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The Airtel Africa (LSE: AAF) share worth surged virtually 10% this morning after interim outcomes revealed a 171% year-on-year enhance in revenue after tax.
The Q3 2025 report highlighted an distinctive achieve of $94m in pre-tax revenue as a result of foreign money appreciations in Tanzania and Nigeria. Internet revenue got here in at $133m. For the 9 months ending 31 December 2024, it posted a 21% enhance in fixed foreign money income. Nonetheless, as a result of foreign money devaluations, reported income was down 5.8%.
A lot of the expansion got here from sturdy efficiency in its Cell Cash division, which introduced in 29.6% extra income (in fixed foreign money).
Regardless of the sturdy outcomes, its revenue margin slipped 0.5% and primary earnings per share (EPS) fell to six.2c from 7.1c. Earnings earlier than curiosity, tax, depreciation, and amortisation (EBITDA) declined 11.9% in reported foreign money to $1.68bn, attributed to increased gas prices and decrease income from Nigeria.
General, the outcomes have been properly acquired, bringing the share worth as much as 147p — a 25% year-to-date (YTD) achieve.
Rising buyer base
Airtel has been going from energy to energy recently after a interval of combined efficiency in 2023 and 2024. The comparatively new itemizing loved fast beneficial properties in 2021 however faltered after peaking at round 165p in mid-2022.
Now nearing a 30-month excessive, it could quickly breach that worth stage once more.
Buyer development has been sturdy, up virtually 8% this quarter, with smartphone penetration up 44.2% and a 32.3% enhance in information utilization per buyer. It operates in 14 African nations with a majority market share in Zambia, Tanzania, Seychelles, Congo, Niger, Malawi, Gabon, and Chad.
With this morning’s outcomes, it launched a second $100m share buyback, extending the programme introduced in December final 12 months. The plan is to repurchase roughly 900,000 shares within the coming 12 months.
International change dangers
International foreign money losses stay a key subject for the corporate, with the devaluation of the Nigeria naira impacting earnings in earlier years. Over the previous two years, the naira has fallen virtually 70% in opposition to the US greenback.
The decline contributed to an $89m loss reported in its 2024 ultimate 12 months outcomes. Within the fourth quarter of 2023, its internet margin fell to -9.3% however has since recovered to 1.98%. The potential for additional affect from Nigeria stays a threat.
Debt stays one other threat affecting the corporate, having risen an additional 7.5% to $5.3bn. The rising value of gas has contributed to its debt, as diesel mills energy a lot of its community infrastructure in distant areas. As geopolitical points proceed to drive up the value of crude oil, this may occasionally put strain on the corporate’s earnings going ahead.
Challenges forward
Airtel’s restoration lately has been spectacular however many challenges stay. Working in growing nations with risky currencies is a key threat that wants cautious administration.
As such, analysts have combined opinions on the inventory, with worth targets starting from a 26.5% loss to a 39.8% achieve. On common, a decline of 4.47% is anticipated within the coming 12 months.
Nonetheless, with a rising buyer base and powerful income, EPS is anticipated to achieve 22p in 2027 — an almost fourfold enhance. As a shareholder, I’ve excessive hopes for the corporate however stay cautious concerning the financial challenges it faces in Africa.
