per cent to 6.9GBs.

Smartphone penetration also rose by 5.2% to 44.2 per cent, supporting increased data consumption.

Mobile money services continued to expand, with subscribers increasing by 18.3 per cent to 44.3 million.

The value of transactions in Q3’25 grew by 33.3 per cent in constant currency, bringing the annualized transaction value to $146 billion.

Mobile money now accounts for 29.6 per cent of total revenue, slightly surpassing data’s contribution of 29.5 per cent.

Revenue growth accelerates in Q3’25

Despite overall revenue pressure, Airtel Africa’s Q3’25 performance showed strong acceleration, with revenue growth of 21.3 per cent in constant currency and 2.5 per cent in reported currency.

Mobile services revenue increased by 18.8 per cent in constant currency, with voice revenue up 9.8 per cent and data revenue surging by 29.5 per cent.

To support this growth, Airtel Africa continued investing in network expansion, increasing data capacity by 20.8 per cent through the rollout of 2,850 sites and 2,600 km of fibre.

Cost pressures and strategic adjustments

Despite positive topline trends, EBITDA declined by 11.9 per cent to $1.681 billion,

with EBITDA margins falling to 46.2 per cent due to rising fuel prices and increased operational costs.

However, the company mitigated some financial risks by reducing its foreign currency debt exposure, shifting 92 per cent of its debt to local currency, and paying off $739 million in foreign debt over the past year.

Investor confidence is expected to be bolstered by the Nigerian Communications Commission’s approval of a 50 per cent tariff increase, which could provide additional revenue streams.

Additionally, Airtel Africa has launched a second share buyback programme, signaling confidence in its financial outlook.

Airtel Africa’s CEO, Sunil Taldar, who succeeded Olusegun Ogunsanya in June 2024, expressed optimism about the company’s future.

“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,” he said.

“The recent signs of currency stabilization in some markets and the NCC’s tariff adjustments in Nigeria are encouraging, providing a firm foundation for growth and improved market conditions.”

Airtel Nigeria, the company’s largest subsidiary, successfully complied with NCC’s directive on SIM registration verification, with negligible revenue impact.

The unit anticipates that the tariff increase will further support network investments and service enhancements.

With a strong operational performance and strategic financial adjustments, Airtel Africa is positioning itself for sustained growth in the coming years.