Airtel Africa and Safaricom recently released their financial statements for the 2023/2024 fiscal year. This year saw Safaricom Kenya post Ksh139.9 billion ($1 billion) in earnings before interest and tax (EBIT) – a record first for any company in the EA region to hit $1 billion in annual earnings. Airtel Africa, a pan-African telco, saw its revenue drop by 5.3 percent to $4.98 billion in the same period despite user growth.
In this analysis, we examine how Airtel Africa and Safaricom compare on various metrics while noting that the two telcos have different scales of operation. Safaricom group has a smaller presence on the continent with two subsidiaries: Safaricom Kenya and Safaricom Ethiopia. On the other hand, Airtel Africa has a presence in 14 countries across the continent.
Safaricom Group vs Airtel Africa comparison
Safaricom Kenya posted $Ksh187.0 billion ($1.4 billion) EBITDA. This is almost half that of Airtel Africa, but again, have to point out that Safaricom has a smaller presence on the continent. In total, Safaricom Group posted revenues of Ksh94.9 billion ($720.7 million) with Safaricom Ethiopia’s increased startup and investment costs bitting into the revenue. Safaricom Ethiopia closed its book reporting a net loss of Ksh42.09 billion during this period.
Airtel Africa’s earnings before interest, taxes, depreciation, and amortization (EBITDA) declined by 5.7 percent to $2.43 billion. The company further adds that the EBITDA margins “remained resilient at 48.8% despite the currency headwinds and inflationary pressure.” The 46.5 percent Q4’24 EBITDA margins were impacted by Nigeria’s lower contribution following the naira devaluation and rising energy costs across several markets, per the company.
The telecom recorded $89 million in loss after tax citing foreign exchange headwinds in Nigeria and Malawi. Airtel Africa further explains that the Nigerian naira devaluation in June 2023 and Q4’24, coupled with the Malawian kwacha devaluation in November 2023 resulted in a $549 exceptional loss net of tax.
“The consistent deployment of our ‘Win with’ strategy supported the acceleration in constant currency revenue growth over the recent quarters which has reduced the impact of currency headwinds faced across most of our markets.” Olesugun Ogunsanya, Airtel Africa CEO, shared in a report.
According to the CEO who is set to retire in June 2024, the company had to take additional steps to mitigate risks that the currency devaluations posed. This included the reduction of US dollar debts across the business and the accumulation of cash at the HoldCO level to fully cover outstanding debt due.
Additionally, the telco launched its buyback programme to strengthen its financial position. As of March 2024, the company had purchased 7.4 million shares worth $9.0 million.
How their mobile services compared
Safaricom’s mobile money platform, M-PESA, largely contributed to the Group’s overall service revenue. The mobile money service total earnings stood at Ksh139.9 billion, representing 42 percent of the Group’s overall service revenue.
Airtel Money services contributed 16.8 percent of the Group’s total revenues. With a customer base of 32 million, Airtel Money recorded $112 billion in annual transactions in the year to March 2024.
In contrast, Safaricom’s M-PESA recorded Ksh40.2 trillion ($306.89 billion) in transactions. More notably, the proportion of P2P transfers of MPesa’s total value of transactions grew for the first time since FY2019. Lipa na Mpesa as a proportion of the total value of MPesa transactions reported its slowest growth since FY2019. The financial year ending March 2024, also recorded a relatively slow growth in the number of MPesa merchants.
Kenya’s largest telco reported a 1.7 percent decline in voice revenues to Ksh79.5 billion. Messaging revenues however increased by 8 percent to Ksh12.3 billion. With the total number of subscribers increasing to 34.4 million, the group recorded a Ksh422.7 average revenue per user per month (ARPU).
Airtel Africa saw its voice and data be among the leading contributors to its overall revenues. The group reported $2.18 billion and $1.73 billion in voice revenue and data revenues respectively. Data customers grew by 17.8 percent representing 42.8 percent of the group’s total customer base.
Airtel Africa user growth
The telecommunications company saw its customer base grow by 9.0 percent to 152.7 million largely influenced by a 17.8 percent growth in data customers to 64.4 million. Additionally, there was a 20.8 percent increase in data usage per customer.
Airtel Africa mobile money subscribers grew by 20.7% with the company attributing this growth to its “continued investment into distribution to drive increased financial inclusion across our markets.” Increased customer adoption saw the telco report an annual transaction value of over $112 billion, translating to a 38.2 percent increase.
“The growth opportunity that exists across our markets remains compelling, and we are well positioned to deliver against this opportunity. We will continue to focus on margin improvement from the recent level as we progress through the year.” The CEO further added.
