Despite a growth in revenue, Airtel Africa has reported a 5% drop in their profit for the first quarter of the year. Airtel’s CEO cites the challenging operating environment and worries about currency devaluation.
According to a financial statement published on the Nigerian Exchange Group (NGX), Airtel Africa has reported a 5% decline in their profit for the first quarter of 2023.
Airtel’s profit after tax (PAT) for the period under review dropped by 0.6% to $750m, compared to $755m during the same period in 2022. Conversely, the telco’s revenue grew by 11.5% to $5.25m in Q1 2023, compared to $4.71m in the same period in 2022.
Commenting on the financial performance, Airtel Africa’s chief executive officer (CEO), Olusegun Ogunsanya, stated that the operating environment of the company has been challenging in many ways and expressed hopes of improvement over the numerous challenges.
“The resilience of our underlying EBITDA margins has shown the effectiveness of our operating model, despite significant inflationary and foreign exchange pressures. Strong customer and ARPU growth over the year demonstrates that demand for our services remains very strong and gives us the confidence to continue investing to support our future growth potential,” Ogunsanya said.
Ogunsanya also noted that the local currencies of its operating countries have been under pressure. He admitted that currency devaluation is beyond the telco’s control, but plans have been put in place to mitigate its impact by ensuring its revenues outpaces devaluation.
Airtel Africa also revealed that its revenue growth for the quarter was impacted by clampdown on Nigerian subscribers who had not submitted their National Identification Number (NIN). The telco noted that as of March 2023, 6.4 million customers had submitted their NINs while 3.5 million customers had been fully verified and unbarred. According to the financial statement, the clampdown caused a revenue loss of $110m in the reviewed period, leading to a lag in revenue growth of almost 2.4% at Group level, and 6% in Nigeria.
The telco’s financial statement also reported that its mobile services revenue grew by 16.2% across its regions. Mobile services revenue was up by 20.3% in Nigeria , in east Africa by 13.4% and in francophone Africa by 11.9%.
“Mobile services revenue growth was driven by both voice and data services, voice revenue grew by 11.8% and data revenue by 23.8%. Mobile money revenue grew by 29.6%, driven by 32.6% growth in east Africa and 20.3% in francophone Africa,” the report read.