Airtel Africa, a prominent telecommunications and mobile money services provider, has announced its financial results for the half-year ending September 30, 2024. In conjunction with these results, Airtel Africa revealed the renewal of its tower lease agreements with American Tower Corporation (ATC). This renewal extends the lease for an additional 12 years, covering approximately 7,100 sites across Nigeria, Uganda, Kenya, and Niger. The current agreements were set to expire within the next 12 to 24 months.
A key aspect of the renewed agreements is a focus on renewable energy solutions, particularly for a significant number of sites in Nigeria. This initiative aims to reduce dependency on diesel fuel and lower operating costs. Airtel Africa reported that substantial increases in fuel prices across its markets have contributed to a decline in EBITDA margins, which fell to 45.8%, down from 49.6% in the first half of 2024. Notably, petrol prices in Nigeria have surged by over 400% since May 2023.
In terms of financial performance, Airtel Africa’s group revenue in reported currency declined by 9.7%. However, the company achieved a profit after tax of $79 million. Mobile money revenue experienced robust growth, increasing by 28.8% in constant currency, with the number of subscribers rising to 41.5 million.
The renewal of the tower lease agreements is expected to have a significant impact on profit after tax in the first year, estimated to be between $120 million and $130 million, with half of this impact anticipated in the fiscal year 2025. Airtel Africa operates in 14 countries across East, Central, and West Africa, and the renewals ensure that the company continues to benefit from contract structures, including those linked to foreign currency.
Despite an ongoing investigation by the Common Market for Eastern and Southern Africa (COMESA) Competition Commission into potential anti-competitive practices involving Airtel and ATC, officials have indicated that the new agreements are separate from the probe.
As of the end of September 2024, Airtel Africa had repurchased 61 million shares for $88 million as part of its share buyback programme, which has a total value of up to $100 million and commenced in March 2024. Under this programme, the company acquired 8.6 million ordinary shares from Citigroup Global Markets Limited in April 2024. Additionally, for the quarter ending June 30, 2024, Airtel Africa purchased another 21 million shares, amounting to $29 million.
The group also reported compliance with the Nigerian Communications Commission (NCC) directive to block SIMs not linked to a National Identification Number (NIN) and to limit active SIMs to four per customer. This directive had a negligible impact on group revenue. However, the NIN-SIM verification exercise led to Nigerian mobile network operators losing 64.3 million subscriptions, as the NCC concluded the programme on September 14, 2024.
