MTN Nigeria has suffered an unprecedented ₦519 billion loss after tax for the first half of 2024, the company declared Wednesday.
The loss, a massive jump from the ₦85 billion the firm lost in H1 2023, is an unusual one for the country’s largest telecommunications firm and, historically guaranteed profit maker.
The declaration also comes despite a 32.6 per cent growth in service revenue to N1.5 trillion, according to its financial result for the period ended June 2024.
Nigerian Current reports that the announcement comes amid accelerating inflation and currency volatility, which have created a tough macroeconomic environment for some of Nigeria’s biggest businesses.
Most of the losses were linked to the company’s USD obligations, such as leases priced in dollars and financing costs. The devaluation of the naira and currency volatility in H1 have significantly increased those costs.
Commenting on the H1 result, Karl Toriola, chief executive officer of MTN Nigeria, said: “The macroeconomic conditions in Nigeria have been challenging during the period.”
MTN noted that it would have recorded a profit after tax of N102.3 billion if not for forex losses.
“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,” Toriola added.
To mitigate these FX exposures, MTN reduced its outstanding letters of credit in dollars to $100 million by June 2024. It is also renegotiating lease agreements with IHS towers.
The telecom giant is seeking regulatory approval for tariff increases to offset some of those losses.
Notwithstanding the loss, the firm said its data revenue grew to ₦727 billion, outpacing voice revenue of ₦632 billion. Mobile money wallets increased to 5.5 million from 3.1 million recorded in H1 2023.
MTN also grew its customer base to 79.4 million despite barring 8.6 million subscribers in H1 2024.
