Bharti Airtel ’s Africa business reported a modest $31 million net profit in the fiscal first quarter compared to a $151 million net loss a year ago, on the back of a sharp fall in net finance costs, but revenues declined on-year, primarily stung by currency devaluation in Nigeria.

Airtel Africa ’s revenue fell 16% from a year back to $1.15 billion, reflecting the impact of currency devaluation, particularly in Nigeria, coupled with an unchanged data user base.

Sequentially, though, revenue rose 3.4%, helped by a higher average revenue per user (ARPU) and strong growth momentum of the mobile money business.

Net finance cost for the June quarter, FY25, at $139 million was 34% lower on-year and around 2.11% less sequentially, primarily on account of lower derivative and foreign exchange losses.

“Reported currency revenue growth was particularly impacted by significant currency devaluations in Nigeria, Malawi, Zambia and Tanzania.

In particular, the naira devalued from a weighted average NGN/US$ rate of 503 in the prior period to NGN/US$ 1,384 in the current period,” Airtel Africa said in its earnings statement Thursday.

Airtel’s Africa unit added that its $31 million PAT in the June quarter was impacted by $80 million of exceptional derivative and forex losses (net of tax) and lower Ebitda due to significant currency devaluation across key markets.

“We have initiated a comprehensive cost optimisation programme across the Group.

We have already seen success in this project, with savings arising in network and distribution costs, and continued opportunities as contract renegotiations continue,” Sunil Taldar, Airtel Africa’s chief executive officer, said in an official statement.

Airtel’s Africa unit, he said, expects sustainable savings to continue as the year progresses.

He added that during the June quarter, Airtel Africa fully repaid its outstanding debt due at the HoldCo and it remains committed to further reduce foreign currency exposure across the (Airtel Africa) Group to limit the impact of currency devaluation on its business.

Airtel Africa, in fact, has zero HoldCo debt after its Netherlands-based holding company (Bharti Airtel International-Netherlands B.V) concluded a $550 million bond repayment in May 2024 to cut foreign currency debt.

“In total, 86% of our market debt is now in local currency, having paid down $828 million of foreign currency debt over the last year,” Bharti’s Africa arm said.

Airtel Africa, though, added that the $100 million share-buyback continues, with 21 million shares purchased for a consideration of $29 million as of end-June 2024.

Operational performance was steady with Airtel Africa’s ARPU — a key performance metric — rising 2.8% sequentially to $2.2, helped by decent data usage growth.

The penetration of Airtel Africa’s mobile money services continued to rise, helped by a 3.9% sequential rise in its mobile money customer base to 39.5 million in the fiscal first quarter.

Quarterly revenue from the mobile money business too rose 7.9 % sequentially to $223 million.

The mobile money business ARPU, in turn, rose 4.6% on-quarter to $1.9. The data user base of Airtel Africa was unchanged at 64.4 million.

But the overall customer base across the telco’s 14 African markets rose 1.8% sequentially to 155.4 million.

Data revenue increased 6.1% sequentially to $417 million in Q1FY25, helped by 7.4% higher consumption.

The Africa unit’s capex at $147 million was also 4.9% higher compared to the year-ago period.

“Capex guidance for the full year remains between $725 million and $750 million as we continue to invest for future growth,” the company said in its earnings statement.

But a substantial rise in fuel prices across Africa markets and the lower contribution of Nigeria to the Group after the naira devaluation contributed to a decline in operating margins to 45.3% from 49.5% in Q1’24 and 46.5% in Q4’24 Net debt in the fiscal first quarter was up nearly 6.3% sequentially to $3.72 billion.

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