Picture supply: Getty Photographs
Airtel Africa (LSE:AAF), the FTSE 100 cell communications group, has printed its outcomes for the quarter ended 30 June (Q1 2026), the primary of its present monetary 12 months. And it continues to develop. It now has 70% extra clients than when it listed in March 2019.
It’s at the moment the second-largest telecoms operator in Africa offering voice, knowledge and cell cash companies to residential and industrial clients in 14 nations.
How’s it doing?
As most of Airtel Africa’s income is earned in native currencies, its outcomes can generally be troublesome to interpret. That’s as a result of its turnover is transformed into {dollars} for the needs of the group’s accounts. And most of the currencies wherein it invoices have been extremely risky over the previous 12 months or so.
For instance — in comparison with Q1 2025 – reported quarterly income in Nigeria (the group’s greatest market) elevated by 29.8%. However when forex fluctuations are eliminated, it went up 48.9%. At group stage, the influence of trade charges is much less pronounced. In comparison with Q1 2025, income was 22.4% greater, or 24.9% extra on a continuing forex foundation.
Nonetheless, buyer numbers aren’t affected by these actions. These elevated by 9% to 169.4m. Earlier than distinctive gadgets, earnings per share went up by 48.6%. And the group’s working margin improved by 2.76 proportion factors.
Traders have been impressed. Airtel Africa’s shares closed the day 7.3% greater.
Robust market fundamentals
It strikes me that it’s a case of being in the suitable place on the proper time. Africa’s economic system is forecast to develop by 3.5-4% in 2025. And its inhabitants is increasing by 2.5% a 12 months. Presently, over 60% residing on the continent are below 25, a key demographic for the trade.
In response to one trade physique, there will probably be 200m extra cell subscribers in Sub-Saharan Africa by 2030. And cell knowledge visitors is predicted to quadruple by 2028.
Challenges
However the group nonetheless faces some points. In addition to affected by risky currencies, Africa’s economies are susceptible to inflation. If value rises get uncontrolled, it might be a double whammy. Firstly, it’s more likely to cut back disposable incomes, which may have an effect on development. Secondly, rising prices are more likely to injury earnings.
Additionally, telecoms infrastructure is dear. The group’s internet debt has elevated from 1.6 occasions to 2.2 occasions EBITDA (earnings earlier than curiosity, tax, depreciation and amortisation) over the previous 12 months. Though it was marginally greater on the finish of March.
Nonetheless, to try to assist mitigate the international trade challenge referred to earlier, 95% of Airtel Africa’s debt is now priced in native currencies.
However…
Personally, I feel the group’s in a great place to proceed its robust development story. It not too long ago signed a cope with SpaceX to roll out its high-speed Starlink satellite tv for pc service in its 14 markets.
And it may additionally do effectively regardless of wider financial uncertainty. In lots of elements of Africa, mobiles are the one supply of connectivity. This provides the sector a sure diploma of safety throughout a slowdown.
And the current announcement that it plans to spin-off of its cell cash companies division might be profitable. There’s been some hypothesis that the enterprise might be price near $5bn (£3.7bn). The group’s present market-cap is £7.1bn.
For these causes, I feel it’s a inventory for long-term development traders to contemplate.
