Airtel suffers $549m FX loss over currency devaluations in Nigeria, Malawi

  • SEC imposes N10m penalty for unauthorized security issuance

Nigeria’s second-largest telecom operator, Airtel Africa Plc, has disclosed a loss after tax of $89m for its full year ending March 2024, attributing the downturn to a substantial foreign exchange loss of $549m.

The telco said in its report released on Thursday that the loss was triggered by the devaluations of the Nigerian naira in June 2023 and the Malawian kwacha in November 2023.

The company, which operates in 14 African countries, reported that the foreign exchange losses had severely impacted its quarterly earnings.

“Loss after tax was $89m, primarily impacted by significant foreign exchange headwinds, resulting in a $549m exceptional loss net of tax following the Nigerian naira devaluation in June 2023 and the Malawian kwacha devaluation in November 2023,” the report stated.

The company witnessed growth in constant currency revenue, marking an increase of 20.9 per cent for the full year, with growth accelerating to 23.1 per cent in Q4’23.

Nigerian constant currency revenue reached 34.2 per cent growth in Q4’23 despite challenging conditions. However, reported currency revenues saw a decline of 5.3 per cent to $4,979m, primarily due to the impact of currency devaluation, particularly in Nigeria.

The Chief Executive Officer of Airtel Africa, Olusegun Ogunsanya, stated, “Facilitating this growth has been and will remain fundamental to our performance. The investment in our distribution to catalyse growth and the technology required to support this growth have been key.

“Furthermore, our rigorous approach to de-risking our balance sheet and our capital allocation priorities has materially reduced the risks that the currency devaluation has had on our business,” part of his comments on the report stated.

Other highlights in the report include that the total customer base grew by 9.0 per cent to 152.7 million.

The company said it will continue to bridge the digital divide with a 17.8 per cent increase in data customers to 64.4 million and a 20.8 per cent increase in data usage per customer.

Across the group mobile services revenue grew by 19.4 per cent in constant currency, driven by voice revenue growth of 11.9 per cent and data revenue growth of 29.2 per cent.

Mobile Money revenue grew by 32.8 per cent in constant currency, with a continued strong performance in East Africa.

SEC imposes N10m penalty for unauthorized security issuance

Meanwhile, in a bold move to regulate the issuance and allotment of securities by private companies, the Securities and Exchange Commission of Nigeria has introduced stringent new rules.

The SEC has declared that any unauthorized issuance or allotment of securities will incur a hefty penalty of at least N10m, with an additional N100, 000 fine accruing daily until the violation ceases.

It disclosed this in a statement shared with journalists on Thursday.

The SEC’s proposed rules outline severe consequences for those who fail to comply.

“Any person who issues or allots securities without the prior approval of the Commission, or violates any provisions of these rules shall be liable to a penalty not less than N10m in the first instance,” the Commission stated, emphasizing the gravity of the sanctions.

“To be eligible for issuing securities, a private company must be duly incorporated with a minimum three-year operational track record.”

Furthermore, the SEC mandates that securities must be listed on a registered exchange within 30 days post-allotment.

The regulations cap the amount a private company can raise within a year at N15bn. Issuing houses are required to file a detailed post-allotment report within 21 working days, ensuring transparency in the allotment process.

SEC has also placed restrictions on the use of proceeds from securities issues.

“Issuers are prohibited from using the proceeds of the issues for purposes other than those stated in the offer document without its prior approval,” the Commission clarified, underscoring the need for accountability in fund utilisation.

SEC has invited public comments on the new rules, reflecting its commitment to stakeholder engagement and transparency. All feedback is to be directed to the Rules Committee within two weeks of the publication on the SEC’s website.

The new regulations are a testament to the SEC’s resolve to ensure the integrity of Nigeria’s capital markets and protect investors from unauthorized and potentially harmful financial activities.