FX Headwinds Lead MTN to N519bn Loss in Six Months

By Adedapo Adesanya

Telecommunications company, MTN Nigeria, recorded a loss after tax of N519 billion in the first half of 2024, higher than the N85 billion it lost in the exact period of 2023.

The telco disclosed this in its statement published on the Nigerian Exchange (NGX) Limited on Wednesday, noting that this was mainly due to Dollar-related obligations such as rent and financing costs.

The devaluation of the Naira and foreign exchange volatility ranging from the policies of President Bola Tinubu have significantly increased those costs. This is as it contends with an 18-year high inflation and 800 basis points increment in interest rates.

“The depreciation of the naira between the periods ended December 2023 and June 2024 also resulted in materially higher net forex losses of N887.7 billion (H1 2023 restated: N454.7 billion), arising from the revaluation of foreign currency- denominated obligations.

“This led to a loss after tax of N519.1 billion compared to a restated loss of N85.6 billion in H1 2023 and a negative retained earnings and shareholders’ equity of N727.2 billion and N577.7 billion, respectively,” the statement noted.

However, the telco grew its revenue to N1.53 trillion, the cost of sale rose by 33 per cent to N252 billion while operating expenses were at N738 billion.

In terms of its operations, MTN also grew its customer base to 79.4 million despite barring 8.6 million subscribers in H1 2024 while data revenue grew to N727 billion while its voice revenue stood at N632 billion in the six months.

Mobile money wallets increased to 5.5 million from 3.1 million recorded in the first half of 2023, active mobile money (MoMo PSB) wallets increased by 73.9 per cent to 5.5 million while its fintech arm saw a revenue growth of 11 per cent.

Speaking on the result, the chief executive of MTN Nigeria, Mr Karl Toriola, said, “Overall, these headwinds put pressure on consumers and the cost of doing business in the country. This includes, for MTN Nigeria, additional forex losses, leading to pressure on our period-end negative capital position.”

“Notwithstanding, we continue to prioritise initiatives to mitigate these pressures while accelerating the growth of our business, and we remain encouraged by the robust momentum in the underlying performance of our commercial operations,” he added.