Airtel Africa rides lower finance costs to $31m Q1 profit

Joy Agwunobi 

Airtel Africa reported a significant improvement in its net profit for the first quarter 2025 fiscal year, achieving a $31 million profit-after-tax, compared to a $151 million net loss in the same period the previous year. The turnaround was mainly driven by a significant decrease in finance costs, which dipped by 34 percent year-over-year and 2.11 percent quarter-on-quarter.

Though the telecom giant’s revenue declined 16 percent year-on-year to $1.15 billion, mainly due to currency devaluation, particularly in Nigeria, it explained that the decline was offset somewhat by an increase in average revenue per user (ARPU) and the strong growth momentum of the mobile money business, leading to a revenue growth of around 3.4 percent.

Airtel Africa, which operates in 14 African countries,stated further that its net profit after tax of $31 million for the June quarter was impacted by $80 million in exceptional derivative and foreign exchange (forex) losses (net of tax) and lower EBITDA due to currency devaluation across key markets. Despite the reported revenue decline, Mobile Services and Mobile Money revenue grew significantly in constant currency, indicating solid customer demand across the group.

According to the financials, the firm’s Q1 2024 revenue, measured in constant currency, grew by 19.0 percent, primarily driven by robust performance in Nigeria (33.4% growth) and East Africa (22.3% growth).

During the period in review, Airtel Africa Plc exhibited outstanding financial results, primarily due to the rapid growth in two key revenue streams – data services and mobile money. This is as the company reported a 9.6 percent growth in Data ARPU in constant currency and a solid 8.8 percent increase in Mobile Money ARPU (also in constant currency). These gains, in conjunction, led to a 9.3 percent increase in overall ARPU when compared to the same period last year.

Airtel Africa Plc continued to register strong customer growth, with its total customer base increasing by 8.6 percent to 155.4 million during Q1 2024. This was primarily driven by investments in data infrastructure and services, resulting in a 33 percent increase in data capacity across the network.

To support this growth, the company rolled out an impressive number of almost 3,000 new sites, as well as 5,600 km of fibre cables,expanding its reach and coverage across the region.

The financials further indicated that data consumption per customer surged 25.1 percent to 6.2 GBs, signaling an increasing reliance on mobile data services. Smartphone penetration also saw notable growth, climbing 4.7 percent to reach 41.7 percent of the company’s total customer base, which has likely contributed to the higher demand for data.

In addition, mobile money subscriber numbers rose 14.9 percent, attributed to Airtel’s continued investments in distribution networks to support financial inclusion.

Sunil Taldar, the CEO of Airtel Africa, highlighted the company’s impressive trading update in Q1 2024, attributing the strong revenue growth to the resilient demand for Airtel’s services. He emphasized that the expansion of the customer base and the increase in usage were the key drivers behind this growth.

Taldar praised Airtel’s outstanding execution, which enabled the company to capitalize on opportunities in the market while maintaining a reputation as an industry leader in cost efficiency. He expressed confidence in Airtel’s ability to continue delivering value to its customers and stakeholders.

Taldar underscored the importance of seeking new avenues for growth, particularly in the enterprise, fibre, and data centre sectors in Africa. Recognizing the significance of customer experience, Taldar highlighted Airtel’s dedication to simplifying customer journeys and providing an unparalleled network experience, while remaining focused on driving efficiencies throughout the business.

The Airtel Africa chief added, “A strong capital structure is critical to enabling these ambitions and future proofing our ambitious growth targets. During the quarter, we fully repaid the outstanding debt due at the HoldCo and we remain committed to further reduce foreign currency exposure across the Group to limit the impact of currency devaluation on our business. The growth opportunity across our markets remains compelling and we continue to focus on margin improvement as indicated in our FY’24 results.”