July 25, 2024/CSL Research
Airtel Africa’s Q1 2025 financials showed a decline in Revenue by 16.0%, dropping to US$1.16bn from US$1.38 billion in Q1 2024. However, on a q/q basis, total Revenue grew marginally by 3.4%, up from US$1.12 billion in Q4 2024. The y/y decline in Revenue was attributed to significant currency devaluations in several countries, including Nigeria, Malawi, Zambia, and Tanzania. Specifically, the Nigerian Naira devalued from a weighted average rate of N503/US$ in the prior period to N1,384/US$ in the current period.
Data Revenue declined in Q1 2025 by 15.8% y/y to US$409m from US$486m in Q1 2024. The company reported that its total customer base grew by 8.6% to 155.4 million y/y, as mobile data and mobile money services penetration continued to rise. Data customers increased by 13.4% y/y to 64.4 million while mobile money customers grew by 14.9% y/y to 39.5 million. Mobile money Revenue grew by 10.1% in Q1 2025 to US$222m from US$201m in Q1 2024 while Voice Revenue declined by 23.4% y/y to US$476bn in Q1 2025 from US$621bn in Q1 2024.
Airtel Q1 2024
Source: Company data, CSL Research |
Direct Network Operating Costs declined by 13.8% to US$231m from US$268bn in Q1 2024 and Operating Expenses declined by 5.5% y/y to US$410m in Q1 2025 from US$434m in Q1 2024. Despite the decline in costs, the company’s EBITDA decreased by 23.3% y/y to US$523m in Q1 2025 from US$682m in Q1 2024 due to the decline in Revenue. In addition, EBITDA margin also decreased by 429bps y/y to 45.2% in FY 2024. Operating Profit declined by 27.5% y/y to US$335m in Q1 2025 from US$462m in Q1 2024 amidst a 14.5% increase in Depreciation and amortization to US$7188m in Q1 2025.
Net Finance Cost decreased, down 64.1% y/y to US$245m in Q1 2025 from US$683m in Q1 2024. The reduced Net Finance Cost mirrors the 63.4% y/y decrease in Finance Cost amidst a relatively unchanged Finance Income. The decline in Net finance Cost could be attributed to the reduced derivative and foreign exchange losses recorded in Q1 2025. The company recorded FX losses of US$136m compared to the US$471m recorded in the prior year.
Consequently, the company reported a Pre-tax Profit of US$74 million in Q1 2025, a significant turnaround from a Pre-tax loss of US$221 million in Q1 2024. Airtel incurred a Tax Expense of US$43 million, compared to a Tax Credit of US$70 million in Q1 2024. This resulted in a Net Profit of US$31 million in Q1 2025, in contrast to a net income loss of $151 million in Q1 2024. Basic earnings per share (EPS) improved to 0.2 cents, compared to a negative 4.5 cents in the prior period
We have a target price of N1,953.4/s with a SELL recommendation on the stock. Current price; N1980/s.
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Airtel Africa – Q1 2025 Quick take .pdf
