Airtel Africa, a dual-listed company on the London and Lagos Stock Exchanges, has reported a sharp growth in its Francophone markets over the nine months ending December 2023.

The company revealed that countries such as Chad, the Democratic Republic of the Congo, Gabon, Madagascar, Niger, Congo, and Seychelles collectively generated an operating profit of $203 million. This represents an 8.5% increase compared to the previous year.

This performance outshines the growth in East African markets, which saw a 1.2% increase, and Nigeria, where margins declined by 22.8%. Airtel Africa attributes the revenue decline in Nigeria to an average devaluation of the Naira by 64.7%. In East Africa, there was a nominal revenue increase of 8.5%. However, adjusted for exchange rate fluctuations, the real growth would have reached 21.2%, impacted by the devaluation of local currencies like the Zambian Kwacha and Kenyan Shilling.

Despite these monetary challenges, Nigeria and East Africa remain significant business pillars for Airtel Africa, which successfully expanded its customer base to 151 million users, including 62.7 million for internet services and 37.5 million for mobile money services.

However, the company faced a substantial $50 million gap between analysts' revenue forecasts and reported results, indicating less robust performance than anticipated. Coupled with a limited volume of available shares – with Airtel directly and indirectly controlling 71.5% of stakes – Airtel Africa may be less appealing to frontier market investors.

Major shareholders such as Warburg Pincus, Qatar Holdings, and Singapore Telecommunications remain committed long and medium-term investors. Despite a market valuation of $5.04 billion, suggesting undervaluation according to some analysts, Airtel Africa plans a $100 million share buyback program in March 2024, representing 2% of its market value. This operation will primarily benefit institutional investors, given the low number of retail investors.

A financial analysis of Airtel Africa reveals a company navigating economic challenges with a strategy focused on expanding its user base and creating value for shareholders. However, for a comprehensive assessment, it is crucial to consider broader economic impacts, telecommunications industry trends, and Airtel Africa's competitive position.