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Bought as per members advice
Thanks for the input
P
"The HoldCo debt is substantially reduced by I assume it’s all now sitting at OpCo level…while I assume this has some benefit beyond being able to give a (potentially) misleading leverage figure for HoldCo it certainly doesn’t help the average PI assess how much debt the company actually has across all of its subsidiaries, nor indeed the cost of financing all that debt."
While some debt has been moved from the holding company to local ones, I think this is in addition to the reduction of overall debt caused by redeeming bonds, paid for out of sales of infrastructure. The strategy saves the company money, I think, by cancelling expensive US dollar debt, and by transferring OTHER debt to cheaper local interest rates.
I agree that the state of AAFs finances are somewhat difficult to assess, and many investors probably avoid them for that reason, but the underlying growth and profitability are surely clear enough.
close 125, over reaction yesterday, proven growth
Those just moaning about the share price should bear in mind the company has raised cash this year to fund growth. AAF is in an expansion phase and things could look quite different next year when dollar strength begins to weaken. Things could happen quickly. I view c.110 as a good entry point.
Many thanks for your input…
I will try and get in… After Amazon disappointing results, it may be an good opportunity to buy in discount
pmehta: I would say this is an excellent opportunity and I'm going to be taking it tomorrow morning. I sold out some time ago at 1.65, not because I thought there was anything wrong, I needed the money for another project. I think the fundamentals here are extremely strong. It is a growing business in a growing sector in a growing market. Interestingly, the two slight reservations I had about this share were the low dividend( now raised albeit not a massive rise) and the fact that it generates profit in jurisdictions that have currencies which are weak against the dollar. As others have pointed out, that neither detracts from the future potential nor is a factor that will last for ever.
DYOR.
"by far and away the worst performing stock I still hold in last 12 months."
Really? According to HL, this is up 28% over the last year. Are all your other stocks doing FAR AND AWAY better than that? Congratulations!
I had no experience of this stock
Only came to my notice because of fall today
Anyone knows the intrinsic value of this company
Regards
P
To be fair they did say currency de valuations could be a problem, which has proved true
But yesvway off saying to buy at £1.72.
Back up to at least 120p tomorrow. Market manipulation at its finest. 1/3 of trade volume after hours.
27-Oct-22 16:35:04 107.80 2,114,767 Sell* 108.10 108.50 2m UT ?
What is the Uncrossing Trade went through after close for 2.1m shares?
Alex, who can fa in fathom. I have s4 shares. Dropped from £2.30 to £1.10 in single day on results. Results seemed fine.
You can imagine how that felt. Anyhow now back to £1.80,s in a few months. Go figure.
Share price is flat over 12 months?
This is by far and away the worst performing stock I still hold in last 12 months.
It has been a constant disappointment. And I have to say I'm surprised.
I considered the growing market and what looked like reasonable figure as a good choice.
I'm surprised by the size todays drop (again) from the report.
The HoldCo debt is substantially reduced by I assume it’s all now sitting at OpCo level…while I assume this has some benefit beyond being able to give a (potentially) misleading leverage figure for HoldCo it certainly doesn’t help the average PI assess how much debt the company actually has across all of its subsidiaries, nor indeed the cost of financing all that debt.
I assume it’s buried in the results somewhere but the structure means it’s never easily found in the headline figures.
I am bit surprised that the so dropped so much after good result. But at the same time those been investing in companies in Africa should have known how the currency has dropped against dollar. It also applies all companies which operate outside US and report results in $. The dollar strength is not going to last forever and then it will show bumper profits. Sit and wait for a year and top up as I did this morning in the meantime enjoy the dividends.
I believe so, and have added at 116.5. Reserve currencies such as the USD should soften as market expectations of rate hikes slowing are realised. The worst of this should be over, and the results are otherwise healthy. We should not expect a rapid recovery, but this is a sound business with plenty of upside medium term
I think you are confusing different issues Alessandro. The finance costs are not to do with debt, but with derivatives and currency movements. If debt is your worry: "it has further derisked its balance sheet, having prepaid USD450 million in outstanding external debt to HoldCo."
https://www.lse.co.uk/news/AAF/top-news-airtel-africa-interim-profit-drops-as-finance-costs-grow-tzz9t45l1d8vkl9.html
Headlines: TOP NEWS: Airtel Africa interim profit drops as finance costs grow
What to expect from a company with such a massive debt
Thanks everyone who answered
African local currencies devaluing against reported currency may be an ongoing problem, but I suspect the derivatives issue is because of failed hedging strategy due to dollar strength.
The underlying business is growing strongly and looks set to accelerate, definitely an opportunity to buy in lower.
It's a very strong set of results other than the FX problems.
Presentation is here: https://airtel.africa/assets/pdf/H1-2023/Investor-Presentation-H1-2023.pdf
And the commentary on the 160m derivative loss is "Derivatives and forex losses were higher by $160m, as
a result of a $31m derivative loss, a Nigerian naira
devaluation impact of $30m, a CFA (Central African
franc) devaluation impact of $45m and the balance by
the devaluation in the Malawian kwacha, Ugandan
shilling & Kenyan shilling."
The problem is devaluation of currencies that they are holding. Really annoying as it is a stain on an otherwise stellar set of results imho. An opportunity to buy the dip perhaps?
DYOR
What's the story with the 'derivative losses' ....?