Bharti Airtel’s Africa business reported a 92% on-year fall in net profit for the fiscal third quarter, stung by significant foreign exchange headwinds amid currency devaluation in Nigeria and Malawi and a sharp jump in net finance costs.

In a statement Thursday, Airtel Africa also said it will launch a share buy-back programme of up to $100 million, starting early March 2024 over a 12-month period.

Net profit for the quarter ended December 31, 2023, fell to $15 million on-year, also reflecting an 89% sequential fall. Airtel Africa’s fiscal third quarter revenue too fell 8% from a year earlier to $1.23 billion, hit by the currency devaluation, primarily of the Nigerian naira.

Net finance cost for the December quarter at $352 million was 118% higher on-year and around 85% more sequentially.

Airtel’s Africa unit, though, reported a decent operating performance by way of subscriber additions and higher average revenue per user (ARPU) in the quarter, said analysts.

“Profit after tax was $2 million in the (nine-month) period, primarily impacted by significant foreign exchange headwinds, particularly the $330 million exceptional loss after tax following the devaluation of the Nigerian naira in June 2023 and the Malawian kwacha in November 2023 after the structural changes in their respective FX markets,” Airtel Africa said in its earnings statement.It added that the Nigerian naira devalued further in Q3, FY24, resulting in a $140-million derivative and forex losses, net of tax, which is not treated as an exceptional item.For the December quarter, the $15 million net profit was primarily hurt by derivative and foreign exchange losses of $153 million (net of tax) due to devaluation of Nigerian naira and Malawian kwacha.

“We remain focussed on the execution of our growth strategy and, combined with our strong operational execution, this has ensured that we continue to see sustained, positive growth momentum across the business, despite the inflationary and currency headwinds,” Segun Ogunsanya, Airtel Africa’s Group chief executive officer, said in the statement.

He added that Airtel Africa’s strong operating performance “had limited” the impact that currency movements have had on the Group. “Whilst further currency devaluation, particularly in Nigeria, has weighed on reported financial performance, it will not affect execution of our growth plans.”

Airtel Africa’s ARPU — a key performance metric — rose 2.7% sequentially and 8.8% on-year to $2.6. The customer base across Airtel Africa’s 14 markets rose 2.1% sequentially and 9.1% on-year to 151.2 million. Data revenue increased 6% sequentially to $461 million.

Net debt in the fiscal third quarter was down 1.2% sequentially to $3.28 billion. Leverage (net debt to ebitda) at 1.3 times, improved from the prior period level of 1.4 times. “Cash at the HoldCo was $560 million at the end of the period and the (Airtel Africa) Group expects to fully repay the HoldCo debt of $550 million when due in May 2024,” Airtel’s Africa arm added.

The penetration of Airtel Africa’s mobile data and mobile money services continued to rise, helped by a 4.9% sequential rise in data customers to 62.7 million and a 2.5% on-quarter increase in mobile money customers to 37.5 million. Quarterly revenue from the mobile money business too rose 8.6% sequentially to $230 million.

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