Airtel Africa experiences a 5% reduction in profit by the end of 2022
Airtel Africa Reports 5% Profit Drop Amidst Revenue Growth
In a recent financial statement published on the Nigerian Exchange Group (NGX), Airtel Africa reported a 5% decline in profit for the year ended 2022, despite an 11.5% growth in revenue. The decline can be attributed to increased costs related to spectrum acquisitions, operational expenses, and currency fluctuations.
Olusegun Ogunsanya, the CEO of Airtel Africa, expressed confidence in continuing to invest to support Airtel's future growth potential. However, he acknowledged that the operating environment has been challenging.
The revenue growth was driven by both voice and data services, with voice revenue growing by 11.8% and data revenue by 23.8%. Mobile services revenue was up by 20.3% in Nigeria, 13.4% in east Africa, and 11.9% in francophone Africa.
Airtel's revenue growth was partially offset by a clampdown on Nigerian subscribers without National Identification Number (NIN), which impacted its revenue growth for the quarter. This led to a loss of $110m and a lag in revenue growth of almost 2.4% at Group level, and 6% in Nigeria. As of March 2023, 6.4 million Airtel Africa customers had submitted their NINs, while 3.5 million customers had been fully verified and unbarred.
In 2022, Airtel Africa spent USD 42 million on spectrum acquisition in the Democratic Republic of Congo, a significant one-time operational investment that increased costs that year. The prior periods were also affected by foreign exchange losses, especially in Nigeria. Although some currency gains occurred later, notably a $22 million gain from the Central African franc appreciation reported in 2025, currency volatility around 2022 suppressed profit margins.
The telecom sector in Africa is competitive and capital-intensive, and ongoing network expansion and digital inclusion efforts elevated expenses that could offset revenue gains temporarily. However, the resilience of Airtel Africa's underlying EBITDA margins demonstrates the effectiveness of their operating model. Strong customer and ARPU growth over the year shows that demand for Airtel's services remains very strong.
Mobile money revenue grew by 29.6%, driven by 32.6% growth in east Africa and 20.3% in francophone Africa. Despite the challenges, Ogunsanya expressed hopes of improvement over the numerous challenges.
In summary, the 5% profit decline despite 11.5% revenue growth in 2022 reflects the timing of heavy investments and currency effects which weighed on profitability, even as the company laid groundwork for longer-term growth. The company continues to invest in its network and digital services, with the aim of providing better services to its customers and driving future growth.
- The increasing investments in technology, such as network expansion and digital inclusion efforts, have contributed to the elevated expenses in the mobile industry, temporarily offsetting revenue gains for Airtel Africa.
- Finance plays a crucial role in Airtel Africa's future growth strategy, with the company committing to continue investing in its network, mobile technology, and digital services, particularly in finance technology, to better serve its customers and drive growth.
