By JAMES ANYANZWA

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Airtel Africa plans to inject up to $825 million of fresh capital to shore up its African operations as the telco’s half-year performance returned a net loss of $13 million weighed down by sharp depreciation of currencies in Kenya, Tanzania, Zambia, Malawi and Nigeria.

The group posted a net loss of $13 million during the six months to September 30 from a net profit of $330 million in the same period last year, as it grapples with a $550 million debt that is due for repayment in May 2024.

The telco, which is listed on the London Stock Exchange and Nigerian Stock Exchange, disclosed through its unaudited financial statements that its strategy for Africa remains unchanged despite the losses.

Read: Airtel’s $3b debt weighs heavily on telco’s expansion

“Our capital allocation policy remains unchanged. Our priority is to continue to invest in the business to ensure we future proof our operations for sustained growth,” the firm said.

“We reiterate our previous guidance of between $800 million and $825 million for this financial year. We don’t have any plan to reduce our capital expenditure commitment. This is a long-term play. We will continue to invest in each of our markets to extract value and deliver value to our customers.”

By March 31, the group had invested $500 million in spectrum acquisition including the 5G network.

For example, in Kenya, Airtel Networks Kenya Ltd acquired 60 MHz in the 2,600 MHz spectrum band in July last year for a period of 15 years upon payment of $40 million.

Read: Airtel Kenya to invest $150m in grid growth

Revenues wiped out

While in October 2022, Airtel Tanzania was awarded 80 MHz in the 3,500 MHz band and two blocks of 15 MHz in the 2,600 MHz band at the price of $21 million and $39 million, respectively. The spectrum was issued for a period of 15 years from the date of award.

In Uganda, Airtel Uganda Ltd is struggling to sell 20 percent of its shares to the public through an initial public offering (IPO) in compliance with a regulatory requirement.

The rule compels all national telecommunication operators to cede 20 percent of theirs shares to the public within two years of the effective date of the operating licence is issued.

So far National Social Security Fund (NSSF) Uganda, Uganda’s biggest pension scheme has invested $52.7 million (Ush199 billion) in Airtel Uganda, that is equivalent to 10.55 percent of the 20 percent stock on offer.

Read: NSSF Uganda acquires 50pc of Airtel’s IPO stock

Steep depreciation of currencies in Kenya, Tanzania, Zambia, Malawi and Nigeria took a heavy toll on Airtel Africa’s PanAfrican operations wiping off $345 million of its revenues from revaluation of foreign exchange liabilities in the operating companies.

Its heavy exposure came from the Nigerian naira which lost 51.7 percent of its value followed by Kenyan shilling (19.3 percent), Zambian Kwacha (14.9 percent), Malawi Kwacha (10.6 percent), Madagascar ariary (8.8 percent) and the Tanzanian shilling (4 percent).

Early redemption

The telco, which has operations in 14 African countries, faces a further $49 million hit on revenues and $19 million on finance costs should the dollar appreciate by an additional one percent across all currencies in its operating companies in the continent on a 12-month basis.

“Our largest exposure is to the naira, for which a further one percent dollar appreciation would have a negative impact of $14 million on revenues, $8 million on EBITDA (earnings before interest, taxes, depreciation, and amortisation) and $7 million on finance costs (excluding derivatives),” the firm said.

Read: Airtel Africa recalls bonds, sells towers

According to the group’s unaudited financial statements, voice revenue declined by 4.6 percent from $1.22 billion to $1.16 billion while data revenue increased by 5.9 percent from $864 million to $915 million in the same period.

Mobile money revenue grew by 30.9 percent driven by revenue growth in East Africa of 34.9 percent, and Francophone Africa (18.7 percent).

In East Africa, the group’s revenues grew by 20.6 percent fuelled by voice revenue growth of 14.6 percent, data revenue growth of 31 percent and other revenue growth of 18.8 percent.

Last year, Airtel Africa PLc recalled $505 million bonds that were to mature in March this year, with a view of saving $26 million on interest payments from the early redemption.

Following the early repayment of the bonds priced at 5.125 percent the Group remained only with $1 billion of bonds at Holding Company (HoldCo) level which are due in May 2024.

In July, 2022, the group also prepaid $450 million of the bonds at HoldCo. As a result, the outstanding bonds at HoldCo are now $550 million, falling due in May 2024.

The group incurred a cost of $19 million on early repayment of part of its $1 billion bond as the telco worked on what it considers “viable” options to reduce about $3 billion debt load weighing heavily on its African operations.

The early debt repayment costs, including currency volatilities across the African markets impacted the telco’s net earnings which dropped marginally by 0.6 percent during the financial year ended March 31, 2023.

The telco, a subsidiary of India’s Bharti Airtel Ltd, posted a profit after tax of $750 million from $755 million in the previous year, after including a higher foreign exchange and derivative losses of $245 million.