Airtel Africa PLC on Tuesday said it welcomes changes made by the Central Bank of Nigeria to the country’s foreign exchange market.
The London-based, Africa-focused telecommunications company said the changes are a ‘positive move towards a more stable Nigerian FX market’, but noted that the US dollar has appreciated against the Nigerian naira, having a negative effect on the firm’s finances.
The company said a 1% devaluation of the naira would hit its revenue by $22 million, and lower earnings before interest, tax, depreciation and amortisation by $12 million over a 12-month basis.
In the year ended March 31, Airtel reported revenue of $5.26 billion, and underlying Ebitda of $2.58 billion.
Airtel Africa shares fell 1.0% to 122.30 pence each in London on Tuesday morning.
The changes include the abolition of segmentation, meaning that all segments now form part of the Investors and Explorers window, and the reintroduction of the ’Willing Buyer, Willing Seller’ model.
The firm said the market expects the new policy to provide greater dollar liquidity and ‘help to alleviate the challenges faced in the last few years to access US dollars in the market’.
Airtel said Airtel Nigeria is its largest market.
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