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Started: Casshy, 20 Jun 2024 12:27
Last post: Casshy, 20 Jun 2024 12:27
And the price is up....good result....
Started: MaryBr190, 19 Mar 2024 13:00
Last post: MaryBr190, 9 May 2024 15:36
Looks like there are looking through the results and heading back to to 130p levels,
It looks like it would have been a decent set of results, were it not for the significant currency issues.
Agree
but half a billion is a big exceptional
Loss after tax was $89m, primarily impacted by significant foreign exchange headwinds, resulting in a $549m exceptional loss net of tax following the Nigerian naira devaluation in June 2023 and Q4'24, and the Malawian kwacha devaluation in November 2023.
The currency conversion issues shouldn't be as bad in next results...
I was tempted to top up but it didn't fall as low as my average..... will watch and wait and hope for another opportunity
Deutsche Bank initiates Airtel Africa with 'buy' - target 160 pence
Started: Qd22, 16 Mar 2024 16:37
Last post: Qd22, 16 Mar 2024 16:37
"FINTECH FRENZY: Tap Into Africa's Mobile Money Boom".
In the 'what to buy' section Airtel Africa is described as "one of the purest plays on the market". The other LSE option mentioned was Wise.
Started: Fishinggardener, 29 Feb 2024 00:26
Last post: pedro61, 29 Feb 2024 14:56
Swings and roundabouts of inflation and currency have many different sides that have opposing viewpoints,but, increasing numbers using the products cannot hide the direction of the company...Well up.....and consistently up...A bargain at this market cap....
The Naira is down another 3% this week.
Today, you now only get £485 for 1,000,000 Nigerian Naira. At the start of the current financial year this figure was closer to £1,760.
So as we enter the new Financial Year, conversion of the Dividend, (which is declared in USD) and any of the various calculations that one might use to calculate Enterprise Value, (which we trade in GBP), is now diluted to one quarter of what it was 12 months ago.
I appreciate that Nigeria makes up only about 35 -40% of the Groups overall operations, but it should also be borne in mind that in the first 6 months of the current year, 12 out of the other 13 African nations in which Airtel have a presence also experienced a currency devaluation; with three of these (Zambia, Kenya and Malawi), being between 10 and 20%. Only the Central African Franc provided a token Re-valuation to counteract the other 13.
Airtel is a great business, and has delivered sustained growth in their year on year financial performance over the 6 /7 years that I have been invested. Ever expanding coverage, more services, and a mobile banking capability is great if you are a customer paying in Naira, or an employee being paid in Naira, or a supplier invoicing in Naira.
Yes, Nigeria might be the fastest growing economy in Africa, and Yes, the population may double over the next 25 years, but the fact remains that, going into FY '25, the returns on our investment (be it dividends, or Valuation of the Enterprise, which translates into share price), is now calculated at just c25% of the exchange rate that it was a year ago, on what is the cornerstone network in their portfolio.
Usually, when it comes to selling I am hopeless at converting intuition, into action. But in the case of AAF, in the past week I have sold c85% of the c50k shares that I had.
Have I been too rash?
The one possible saving grace is that the Dividend cover has been 3x., and this may be enough to afford what will be part year effects of the recent devaluations, - but for the year that is just about to start, it will be this time next year, before we know whether the full effect has been priced into an SP of c95p.
Started: Riskass, 21 Feb 2024 10:19
Last post: Realist1, 23 Feb 2024 00:08
According to Bloomberg, Nigeria's economy grew faster than anticipated in the fourth quarter of 2023 so, with regard to Airtel, we can only hope that the bad news has now been priced in. No shortage of internal issues in Nigeria though.
R_hnew
Nigeria accounts for 40% of their business/income..it was by far their biggest customer base. That's why it has had such an impact.
@ r_hnew/ I've been to Africa, several times, tho I haven’t been to Nigeria, I have been to Ghana which pretty close considering the size of Africa, a slave coast originally which I travelled most of going up lake Volta, the one thing I saw in my journeys is lots of them had phones even though they lacked many other needs.
This may be a blip as many countries suffering due to many variables in our current setting but if you read the link I provided which the information has been based on statistics: Nigeria is the biggest economy in Africa and one of the world’s fastest growing economies – predicted to be in the top 20 by GDP by 2035. It is also predicted by the UN to nearly double its population to over 370 million people by 2050
AAF operate across 14 African countries why would Nigeria alone drag it down the extent it is currently languishing at? If the Kemi deal is to be believed then why the the following article
https://www.thecable.ng/consumers-no-longer-able-to-afford-bottle-of-beer-nigerian-breweries-ceo-speaks-on-fx-crisis/amp
Is a mobile phone more important than a beer? “Probably”. (Now where have I heard that before 🤔)
This may also add to the disconnect in the share price announced 20th
https://developingtelecoms.com/telecom-business/telecom-regulation/16243-regulator-investigates-atc-airtel-africa.html
Good luck all….
Kemi Badenoch to sign first-of-its-kind trade and investment partnership worth 7 billion
https://www.gov.uk/government/news/uk-signs-landmark-economic-partnership-with-nigeria
Started: tedtfe, 19 Feb 2024 11:54
Last post: Realist1, 20 Feb 2024 13:39
This article tells you the severity of the situation. The Naira has experienced a 230% drop in value over the past year. The joys of investing in Africa. I would not bank on a quick turnaround either. The South African Rand has been on a steady decline for 40 years.
https://www.voanews.com/a/nigeria-grapples-with-soaring-inflation-plummeting-currency-/7492283.html
Thanks Fishinggardener. I didn't appreciate the devaluation was that severe - on your figures it's almost 70%, truly shocking over such a short period. I think you are right that devaluation is a feature of investing in Africa which has to be taken into account by investors, but the severity of the current situation is unusual - probably a symptom of worldwide economic malaise (apart from the US which seems to be doing fine, further worsening currency issues for AAF)
Naira watchers. On the assumption this continues, there will be an opportunity again in this stock. I see the brokers bandwagon has started again so will add when it falls and trim when it rises. Aiming for a near £zero cost holding and the volatility in this SP may well help me achieve that ahead of target.
Not for widows and orphans.
My Web link didn't seem to convert into my post, so I have copied the relevant paragraph below here:
Analysts' forecasts are presented on a 'reported currency' basis. These include inherent
assumptions for currency forecasts which are specific to each individual broker. In our
latest results report for Q1'24, Airtel Africa highlighted the following currency sensitivities:
"The expected annualised impact of the devaluation in Nigeria incurred in the month of
June 2023 is expected to be between $850m and $900m on annualised revenues, and
between $450m and $500m on annualised EBITDA. With respect to currency devaluation
sensitivity going forward, on a 12-month basis, a further 1% USD appreciation across all
currencies in our OpCos would have a negative impact of $48m on revenues, $24m on
EBITDA and $21m on finance costs (excluding derivatives). Our largest exposure is to the
Nigerian naira, for which a further 1% USD appreciation would have a negative impact of
$14m on revenues, $8m on EBITDA and $7m on finance costs (excluding derivatives). This
sensitivity analysis assumes the USD appreciation occurs at the beginning of the period."
More detail on this is in the investor section of the Airtel Website, and this particular page is under "analysts and Concensus" tab, at the far right of the menu options. (you have to scroll along to the right!), and then look under the link to "Consensus Forecast Data".
I am and have been a long term holder of AAF - to date as a business they have done really well over the past 5 or 6 years. - growing their customers, expanding their territories of operation, and bringing to market a great "mobile banking" product.
But i think that a problem is looming, and so, this morning, I have sold one third of my holding, and am debating reducing it further.
In FY 24 (The current Financial year), there have been two devaluations of the Nigerian Naira.
In April '23, 1,000,000 NGN converted into £1,740 GBP. Today, 1,000,000 NGN will convert into just £535.
The devaluation affects 1 out of 14 countries in which AAF has an operation, but it is their biggest market by far.
Take a look at the following link, which is a page on the investor section of the AAF web site. It is from the consensus of the ~6 brokers who follow the Company. It suggests that the effect of the Naira devaluation is going to be more than just a headwind. It will seriously impact revenues, EBITDA and Profits.
https://cdn-webportal.airtelstream.net/website/investor/main/pdf/20231004_Analysts'_consensus_vFinal.pdf
So the result for the current year is going to be significantly worse than FY '23. You can build a quarter by quarter analysis by looking at the most recent quarterly results RNS. With the second devaluation only occuring with 7 weeks of this FY remaining, my rough calculations suggest that there will be enough Free Cash Flow to cover a Flat dividend, if that's what the board felt able to do - but it would be a massively reduced cover.
My issue is the outlook for FY '25.
The effect of the two most recent devaluations will have a "whole year" effect on the business starting in April 2024, and this, I think will wipe out all the "good" down by the growth in the business, when it comes to converting their trading performance into a USD denominated dividend.
Mary BR suggests that currencies will bounce back, but generally speaking I don't think that there is much form for African currencies re-valuing against the USD / GBP. - very happy to be corrected on this!.
So, my view is that the business is achieving commendable growth, but given the sensitivities of their financial performance record, and in particular the dividend payouts, we have seen enough damage been done, to snuff out the upside of all the growth for this year and next, and my worry is that with high inflation and interest rates in Nigeria, there is every possibility that further devaluations will occur.
Started: MaryBr190, 16 Feb 2024 09:39
Last post: MaryBr190, 16 Feb 2024 09:39
Interestng article - seems just currency headwinds impacting reported figures - the currency losses will reverse and become currency gains again.
When this happens suprcharging all the way back to the 120s/130s.
Buy low sell high - an opportunity here perhaps but DYOR.
Started: MaryBr190, 16 Feb 2024 09:30
Last post: MaryBr190, 16 Feb 2024 09:30
Started: HorisM, 12 Feb 2024 15:01
Last post: MaryBr190, 16 Feb 2024 08:52
We are all followers of the Naira now.
Adding on further weakness as during 2024 this will be up - strong growth story.
Nice big buy
12-Feb-24 15:22:00 102.00 1,979,000 Unknown* 102.00 102.20 2m O
Price Consolidated = ready for a move back up
Started: HorisM, 12 Feb 2024 15:06
Last post: HorisM, 12 Feb 2024 15:06
Started: swingman, 31 Jan 2024 10:27
Last post: Shark41, 1 Feb 2024 17:55
@swingman
As @blahblahdoh states, the CEO hasnt been sacked. He will become the chair of the groups charity arm. I understand he is very passionate about that and the company undertake many projects to support local communities.
They haven't "sacked" Olusegun Ogunsanya , he is retiring in July and becoming the head of their charity organisation. His replacement, Sunil Taldar, has already worked for the parent company for 15 years, so no real reason to expect a radical change in direction based on his appointment. The family have always owned most of the company, which is really a spinoff from their main Indian operation. They started with 100% before deciding to launch it on the London market - recent purchases may seem like a large amount of money to you, but to them it's just a small additional percentage. It's probable that they just see the SP as good value at current levels. Unless you expect the Naira to be devalued every year, the growth here remains spectacular. We should, unfortunately, expect devaluation from time to time though (-:
Yes it's. bit strange since the large buy by the family at a large discount, it has started dropping. Very little news about the company in any press. This FT100 company dropped over 10% no mention anywhere.
Thanks swingman
I was wondering what was going on with this share.
It has had a dramatic drop lately
The family members and friends now own more than 72% of the company. They have been busy buying out all major shareholders at a discount. It appears the new may be announced with the results tomorrow as they have already sacked the CEO who was a figurehead since his appointment. Now another friend is coming in on 1st July and taking it Private may happen at the same time.
May be time to fill the boots before tomorrow as the news come out with the offer to purchase remaining shares at a small premium. I guess is may around 125 -130 as they already have most.
Last post: BlahBlahDoh, 7 Jan 2024 18:50
I'd say the chances of a bid here are approximately zero. It's basically a family business executing a long-term growth strategy. Far more likely to be acquiring than divesting, imo
I'm expecting a bid here. I could be wrong as well!
Started: Evanescent, 14 Dec 2023 14:37
Last post: Roofer61, 15 Dec 2023 10:27
Predictable as ever , Sp dropped prior for paydate for reinvested dividends up a good 10% now , paying a premium today...atb
No Evanescent, that's not quite correct. The founding Bharti family have always been overwhelming controllers of this company, they own close to 70% of it now, and it's really a offshoot of the Indian parent company. Interesting that they have been increasing their stake slightly this month though - presumably they think it is undervalued
Am I right in thinking that since "Bharti Overseas Private Limited" have crossed the 15 % threshold that they must now declare their intentions regarding Airtel Africa?
Bid coming?
Started: Chrisbish, 30 Oct 2023 09:54
Last post: RUILLIONOTE, 9 Nov 2023 09:26
I recall thes at 73p, not sure they will ever drop there again. Only in a crash of some kind. Good stock otherwise.
Yep OK results, but main point 9% increase interim dividend...atb
Excellent set of results.
Well it hasn't. That's a surprise isn't it.
Regardless, this is a pleasant surprise. Let it continue
Not sure why there has been a nice rise here. But welcome it is.
Where have all the good times gone? Quite appropriate. I prefer the Van Halen version but there you are...
Good trend indeed. Where will it top though and indeed why is it getting going now?
Where have all the posters gone (song somewhere there) solid upwards trend
Started: Mulder, 28 Jul 2023 13:25
Last post: Mulder, 28 Jul 2023 13:25
.
Started: Mulder, 27 Jul 2023 21:36
Last post: Capitalizer, 28 Jul 2023 10:06
Market seems to like the update
Adjusted P/E here is around 5.
FX issues out of their control.
Started: jimbo123elf, 22 Jun 2023 08:29
Last post: Capitalizer, 27 Jul 2023 15:53
Yeah ... that's what I thought: Italy 'used' inflation to reduce debt burden in the 80's but in the process became poorer. They then thought the Euro would cure their woes but ... well .... "Ciao, Silvio!"
Actually, looking a bit deeper, I was wrong about Italian devaluation - it did constantly devalue against the ERM (effectively the Deutschmark) during the '80s when trying to control inflation. The Nigerian situation looks different. The effect of these measures are not easy to predict, but .
Informative. Thanks BBD
" Isn't that what Italy did with the Lira in the 80's?"
No it isn't. What China did in the '80s might be a better match? Nigeria had a complicated dual value system which kept the currency artificially high. Removing that system allowed the currency to find it's "real" market value and hopefully makes business simpler and more predictable. That's why the company has welcomed it. I don't think Italy did devalue anyway (?), the lira was just very weak and had been since the war. Also, Italy boomed in the '80s - in 1987 their economy was bigger than the UK.
Devalue your currency and inflate your way out of trouble? Isn't that what Italy did with the Lira in the 80's? Is the Naira the new Lira?
Started: Broom67, 26 Jul 2023 19:47
Last post: Capitalizer, 27 Jul 2023 09:39
Already priced in imho
I suspect results will be dire .. Balance sheet ( debt) will be valued at current exchange rate , causing huge currency loss in quarter ... bad news out of way once that initial revaluation happens, debased and set for growth, but suspect the initial results shock will hit SP badly
Started: jimbo123elf, 26 Jul 2023 23:44
Last post: jimbo123elf, 26 Jul 2023 23:44
Soldiers appear on state TV in Niger, say President Bazoum has been removed and the borders are closed. AAF is the market leader in Niger.
Started: Filmster, 19 Jun 2023 08:34
Last post: Robina, 20 Jun 2023 21:20
One would think Airtel are aware of whether this currency issue will continually erode value.
That was a quick rise and dump, this share does seem to get easily manipulated.
Started: Casshy, 13 Jun 2023 08:55
Last post: Casshy, 13 Jun 2023 08:56
I meant £8k!!
Up £8 since April and we still have the climb to ex dividend date at the end of June...one of my better investments...Vod/BT/Nokia/Spirent not so!!!!...that's what they call hedging your bets!
Started: Rogue_rader, 2 Jun 2023 23:02
Last post: Rogue_rader, 2 Jun 2023 23:02
A nice Analysis of Airtel Africa: https://www.youtube.com/watch?v=lIRNiHkhrrQ
Started: Casshy, 11 May 2023 16:45
Last post: Robina, 12 May 2023 14:42
It can happen every year. We are talking about Africa after all.
Rho losses are due to currency devaluation against $ for most African countries and hence reduced profit. This can't happen every quarter /year. So I expect very high bottom line from next quarter. Hold-on tight
Bharti Airtel’s Africa business reported a net profit of $227 million in the fiscal fourth quarter, down 6% on year......yet Airtel Africa’s net profit, though, was 17.6% higher sequentially in January-March....and we get hit by 8%.....came back a little but surprised...holding for the dividend....!!