Airtel Africa Falls to N4.4trn on Price Correction

After hitting the rooftop earlier in the year, Airtel Africa Plc’s share price has been declining, losing 6% last week to close at N1,175 on Friday, trading data from the Nigerian Exchange (NGX) shows.

Airtel Africa grows customers but the telecom company saw its profit reduced year on year, while management put up efforts to deleverage the balance sheet.

In its financial scorecard, Airtel Africa’s customer base surged 9% to 140 million, while the mobile money customers base settled at 31.5 million, representing a 20.4% year-on-year growth.

Its board of directors excite shareholders with a total dividend of 5.45 cents per share, representing an increase of 9% from 5 cents paid in the comparable period.

Even with this, its share price has seen an increase in volatility amidst price markdown post dividend payment in the local bourse. Earlier in 2023, Airtel Africa ranked ahead of other members of the trillion naira market capitalisation gang following sustained bullish runs.

The telecom giant’s share price had hit N2040 when its immediate rival was valued very lower in comparison, data from the local bourse show.

Trading data tracked by Daily Global News show that Airtel Africa has lost 42% since September 2022.

The company’s share had maintained an uptrend after it moved to acquire minority interest owners in Nigeria. Its total market valuation had printed near N7 trillion. With declined earnings performance, its overvalued share price has continued to slump.

In its recent earning release, Airtel Africa reported a decline in profitability. Its financial scorecard showed that annual profit was $5 million below the previous year’s record.

The telecom giant increased capital spending to boost its market position. Total capital expenditure printed at $748 million, up 14.0%. According to its earnings presentation, 87% of capex investment is towards growth initiatives.

Airtel Africa’s growth initiative is targeted to enhance network capacity, increase coverage and ensure reliable connectivity.

The telco operators increased data capacity by 41.2% to almost 24k Tb/day, with only 35.9% capacity utilization in the network (with peak-hour utilisation of 47.4%).

Management said 90.3% of sites have been upgraded to 4G and it rolled out 6,000+km of fibre over the last year resulting in 70,500+km of total fibre deployment.

Spectrum acquisition in Nigeria, Kenya, DRC, Zambia, Tanzania and Seychelles with an investment of $500 million. It made an investment of $18m in data centres, including land acquisition in Nigeria.

It said cash capex (excl. spectrum) is higher due to continued investment for future growth, as well as increased spending related to the PSB launch in Nigeria.

“The higher spend is in line with our capital expenditure guidance for the year”, according to the management report. In its latest performance scorecard, Airtel Africa recorded 27.8% growth in data revenues supported by increased capacity in Nigeria.