Airtel Africa Share Price Rallied 5.18% on 9-Month Trading Update

The Airtel Africa PLC (LON: AAF) share price rallied 5.18% after releasing its trading update for the nine months to 31 December 2023. The telecommunications company saw a significant expansion in its customer base, which surged by 9.1% to reach 151.2 million. 

The growth was attributed to the increased adoption of mobile data and money services, evident from a 22.4% rise in data customers to 62.7 million and a 19.5% boost in mobile money users to 37.5 million.

A notable 10.0% growth in average revenue per user (ARPU) in constant currency was driven by heightened usage across various service segments. The value transacted through mobile money services leapt by 41.3% in constant currency, with the third quarter of 2024 annualising a transaction value of $116 billion in reported currency.

Revenue growth in constant currency stood at 20.2%, accelerating to 21.0% in the third quarter of 2024. However, reported revenue saw a decline of 1.4% to $3,861 million, with the third quarter reflecting an 8.3% drop, primarily due to currency devaluations, especially the Nigerian naira.

Despite currency fluctuations, all company segments reported double-digit growth in constant currency. Mobile services revenue increased by 18.6%, propelled by an 11.2% rise in voice revenue and a 28.5% surge in data revenue. Mobile money revenue experienced a 31.8% growth in constant currency.

EBITDA in constant currency grew by 21.9%, and the EBITDA margin expanded by 72 basis points to 49.4%, overcoming the challenges of foreign exchange volatility and inflation. However, reported EBITDA slightly decreased by 0.4% to $1,908 million.

The profit after tax stood at $2 million, significantly influenced by foreign exchange challenges, including a substantial $330 million loss after the Nigerian naira and the Malawian kwacha devaluation. Basic EPS was negatively impacted, recording a (1.6 cents) loss compared to a 12.5 cents gain in the previous period.

Capital expenditure increased by 8.2% to $494 million, with the full-year guidance set between $800 million and $825 million, underlining the company's commitment to future growth.

The leverage ratio improved to 1.3x from 1.4x, with the company poised to fully repay its $550 million HoldCo debt due in May 2024, supported by a HoldCo cash balance of $560 million.

Airtel Africa share price. 

The Airtel Africa share price rallied 5.18% to trade at 117.8p from Wednesday’s closing price of 112.0p.