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Airtel Nigeria’s profitability has been significantly negatively impacted by a sharp 60 per cent rise in diesel prices in the nine-month period ending December 31, 2024, the operator said in its financial report released on Thursday.
The surge in fuel costs led to a notable decline in the company’s operating margin, which dropped by 557 basis points to 48.8 per cent.
This decrease reflects the ongoing inflationary pressures across its operations, particularly the increased cost of diesel used to power its network infrastructure.
The company’s financial performance for the period also revealed that the impact of higher diesel prices was compounded by a one-time operational expenditure benefit in the third quarter of 2024, which temporarily boosted margins.
Airtel Nigeria’s Earnings Before Interest, Taxes, Depreciation, and Amortisation stood at $360m, a 46.4 per cent decrease compared to the prior period, but a 20.6 per cent increase when viewed in constant currency.
The EBITDA margin also dropped to 48.8 per cent, down from 54.4 per cent in the same period last year, due to inflationary pressures and a 60 per cent increase in diesel prices during the period.
“Average diesel prices in Nigeria increased by approximately 60 per cent compared to the prior period. In Q3’25, EBITDA margins of 48.8 per cent were 645 basis points below the prior year levels, reflecting both the increased diesel prices and the $7m one-time operating expenses benefit in Q3’24.
“Adjusting for this one-time benefit, EBITDA margins in Q3 ’25 would have declined by 450 basis points from Q3’24 levels,” the report highlighted.
In September, the company disclosed that it was turning to solar energy as a cost-effective solution, as diesel costs had reached N28bn.
The telecom giant’s shift towards renewable energy is part of a broader strategy to reduce operational expenses and enhance sustainability amid Nigeria’s persistent energy challenges.
According to the National Bureau of Statistics, diesel prices averaged N1,426.09 per litre monthly in 2024, with telecom operators consuming over 50 million litres of diesel each month to fuel their infrastructure.
An analysis by The PUNCH in October revealed that major telcos, including MTN and Airtel, spent an estimated N71.3bn monthly on diesel, amounting to a staggering N570bn over the eight months from January to August 2024.
