Airtel to pay $13bn dividend despite $549m FX loss

The board of Airtel Africa has proposed a final dividend of $3.27 per share for the year ending March 2024.

The telecoms giant will be paying $13.39bn dividend for the period under review, according to its audited annual reports filed with the Nigerian Exchange Limited on Thursday.

The firm had earlier proposed an interim dividend of $2.38 per share, bringing the total dividend for the financial year to $5.95 per share.

In March, the company announced the commencement of its share buy-back programme, buying back 7,389,855 shares, reducing its shareholding to 3,750,761,649 ordinary shares of $0.50 nominal value each.

The telco stated that the effect of the capital reduction was to “create additional distributable reserves, which will be available to the company going forward and may be used to facilitate returns to shareholders in the future, whether in the form of dividends, distributions or purchases of the company’s shares”.

Meanwhile, Airtel Africa suffered a $89m loss after tax, primarily due to significant foreign exchange headwinds, resulting in a $549m loss net of tax following the devaluation of the naira in June 2023 and fourth quarter of 2023/2024, and the Malawian kwacha devaluation in November 2023.

The company remarked, “The after-effects of the CBN announcement continued to impact the exchange rate materially during January 2024, when the Nigerian naira to the US dollar moved to 1,414 per USD, which was also above the threshold percentage as per the group’s exceptional item policy.

“Over February and March 2024, the Nigerian naira to US dollar moved back to close at 1,303 per USD, which was in effect a partial reversal of the losses seen in January 2024. This resulted in a material impact on the group’s financial results, arising from the translation of monetary items at closing exchange rates leading to material derivatives and foreign exchange losses. During the year, the devaluation of Nigerian naira has resulted in derivative and foreign exchange losses of $1.07m.”

Airtel Africa’s revenue declined by 5.25 per cent to $4.98bn from $5.26bn, reflecting the impact of currency devaluation, particularly in Nigeria.

The group mobile services revenue grew by 19.4 per cent in constant currency, driven by voice revenue growth of 11.9 per cent and data revenue growth of 29.2 per cent.

Mobile Money revenue was up by 32.8 per cent with a continued strong performance in East Africa.

Despite the economic headwinds from the Nigerian market, the group affirmed that it would continue to invest in Nigeria to enable it to capture the growth opportunity.

“This continued investment will facilitate growth, drive continued digitalisation across the country, facilitate economic progress and transform lives across Nigeria,” it noted.

Commenting on the results, the outgoing Chief executive officer, Olusegun Ogunsanya, said, “The consistent deployment of our ‘win with’ strategy supported the acceleration in constant currency revenue growth over the recent quarters, which has reduced the impact of currency headwinds faced across most of our markets.

“Furthermore, our rigorous approach to de-risking our balance sheet and our capital allocation priorities has materially reduced the risks that the currency devaluation has had on our business. Key initiatives include the reduction of US dollar debt across the business and the accumulation of cash at the HoldCo level to fully cover the outstanding debt due.

“We will continue to focus on reducing our exposure to currency volatility. At the beginning of March, we launched our first buyback programme, reflecting the strength of our financial position. The growth opportunity that exists across our markets remains compelling, and we are well positioned to deliver against this opportunity.”

Ogunsanya will be succeeded as CEO by Sunil Taldar on July 1, 2024, who joined Airtel Africa in October 2023 as a director.

On Thursday, Airtel Africa also announced the appointment of Paul Arkwright, CMG, as an independent non-executive director, with immediate effect.

The company reported a 99.6 per cent decline in its post-tax profit to $2m at the end of the nine months ended December 2023, from $523m at the end of the same period in 2022.