MTN Nigeria Reports N514.9 Billion Loss in 9 Months, Cites Naira Depreciation as Key Factor
MTN Nigeria, one of the country’s leading telecom operators, has reported a staggering loss after tax of N514.9 billion for the first nine months of 2024. The primary reason for this significant financial setback has been attributed to the steep depreciation of the Naira, which has severely impacted the company’s foreign currency obligations.
This sharp loss marks a dramatic increase of 3,335% compared to a loss of N15.0 billion recorded in the same period last year, according to MTN Nigeria’s unaudited financial results for the nine months ending September 30, 2024.
Financial Impact of Currency Depreciation
In a statement, MTN Nigeria’s CEO, Karl Toriola, explained that without the forex revaluation losses, the company’s profit after tax (PAT) would have been N118.5 billion, reflecting a year-on-year decline of 59.2%. Adjusting for the forex impact on operating expenses, the PAT would have increased by 13.3% to N367.1 billion.
However, due to the current economic landscape, MTN’s retained earnings and shareholders’ equity have turned negative, standing at N723.0 billion and N573.6 billion, respectively, as of September 2024.
Subscriber & Revenue Performance
Despite the economic headwinds, MTN Nigeria managed to achieve a 33.6% increase in service revenue, totaling N2.4 trillion during the period. This demonstrates the continued demand for telecom services, even amid challenging conditions. The company’s active data users grew by 5.1% to reach 45.3 million, though its overall subscriber base saw a slight decline of 0.9% to 77.0 million, mainly due to compliance with the NIN-SIM linkage directive.
Interestingly, MTN’s mobile money (MoMo) wallets suffered a notable drop of 21.8%, bringing the total number of active wallets down to 2.8 million.
Cost Management and Strategic Focus
To mitigate the financial impact, MTN renegotiated its tower lease contracts with IHS Towers, resulting in operating expense savings that positively affected the EBITDA margin by 2.3 percentage points. However, the company’s EBITDA still experienced a year-on-year decline of 5.3% to N860.2 billion, with the EBITDA margin dropping to 36.3%.
Despite these challenges, the company generated a positive free cash flow of N536.8 billion, up 21.9% from the previous year, driven by efficient working capital management and reduced capital expenditure.
CEO’s Outlook
Karl Toriola emphasized the company’s focus on financial recovery, stating, “As we navigate the current macroeconomic headwinds, our priority remains accelerating our earnings recovery, strengthening our balance sheet, and restoring our net asset position.”
He added that MTN is committed to complying with regulatory requirements while working to reconnect customers affected by the NIN-SIM directive to minimize churn rates and maximize market value.
MTN Nigeria reports Loss
