Airtel Africa eyes $100m share buy-back amid currency devaluation headwinds

Joy Agwunobi

Airtel Africa has announced a share buyback worth up to $100 million as part of its plans to return value to shareholders. This follows the company’s strong performance in the results for the nine months ending December 31, 2023.

Despite strong underlying growth, Airtel Africa’s revenue in naira was negatively impacted by the devaluation of the Nigerian currency. Revenues at constant currency grew by 21 per cent year-on-year in the three months to December 31, 2023. 

Airtel Africa’s reported financial results for the first three quarters of the financial year show that revenues grew by 20.2 per cent on a constant-currency basis to $3.86 billion. However, when taking into account currency movements, the figure was down 1.4 per cent compared to the previous year.

Further breakdown of the company’s financials in the period under review indicated that earnings per share (EPS) declined by 34.6 per cent to 7.1 cents before exceptional items, primarily due to a $140 million derivative and FX loss net of tax. This loss was due to the weakening of the naira, which impacted the company’s financial performance. On the other hand, the company’s capital expenditure increased by 8.2 per cent to $494 million, reflecting the company’s continued investment in its network and digital platforms.

Meanwhile, Airtel Nigeria’s recent data shows that the company’s subscriber base grew to 60.2 million, representing a significant increase in mobile penetration.  Also, the number of data customers increased by 22.4 per cent to 62.7 million, while the number of mobile money customers increased by 19.5 per cent to 37.5 million. 

Commenting on the company’s performance, Olusegun Ogunsanya, outgoing group chief executive officer of Airtel Africa, said that the company remains focused on executing its growth strategy and delivering value to its customers. He noted that despite the inflationary and currency headwinds facing the business, the company has continued to see positive growth momentum across all its markets. 

Ogunsanya further emphasised the resilience of Airtel Africa’s customer base and the critical role its services play in the region. He noted that the company’s voice, data, and mobile money services continue to be in high demand, resulting in strong growth in revenue at a constant currency rate of 20.2 per cent over the period.

According to the  Airtel CEO, the company’s operating performance has been strong enough to offset the impact of currency movements on the company. He also expressed confidence that while further devaluation of the naira, in particular, has impacted the company’s reported financial results, it will not affect the execution of its growth strategy. 

Speaking further, he said, “I am pleased to note that our sustained focus on capital allocation priorities will enable us to fully repay HoldCo debt when due in May 2024, ensuring the continued success of our balance sheet de-risking strategy. 

This will allow us to continue investing in our strategic priorities to provide affordable and reliable services to customers across our markets, whilst also enabling us to capitalise on new business opportunities, such as our new data centre business, Nxtra by Airtel, which we launched in December.”

In light of Airtel Africa’s consistent and robust operating performance, the board has announced its intention to launch a share buy-back programme of up to $100 million, beginning in early March 2024. The programme will run for 12 months, with the aim of returning value to shareholders.