Airtel Africa has published a decent set of Q4 results. Top line performance remained strong, service revenue growth in local currency came in above consensus expectations and above our expectations. EBITDA trends slowed (but remained decent given the macro context in Q1) and margins came in 1pp below consensus and us.
MTN Rwanda has reported a slower set of Q1 numbers. Revenue and EBITDA continue to be impacted by the MTR cut and margins were also impacted by the One Network Area initiative and to a lesser extent by the depreciating RWF vs. the USD.
MTN Ghana has reported a good set of Q1 results. Service revenue growth accelerated and continued to grow well above inflation. EBITDA trends slowed but remain solid. Capex intensity was down vs. Q1 last year. Medium guidance for Service Revenue growth (“high twenties %”) has been reiterated. The macro is expected to remain challenging in 2024. However, there has been an encouraging slow down in inflation over Q1.
H2 was a better semester for the SA Telcos. Service revenue and EBITDA trends improved and capex – while still above historic levels – was contained. However, improvements were modest as the environment remains difficult and growth remains limited.
We deep dive on African Telco’s Fintech valuations in this note which is a follow up of our higher-level note Show me the (Mobile) Money. African Telcos are becoming more active about unlocking value from Mobile Money (MoMo) with MTN’s recent deal with Mastercard and now rumours that AAF is looking to IPO its MoMo business. Global Fintech/Payments multiples have derated over the past couple of years, but we continue to see great value in the African Telco’s MoMo assets which remain one the key n...
MTN Rwanda has reported a solid set of Q4 numbers on an underlying basis (NSRe). Reported service revenue growth decelerated vs. Q3 impacted by the MTR cuts but EBITDA growth accelerated. Mid-term guidance for service revenue growth has been reiterated (“mid-teens service growth”) and the company targets a stable EBITDA margin.
MTN Nigeria reported Q4 results on Friday and held its earnings call yesterday. For our take on the results, including call feedback please click on the link below. We also provide our take on MTN Ghana which reported Q4s a day before MTN Nigeria.
Airtel Africa has published a solid set of Q3 results with both revenue and EBITDA trends accelerating in local currency. Margins over the first nine month of the year are trending above 9m23 which is in line with the message given in Q2.
2023 was a relatively tough year for African Telcos, with strong macro headwinds driving currency weakness and cost pressures. With inflation starting to subside some of this pressure is easing, although some African currencies may continue to weaken.
Q3 was a decent quarter for Sub-Saharan African (SSA) operators. Fundamentals remain strong. We have updated forecasts post Q3 results, and our recommendations and target prices remain unchanged, except for Safaricom. AAF remains our preferred play in Africa.
Market service revenue growth slightly slowed but remained robust in Q3. Both MTN and AAF managed to grow underlying service revenue just above 20% YoY, which is a solid performance given the current macro-economic pressures and the absence of price increases.
FX Devaluation Hinder Revenue Growth In its recently released H1:2024 financial result, Airtel Africa Plc (AIRTELAFRI) posted a marginal increase in its consolidated topline in reporting currency. Overall Revenue increased by 2.28% YoY in H1:2024 (vs. 12.88% YoY in H1:2023). This slowdown in growth can be attributed to currency devaluations across markets in all its regions of operation. In Nigeria, the effect of the FX liberalization policy—which resulted in a sizable devaluation in June 2023—...
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