Airtel Africa Plans $100M Share Buyback as Profit Dips 100%

Airtel Africa, a company that recently made some big announcements is planning to buy back $100 million worth of their shares, which is a lot of money! But at the same time, their profit has gone down by a whopping 100%. Let’s find out more about what’s going on.

The Decline in Profit

Airtel Africa’s profit after taxes went down to just $2 million at the end of December 2023. That’s a huge drop from $523 million in the same period the year before. The company explained that this decline was mainly because of some problems with foreign exchange rates. They lost $330 million due to the devaluation of the Nigerian naira and the Malawian kwacha. In the third quarter of 2024, they also faced a $140 million loss because the Nigerian naira devalued even more. These losses are not considered exceptional, which means they are not one-time events.

Revenue and Cash Generation

Even though Airtel Africa’s profit went down, its revenue only decreased by 1.4% to $3.86 billion. That’s still a lot of money! On the bright side, they were able to generate $1.76 billion in cash from their operations, which is a 3.2% increase compared to before.

CEO’s Perspective

The CEO of Airtel Africa, Olusegun Ogunsanya, talked about the company’s financial report. He said that despite some challenges, they are still growing and providing important services to their customers. He mentioned that their revenue grew by 20.2% in constant currency, which means they made more money even when considering changes in exchange rates. He also mentioned that they have plans to pay off their debts and invest in new opportunities, like their data center business called Nxtra by Airtel.

Share Buyback Program

Airtel Africa’s board of directors has decided to start a share buyback program. This means they will use $100 million to buy back their shares from the market. They will do this over 12 months, starting in March 2024. The CEO believes that this is a good move because the company is doing well and can afford it.

MTN Group Invests $251 Million in Benin’s Telecom Infrastructure

Previous Losses

This is not the first time Airtel Africa has faced losses. In their half-year results for September 2023, they had a loss of $13 million. In the first quarter of 2023, they suffered a loss of $151 million because of the devaluation of the Nigerian naira.

Conclusion

Airtel Africa is going through some ups and downs. They’re planning to buy back $100 million worth of shares, but their profit has gone down by 100%. However, they’re still making a lot of money and have plans for the future. It will be interesting to see how things unfold for them in the coming months.