Airtel Africa breaks higher as growth accelerates

Airtel Africa’s (AAF) share price has continued its stellar start to the year, breaking to new trend highs on the back of an impressive set of Q3 results.

Revenue growth of 20.4% in constant currency terms highlights the company’s resilience, despite currency devaluations dragging on reported figures. Mobile money and data services remain the core growth engines, with revenues rising by 29.6% and 29.5%, respectively, as customer penetration deepens. EBITDA margins have expanded quarter-on-quarter, reflecting the early success of cost efficiency measures, while the company continues to strengthen its capital structure by reducing foreign currency debt exposure. A second $100 million share buyback programme reinforces the Board’s confidence in long-term growth, providing further support for the share price.

With signs of stabilisation in key currencies and the recent regulatory decision in Nigeria allowing tariff adjustments, the operating environment is starting to look more favourable. Airtel Africa’s focus on execution, network investment, and digital services is positioning it well to benefit from the structural growth story in its markets. As demand for connectivity and financial inclusion accelerates, investors are increasingly backing the company’s ability to sustain its upward trajectory.

AstraZeneca rides strong sales growth despite China woes

AstraZeneca (AZN) delivered an 18% jump in fourth-quarter revenue, beating analyst expectations despite a decline in sales in China and the arrest of its top executive in the country.

The company’s troubles in China remain a key challenge. Sales in the country fell 3% in the quarter, impacted by a mild winter reducing demand for respiratory drugs and budget caps at Chinese hospitals. AstraZeneca is also under investigation over suspected unpaid import taxes of $900,000, which could lead to a fine of up to $4.5mn. Meanwhile, the arrest of former China head Leon Wang in October, as part of a broader crackdown on the healthcare sector, has added further uncertainty. AstraZeneca has since appointed Iskra Reic to lead its China operations, aiming to stabilise its position in the market.

Despite these headwinds, AstraZeneca remains focused on long-term growth. CEO Pascal Soriot highlighted the company’s strong 2024 performance and pointed to upcoming late-stage trial results for seven new medicines. The firm plans to increase capital investment by 50%, boosting manufacturing and IT infrastructure, while raising its annual dividend to $3.20 per share. However, AstraZeneca’s UK operations faced a setback after scrapping plans for a £450mn vaccine plant due to a lack of government support. While challenges persist, the company remains committed to expansion, particularly in China, where it sees significant long-term potential.

Babcock surge on Q3 update and full-year expectations upgrade

Babcock International (BAB) saw its shares gap significantly higher last week following the release of an impressive Q3 trading update which included an upgrade to its full-year expectations for FY25.

The Nuclear division is a major driver of growth, benefiting from increased activity in civil nuclear new builds and decommissioning, as well as a rise in submarine support and infrastructure revenues. The Marine sector has also seen strong performance, buoyed by higher volumes in Large Government Equipment (LGE) and the ramp-up of the Skynet programme. These factors have collectively propelled Babcock to exceed the top end of analyst revenue and profit expectations for the year. The company’s strategic focus and operational excellence continue to attract strong demand for its engineering services both in the UK and internationally.

Notable recent developments include Babcock’s progress on critical defence projects. In January, HMS Victorious entered the 9-Dock facility at Devonport as part of a £560 million programme to modernise and refit the submarine, which plays a crucial role in the UK’s national defence. Additionally, Babcock is advancing the Type 31 Inspiration Class frigate programme and has secured a new 17-year contract with the French government for military air training solutions, marking a significant expansion of its operations in France. These developments underline Babcock’s growing portfolio of strategic contracts and reinforce its position as a leader in defence and engineering services.

BP rally following on Elliott Investment stake amid challenging results

BP (BP.) shares jumped on Monday following the news that activist investor Elliott Investment Management has taken a stake in the oil giant, although the exact size of the holding remains undisclosed.

Despite these setbacks, BP showed resilience, with an underlying replacement cost profit of $1.2 billion for Q4, bolstered by strong performance in its gas, low-carbon energy, and oil operations. The company’s operational focus and higher realisations helped mitigate the impact of weaker refining results. BP also announced a 10% increase in its dividend, with an 8-cent dividend per ordinary share, signalling continued shareholder returns despite the tough quarter.

Looking ahead to 2024, BP is placing a strong emphasis on restructuring its business and investing in high-potential projects, such as offshore wind partnerships and a gas joint venture. Alongside these efforts, the company has been focused on cutting costs, achieving $0.8 billion in structural savings, and maintaining capital discipline with a $1.75 billion share buyback program. These moves are seen as key steps in addressing the challenges faced in 2024 and positioning BP for long-term growth.