American tower firm takes Sh953m revenue hit on weak shilling

American Tower Corporation CEO Thomas Sonesson

American Tower Corporation CEO Thomas Sonesson before the Senate Committee on Information, Communication and Technology at the County Hall Nairobi on December 1, 2023. PHOTO | COURTESY

Photo credit: Dennis Onsongo | Nation Media Group

The American Tower Corporation (ATC) has revealed that it took a hit of $6 million (Sh956.4 million) from converting its sales in Kenya into US dollars in the nine months to September 2023 due to the depreciation of the Kenyan shilling.

The company through its local subsidiary ATC Kenya owns some 3,645 telecommunications towers in the country which it leases to local mobile network providers.

“Africa property segment revenue decrease of $9.7 million was attributable to decrease of $71.7 million attributable to the impact of foreign currency translation, which included, among others, negative impacts of $55.5 million related to fluctuations in Nigerian Naira, $9.1 million related to fluctuations in Ghanaian Cedi and $6 million related to fluctuations in Kenyan Shilling,” said ATC in its latest results.

Kenya is one of ATC’s top markets globally, with revenue from its operations in the country having risen steadily in recent years to $123.1 million (Sh19.6 billion) in 2022 up from $107.4 million (Sh17.1 billion) in 2021 and $97.7 million (Sh15.5 billion) in 2020.

The company came into the limelight last year after it switched off half of its telecommunications towers which it had leased to Telkom Kenya.

The shutdown of the towers came after Telkom, which continues to struggle financially, defaulted on paying lease fees to the company leading to a standoff.

ATC bought 715 towers from Telkom in 2018 at a cost of $155 million (24.7 billion at current exchange rates) and leased them back to the telco.

The American company’s hit from the depreciation of the Kenyan shillings highlights the plight of foreign firms that are operating in Kenya which incur losses from translating their revenue from the local currency into foreign currency.

The Kenyan shilling has been in a free fall against the US dollar for more than two years as the country continues to witness a flight of the green back from the economy due to higher interest rates being offered by the US Federal Reserve.

Firms have also been struggling to source foreign currency to repatriate their earnings amid a forex crunch that has further weakened the shilling, which hit a low of Sh159.8 against the US dollar yesterday.

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