Airtel Africa Q3 2023 Update

Airtel Africa Q3 2023 Update

November 1, 2023

Airtel Africa (AAF) reported earnings on October 30 ,2023. Results were strong with 19% constant currency revenue growth and 20% constant currency EBITDA growth. Revenue on a reported basis was down 4.7% y/y while EBITDA was down 3.3% on a reported basis. Currency devaluation was a challenge. The biggest driver of the currency headwind was the Nigerian naira which was devalued by 51.7%. As we get into the second half of next year, the currency impact should moderate as we annualize the devaluation of the Nigerian currency. Over the past 5 years, Airtel Africa has been able to grow revenue by 17% annually in constant currency and 10% annually on a USD basis. As a result, the company has been able to grow EBITDA by 13% per year over the same time period. Airtel‘s current valuation of 3.3x forward EBITDA doesn’t make sense to me. I think the stock looks compelling given secular tailwinds.