Floating of the Naira at the foreign exchange market will affect revenue of telecom giant, Airtel Africa in 2023, a statement released by the network provider has disclosed.
In the latest currency update, the Nigerian Naira experienced a depreciation against the US Dollar, reaching an average exchange rate of N780/$1 in the black market.
Prior to the float, Airtel Nigeria had stated that a 1 per cent devaluation of the naira will result in a negative impact of $22 million on revenues, $12 million on EBITDA and $7 million on finance costs (excluding derivatives) on a 12-month basis.
“The weighted average exchange rate used in the profit and loss statement for the 12 months ended 31 March 2023 was approximately 440 NGN/USD, and the rate used to prepare the balance sheet as of 31 March 2023 was 461.4 NGN/USD,” the company said in the statement.
However, the value of the naira has now dropped by 65.9 per cent or N306 in the last one week, which means the impact will be more significant than initially projected by Airtel.
According to the statement, Airtel Nigeria is Airtel Africa’s largest market, with significant growth potential driven by an underpenetrated market, population growth, and strong demand for digital and financial services.
“In our recently reported results for the financial year 2022/23, the customer base increased by 9 per cent, with 4G data customers increasing by 27.6 per cent. This, combined with continued ARPU expansion drove Nigerian constant currency growth of 20.3 per cent in revenues and 11.1 per cent in EBITDA.
“This strong performance has been sustained over many years with five-year CAGR revenue and EBITDA growth of 23.9 per cent and 29.5 per cent in constant currency, respectively. The Group continues to invest in Nigeria to enable it to capture this growth opportunity.
This continued investment will facilitate growth, drive continued digitalization across the country, facilitate economic progress, and transform lives across Nigeria,” the company said.
