Airtel Africa's Profitable Turnaround in Sub-Saharan Market

Airtel Africa, part of Bharti Airtel, reported a net profit of USD 79 million for the July-September period, reversing a USD 13 million loss from the previous year. The company's cost optimization initiatives, increased smartphone penetration, and foreign debt reduction contributed to its positive performance despite currency challenges.

Airtel Africa, a subsidiary of Bharti Airtel, has successfully flipped its financial performance, reporting a net profit of USD 79 million for the July-September quarter. This marks a significant improvement from the USD 13 million loss seen a year earlier.

The company's profitability was affected by USD 151 million in derivative and foreign exchange losses resulting from the depreciation of the Nigerian Naira, according to a company statement.

Despite this challenge, Airtel Africa recorded revenue of USD 2,370 million, a 9.64% dip from the prior year's corresponding period.

Cost optimization strategies and operational leverage have started to yield results, as indicated by an enhanced EBITDA margin in Q2 FY25.

The firm has also reduced its exposure to foreign currency debt, cutting it down to 11% of market debt by September's end, having repaid USD 809 million over the year.

Airtel Africa's customer base increased by 6.1%, totaling USD 156.6 million. Smartphone penetration rose by 5.3%, driving a 30.9% surge in data usage per user to 6.6 GB.

To support this growth, the company expanded its network with 2,800 additional sites and 3,500 km of fiber, boosting data capacity by 20%.

The substantial opportunity in the sub-Saharan market, characterized by a youthful demographic and low banking penetration alongside rising smartphone and digital transaction adoption, presents a promising avenue for future expansion.

(With inputs from agencies.)