London-listed telco Airtel Africa Plc posted a loss in its first quarter of its fiscal year due to a currency devaluation in its largest market, Nigeria.
The subsidiary of India’s telecom major Bharti Airtel Ltd posted a net loss of $151 million in the three months ended June despite, it said in a statement.
It had reported a profit of $178 million in the same quarter last year.
While each of the telecommunications company’s divisions reported double-digit constant currency revenue growth was impacted by currency devaluation, it said.
The loss was driven largely by a foreign exchange loss of $471 million and $317 million after tax because of the devaluation of the Nigerian naira in June, the company said.
Airtel Africa’s revenue including the exchange fluctuations rose by 9.6% year-on-year to $1.3 billion. It’s Ebitda was $682 million, an increase of 11.1%.
The telco left capex unchanged at $140 million, saying it plans to invest in future growth.
“Despite the strong operating performance, our results have been impacted by foreign exchange headwinds, Airtel Africa’s CEO Olusegun Ogunsanya said.
“This quarter saw the announcement of the change to the FX (foreign exchange) market in Nigeria which resulted in a significant naira devaluation.”
Ogunsanya said the company has welcomed this reform as very positive for the medium and long-term development of its business in Nigeria.
The reforms would improve liquidity over time, alleviating the challenges faced by international businesses over accessing US dollars, which had restricted growth, he said.
Nigeria’s central bank allowed the naira to trade freely last month as part of changes implemented by newly elected President Bola Tinubu’s administration.
The decision resulted in an instant 40% devaluation of the naira. The loosening of exchange regulations is intended to increase capital movements and help clear a backlog of dollar demand that has accumulated over the years.
