Airtel Africa, one of the leading telecommunications services providers in Africa, has reported a $1.7 billion foreign exchange (FX) loss in Q1 this year, primarily due to currency devaluations in Nigeria and Malawi, its major markets, this year.
The company incurred the loss despite a 20.9% growth in its service revenues when measured in constant currency as the depreciation in the Nigeria and Malawi’s currencies dipped the group’s revenue by 5.3% to $4,979 million and 5.7% in EBITDA to $2,428 million as of the end of the first quarter this year.
The telco’s Managing Director/CEO, Olusegun Ogunsanya, highlighted the strategies being adopted by the management to mitigate negative FX fluctuation impacts on its financial performance, including focusing on distribution and technology investments, and minimizing currency devaluation risks.
An analysis of the MNO’s financial performance in the quarter under review also showed that the devaluation of the Naira negatively impacted its revenue, leading to a loss of $1,042 million and $554 million loss in its EBITDA.
As expected, its operational costs surged to $1,703 million primarily due to $1,259 million in losses from derivatives and foreign exchange revaluations, oe which $770 million was caused by the devaluation of Nigeria’s national currency.
In a statement issued on the company’s financial performance in Q1 2024, Ogunsanya highlighted the effectiveness of the management’s strategic approach in mitigating the adverse effects of Naira fluctuations and sustaining its growth trajectory.
He stated: “The consistent deployment of our “Win With’ strategy supported the acceleration in constant currency revenue growth over the recent quarters, which has reduced the impact of the currency headwinds faced across most of our markets.
“This strong revenue performance is a reflection not only of the opportunity that is inherent across our markets, but also the resilience of our affordable offerings despite the inflationary pressure many of our customers have experienced”, he added.
Speaking on the management’s strategies that had helped in the telco’s sustained growth, the industry expert maintained that investments in distribution and technology as well as financial discipline were key to the company’s for improved performance..
He clarified: “Facilitating this growth has been, and will remain, fundamental to our performance. The investment in our distribution to catalyze growth, and the technology required to support this growth has been the key.”
