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Strong Customer Growth in Nigeria Buoys Airtel Africa 9-month Results

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Airtel Nigeria SIM update

By Dipo Olowookere

After getting battered by the implementation of new know your customer requirements by the Nigerian authorities, Airtel Africa is beginning to see an improvement in its customer base.

In its unaudited financial statements for nine months ended December 31, 2021, the leading telco said it recorded 1.9 million net additions in the third quarter, taking total group customer additions to 3.1 million.

This supported that 21.7 per cent revenue growth to $3.492 million from $2.850 million achieved in the same period of 2020.

A closer look into the revenue line showed that voice accounted for $1.747 million compared with $1.537 million in the first nine months of the preceding accounting year, while data contributed $1.127 million as against $842 million of the earlier period, with mobile money accounting for $406 million versus $291 million and other revenue contributing $306 million as against $255 million in 2020.

Business Post observed that the revenue of Airtel Africa grew partly because of a one-time exceptional revenue of $20 million relating to a settlement in the Niger Republic.

Excluding this, revenue grew by 22.5 per cent in reported currency and by 24.8 per cent in constant currency, with the difference relating to currency devaluations, mainly in the Nigerian naira (6.3 per cent) and the Malawian kwacha (8.2 per cent), in turn partially offset by appreciation in the Ugandan shilling (4.3 per cent) and the Central African franc (2.0 per cent).

Revenue growth for the 9 months period benefitted from a weakened performance in the first quarter of the prior year during the peak period of COVID-19 related restrictions across the region. However, even after adjusting for this, group revenue growth rates were ahead of FY’21.

“A strong third quarter has contributed to a pleasing nine-month financial performance across all key metrics.

“Operationally, we have continued to execute on our network and distribution expansion plans, driving continued strong growth in ARPUs across voice, data and mobile money.

“We have also seen further improvement in our customer growth trends for the group with Nigeria returning to strong customer growth,” the chief executive of Airtel Africa, Mr Segun Ogunsanya, stated.

In the period under review, the operating profit of the firm grew by 43.1 per cent to $1.146 million in reported currency, while profit after tax almost doubled to $514 million as higher profit before tax more than offset associated tax charges, with the basic earnings per share (EPS) at 11.7 cents, an increase of 113.8 per cent, largely as a result of higher profit.

This good performance excited Mr Ogunsanya, who noted that, “I am particularly pleased with developments in Nigeria, where in November we received approval in principle for both a payment service bank (mobile money) licence and a super-agent licence.”

“We are now working closely with the Central Bank (of Nigeria) to meet all its conditions to receive the final operating licences and commence operations.

“This will enable us to expand our digital financial products and reach the millions of Nigerians that do not have access to traditional financial services,” he assured.

He disclosed that the company “continued to strengthen our balance sheet, with our leverage ratio now 1.4 times underlying EBITDA, thanks to both to continued increases in operating cash flow delivery and to over $550 million of cash that has now been received from minority investments into our mobile money business.”

“We will continue to invest in expanding and evolving our platform to further deepen both financial and digital inclusion across Africa. I continue to see huge growth potential across voice, data and mobile money and our strategy is delivering against this opportunity.

“Our sustained investments in both network and distribution expansion will help to ensure that both the communities and economies across our footprint will continue to benefit from increased and affordable connectivity and financial inclusion.

“We are committed to continuing to improve the delivery of our services to our customers, with sustainability at the heart of our continued purpose to transform lives across Africa,” he added.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Economy

19.2% Ease in FX Trades Bolsters Naira by 0.01% at I&E

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FX trades

By Adedapo Adesanya

A 19.2 per cent moderation in the value of foreign exchange (forex) transactions recorded at the Investors and Exporters (I&E) window of the FX market helped the Naira with extra weight to push down the value of the Dollar by 0.01 per cent or 5 kobo on Friday, June 24.

According to data obtained by Business Post from the FMDQ Securities Exchange, the exchange rate of the Naira to the Dollar at the market window was N420.12/$1 in contrast to N420.17/$1 it closed on Thursday.

The value of FX trades at the window was $162.98 million, $38.83 million lower than the $201.81 million achieved in the preceding trading day.

At the Peer-to-Peer (P2P) segment, the local currency further appreciated against the American currency by 0.32 per cent or N2 to trade at N618/$1 compared with the N620/$1 it was traded a day earlier.

But at the interbank window of the market, the Naira depreciated against the British Pound Sterling by N1.96 to trade at N510.02/£1 versus the preceding session’s N508.06/£1 and slid by N1.04 against the Euro to close the day at N437.60/€1 compared with N436.56/€1 of the previous day.

Meanwhile, the recovery recorded by TerraClassicUSD (USTC) in the cryptocurrency market on Thursday appeared to be short-lived as it lost 11.5 per cent on Friday to trade at $0.0100.

It was the only digital coin of the 10 tokens tracked by this newspaper to shed weight yesterday as Solana (SOL) posted a 10.3 per cent growth to settle at $42.28.

Ethereum (ETH) went up by 7.4 per cent to sell at $1,236.08, Dogecoin (DOGE) appreciated by 6.2 per cent to trade at $0.0691, Binance Coin (BNB) jumped by 4.3 per cent after a deal with Cristiano Ronaldo to quote at $241.40, Bitcoin (BTC) recorded a 2.7 per cent rise to trade at $21,508.22, Cardano (ADA) jumped by 2.6 per cent to $0.5053, Litecoin (LTC) leapt by 0.6 per cent to $57.02, Ripple (XRP) recorded a 0.07 per cent rise to trade at $0.3718, while the US Dollar Tether (USDT) gained 0.01 per cent to sell for $0.9995.

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Economy

NASD Exchange Closes Last Day of the Week 0.42% Higher

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NASD Investors' Portfolios

By Adedapo Adesanya

The last trading session of the week on the NASD Over-the-Counter (OTC) Securities Exchange closed on a positive note on Friday by 0.42 per cent.

This was influenced by the gains recorded by Niger Delta Exploration and Production (NDEP) Plc and Central Securities Clearing System (CSCS) Plc.

NDEP grew during the day by N18 or 10 per cent to close at N198.00 per unit compared to the previous day’s N180.00 per unit, while CSCS Plc rose by 20 kobo or 1.37 per cent to close at N14.80 per unit as against the N14.60 per unit it was previously sold.

At the end of the day’s trading, the NASD Unlisted Securities Index (NSI) gained 3.24 points to settle at 768.27 points compared with the earlier day’s 765.03 points.

In the same trend, the bourse’s market capitalisation closed at N1.011 trillion as investors expanded the total value of securities on the platform by N4.27 billion. On Thursday, the market capitalisation stood at N1.007 billion.

At the market, the total volume of shares bought and sold by investors increased by 251.7 per cent to 323,519 units from 91,997 units, the total value of transactions appreciated by 53.1 per cent to N8.9 million from N5.8 million, while the total number of trades went down by 15.4 per cent to 11 deals from 13 deals.

AG Mortgage Bank Plc finished the trading week as the most traded stock by volume on a year-to-date basis with the sale of 2.3 billion units worth N1.2 billion, CSCS Plc also retained the second spot with the sale of 674.2 million units valued at N14.1 billion, while Food Concepts Plc was in third place for trading 146.0 million units valued at N126.7 million.

In the same vein, CSCS Plc maintained its position as the most active stock by value on a year-to-date basis with a turnover of 674.2 million units valued at N14.1 billion, VFD Group Plc was in second place with 10.9 million units worth N3.2 billion, while FrieslandCampina WAMCO Nigeria Plc retained the third place with the sale of 9.6 million units valued at N1.2 billion.

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Economy

Oil Market Jumps 3% on Tighter Supply

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global oil market

By Adedapo Adesanya

The oil market improved by about 3 per cent on Friday, supported by tighter supply, with the Brent crude futures growing by $3.07 or 2.8 per cent to $113.12 a barrel and the US West Texas Intermediate (WTI) crude futures expanding by $3.35 or 3.2 per cent to $107.62.

Despite the bullish news on Friday, the black gold notched its second weekly decline on concerns that rising interest rates could push the world economy into recession.

The already tight market was further impacted as crude production dropped 45 per cent in less than a decade, currently averaging 275,000 barrels per day as protests of indigenous nationalities of Ecuador demanding fuel subsidies saw them invade and vandalize at least a dozen of oil fields and risk pipeline supply to the country’s ports.

Indigenous leaders have presented the government of President Guillermo Lasso with a list of 10 demands, including a freeze on national gas prices, greater investments in education and healthcare, and more jobs.

In an unprecedented turn of events, the world’s most-watched oil data report on inventories from the US was not released this week due to a power problem.

The Energy Information Administration (EIA) hopes to shed more light on the reasons for the delay next Monday.

Meanwhile, the US Federal Reserve’s unconditional focus on taming inflation continues to squeeze speculators out of the Brent and WTI futures contracts.

The US Federal Reserve Chair, Mr Jerome Powell, said the central bank’s focus on curbing inflation was “unconditional”, adding to fears about more interest rate hikes.

Russia’s invasion of Ukraine exacerbated tight supplies this year just as demand has been recovering from the COVID pandemic.

Crude has also gained support from the almost total shutdown of output in OPEC member Libya due to unrest.

On Thursday, the Libyan oil minister said the National Oil Corporation (NOC) chairman was withholding production data from him, raising doubts over figures issued last week.

The Organisation of the Petroleum Exporting Countries and its allies, known as OPEC+, meet on June 30 and are expected to stick to a plan to only slightly accelerate hikes in oil production in July and August.

US energy firms added oil and natural gas rigs for a second week in a row in a record 23-month streak of increases, as high crude prices and prodding by the government prompted drillers to return to the wellpad.

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