Airtel Africa Plc swung into a loss in the first quarter following a currency devaluation in its largest market, Nigeria, despite reporting revenue that beat analysts’ estimates.
(Bloomberg) — Airtel Africa Plc swung into a loss in the first quarter following a currency devaluation in its largest market, Nigeria, despite reporting revenue that beat analysts’ estimates.
The London-listed telecommunications company said it made a $170 million net loss in the three months ended June, after derivative and foreign-exchange losses of $471 million due to the naira devaluation.
Read: Airtel Africa 1Q Revenue Beats Estimates
Nigeria’s central bank last month allowed the naira to trade freely in reforms introduced by newly elected President Bola Tinubu’s government. The move led to an immediate devaluation of about 40% of the naira. The easing of exchange controls is aimed at boosting capital flows to help clear a backlog of dollar demand built up over years.
Read: Naira Plunges as Nigeria Lets Currency Break Through Control
Airtel Africa Chief Executive Officer Olusegun Ogunsanya said the measure was “very positive for the medium and long-term development” of its business in Nigeria, even after it had a material impact on the company’s results in the quarter.
“We expect the FX reforms to improve liquidity over time, thereby alleviating the challenges faced by international businesses over the last few years associated with accessing US dollars and thus hindering accelerated growth,” he said in the results statement.
The group will focus on reducing its foreign-exchange exposure to limit the impact of any future devaluation, he said.
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