Nigeria banking approval should spur further growth in mobile money
Thursday 19 May 2022 Author: Ian Conway

Airtel Africa (AAF) 140p

Loss to date: 4.6%

Original entry point 146.69p, 21 April 2022


Given the drubbing handed out to global stock markets since we said to buy FTSE 100 firm Airtel Africa (AAF), we’ll take a sub-5% loss on our opening price with grace.

The group’s full-year results more than delivered on its sales and operating profit targets with revenues in constant currencies up more than 20% to $4.7 billion and a 49% margin on underlying EBITDA (earnings before interest, tax, depreciation and amortisation).

Voice revenues were up 15.4% but the two biggest drivers were data up 34.6% and mobile money up 34.9% during the year.

Net cash from operations was up 20.7% to over $2 billion, allowing the firm to repay over $1.4 billion of debt and end the year with leverage of just 1.3 times EBITDA.

The ability to offer mobile financial services in Nigeria, thanks to the approval of a payment service bank business last month, means mobile money revenues should accelerate this year.

At the same time, we are mindful that Nigeria is the biggest risk in terms of currency devaluation against the dollar, with a 1% devaluation having a negative impact of $18 million on revenues and $11 million on EBITDA.

However, we are excited by the long-term growth opportunities and the firm’s commitment to continue growing revenues and margins.



SHARES SAYS: Airtel Africa remains a buy. 

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