AIRTELAFRI: Lower FX loss bolstered earnings

Airtel Africa plc (AIRTELAFRI "" TP: N3,209.08) reported a 124.0x jump in its PAT to $248.00 million for the nine-month period that ended in December 2024. This earnings improvement came about as a result of a more stable FX profile across its Operating companies (OpCo) as it meant that the FX losses which dragged earnings in the prior period did not reoccur. The ongoing strategy of increasingly localising debt to clear up FCY borrowings at the OpCo levels also supported the company's earnings profile. 

On the revenue front, AIRTELAFRI's underlying performance remained resilient in constant currency, supported by sustained growth in both voice (+9.8% YoY) and data (+29.5% YoY) across its regional markets. However, the material depreciation of local currencies weighed on topline performance in reporting currency, leading to a 5.8% YoY decline in group revenue to $3.64 billion. Notably, revenue in Nigeria plummeted by 40.3% YoY, overshadowing the robust expansion in East Africa (+11.4% YoY) and Francophone Africa (+6.1% YoY). 

Operationally, Airtel Africa Plc reported a strong growth momentum, expanding its total customer base by 7.9% YoY to 163.1 million, with data subscribers growing even faster at +13.8% YoY to 71.4 million. Data consumption per user surged by 32.3% YoY, reaching 6.9GB per month (vs. 5.2GB a year ago), underscoring sustained demand for mobile data. Meanwhile, Airtel Africa's mobile money segment remained a bright spot, with active subscribers rising by 18.3% YoY to 44.3 million and transaction value soaring to $146.00 billion (+25.9% YoY).  

On the balance sheet restructuring, the company continued to improve its debt structure and now has an increased proportion of local currency debt (OpCo debt) on its balance sheet (92% as of 31 December 2024 from 79% a year ago). In total, they paid down $739.00m of US dollar debt over the last year. Consequently, the group's effective interest rate increased to 13.2% compared to 9.3% in the prior period, largely driven by higher interest rate on local currency debt.

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