Zambia’s second-largest (by subscribers) mobile telecommunications company reports that it expects to record a loss when its half-year results for 2019 are published on 27th September 2019.
“In accordance with the Lusaka Securities Exchange (“LuSE”) Listings Requirements, the Board of Directors of Airtel Networks Zambia Plc (“Airtel” or “the Company”) hereby advises the Shareholders that the Company expects to report a loss and that the Earnings per Share (“EPS”) for the half-year ended 30 June 2019 is expected to be approximately 122.22 % lower than the half-year ended 30 June 2018”, read a statement issued on SENS by Sonia Shamwana-Chinganya, Airtel’s Company secretary on behalf of the board in Lusaka.
Currency depreciation is the main reasons cited by the company for the weakened performance. “The drop in the EPS is primarily attributed to currency depreciation year on year which have had an impact on the Company’s income statement”.
The Zambian Kwacha has lost over 20% ground against the US Greenback since the beginning of the year and now trades around K13 to USD 1.
At half-year 2018, Financial Insight reported that “on September 24th 2018 through SENS Announcement, its board issued a statement that its half-year highlights included a customer base that was up by 9.2% Year-on-Year and now stood at 5.36 million”.
Although the company advises its shareholders that the information contained in this Trading Statement has not been reviewed nor reported on by the external auditors of the Company, investors need to be aware of some of the macro forces that are impacting the company. In last year’s half-year report, they also indicated that competitive forces were rife. 2019 saw the announcement of another mobile company coming into their space. Despite the Angolan outfit not starting trading yet, competitive forces have eroded margins in the telecom industry.