Airtel Africa plans $100 million share buyback as FX crises weigh on results

• Revenues down by 8.3% on naira depreciation

Airtel Africa has revealed plans to launch a share buyback worth up to $100 million after posting a strong underlying performance in the results for nine months ending December 31, 2023.

While currency movements weighed heavily on growth, the firm disclosed that revenues at constant currency were up 21 per cent year-on-year in the three months to December 31, but fell by 8.3 per cent due to the devaluation of naira.

In the result released yesterday, for the first three quarters of the financial year combined, constant-currency revenues grew 20.2 per cent to $3.86 billion but were down 1.4 per cent on a reported basis.

Checks by The Guardian showed that Airtel Nigeria had 60.2 million subscribers and has helped in the continued penetration of mobile data and mobile money services. The company saw a 22.4 per cent increase in data customers to 62.7 million and a 19.5 per cent increase in mobile money customers to 37.5 million.

According to the result, earnings per share before exceptional items dropped by 34.6 per cent to 7.1 cents due to a $140 million derivative and FX loss net of tax because of a weakened Naira while capital expenditure grew 8.2 per cent to $494 million.

Commenting on the trading update, the Group Chief Executive Officer, Olusegun Ogunsanya, said: “We remain focussed on the execution of our growth strategy and, combined with our strong operational execution, this has ensured that we continue to see sustained, positive growth momentum across the business, despite the inflationary and currency headwinds. Demand remains resilient, highlighting the vital nature of the voice, data and mobile money services we provide to our customers across the region, and has resulted in a strong 20.2 per cent constant currency revenue growth over the period, with an increase in EBITDA margins.

“This strong operating performance has limited the impact that currency movements have had on the Group. In this regard, whilst further currency devaluation, particularly in Nigeria, has weighed on our reported financial performance, it will not affect the execution of our growth plans.

“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 our consistent strong operating performance and given current leverage, the Board intends to launch a share buy-back programme of up to $100 million, starting early March 2024 over 12 months. We continue to be well positioned to deliver on the attractive growth opportunities our markets offer and despite the challenge of rising diesel prices, ongoing currency devaluation and inflationary pressures across some of our markets we remain focused on margin resilience.”

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