Airtel Africa’s lease liabilities jump $1.2 bn post-contract renewals with US-based ATC

Recently, Airtel’s Africa system has been seeing strong organization rebirth and is anticipated to draw ahead of rival telcos operating in the African continent, including MTN, Vodacom and Orange, by taping the greatest profits growth in 2025, say analysts and sector specialists.

Experts, as a matter of fact, stated Airtel Africa’s efficiency in the December quarter, FY25, led quotes. “The favorable surprise was led by the Africa system’s net client additions of 6.5 million– up 5.4 x q-o-q– to 163 million and its ARPU too was up 4% sequentially to $2.4,” claimed CLSA in a study note.

“Under IFRS (International Financial Reporting Criteria) rules, the expansion has resulted in a $1.2 billion boost in Airtel Africa’s lease obligations (showing the NPV of the future lease settlements to be made), which has resulted in the spike in leverage to 2.4 x in Dec-24 from 1.3 x in 2014,” London-based NewStreet Study stated in a note seen by ET.

Recently, Airtel’s Africa arm reported an over 11-fold on-year enter net earnings to $169 million in the fiscal 3rd quarter, on the back of a $94 million remarkable gain activated by gratitude in crucial African money and a sharp loss in net finance expenses.

It added that near-term lease repayments would certainly be designated more towards rate of interest charges causing a higher preliminary influence on Airtel Africa’s P&L, which would progressively decline in subsequent years, however, there would certainly also be a little rise in the telco’s depreciation & amortisation (D&A) expenses, moving forward.

Goldman Sachs stated Airtel Africa reported strong 3Q25 outcomes with a 5% profits and Ebitda beat. “The outcomes came in above consensus throughout the board with East Africa tape-recording the most significant beat because of both greater growth and a lower-than-expected forex (FX) headwind.”

Airtel Africa’s rub is expected to be impacted by $120-130 million in year 1 of the lease. The business has suggested that there will certainly be a neutral-to-positive effect on cash circulation, with additional operating price benefits in the medium-term mirroring the emphasis on renewable energy releases.

According to experts, the expectation for Airtel Africa’s essential Nigerian organization is much brighter than before given the current authorization of rate boost by the Nigerian Communications Compensation (NCC). “This,. on its own, need to cause around a 5% acceleration in group profits development,” said New Street Study.

The lease responsibilities of Bharti Airtel’s Africa unit have actually raised by $1.2 billion following a 12-year expansion of its tower lease pacts with US-based American Tower Corp (ATC), which might cause some near-term stress on Airtel Africa’s upcoming incomes, state analysts.