Airtel Africa to lose $14m to naira devaluation
As Nigerian businesses continue to readjust to the realities of post-COVID-19 pandemic, and government makes policies to support the adversely impacted economy, Airtel Africa’s earnings will be affected.
The company’s revenue and earnings before interest, taxes, depreciation and amortization will both be caught between government and the Central Bank of Nigeria’s policy change.
Airtel Africa projected that the naira will be devalued by 1% in its first quarter financial statement, and this will cost the company $14 million in revenue, as well as $8 million in earnings before interest, taxes, depreciation and amortization.
“The global economic slowdown combined with lower oil and commodity prices has resulted in currencies devaluing across our markets, including the Nigerian naira, Kenyan shilling and Zambian kwacha.” Airtel said.
Read also: Airtel Africa’s mobile money business overshadows voice and data revenue
Airtel said in a statement, that, “On a 12-month basis, we estimate that a 1% Nigerian naira devaluation will have a negative $14m impact on revenue, $8m on underlying EBITDA and $6m on finance costs.”
Its largest financial exposure is in Nigeria. This will heavily impact the financials of the company which operates across 14 markets in Africa.
While Airtel, like its rival, MTN Nigeria, have directly gained from COVID-19 pandemic with increased data and voice usage, it will experience a negative impact indirectly from country policies.
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