MTN Faces Economic Hurdles, Losses Over $80 Million

MTN Nigeria, the largest telecommunications company in Nigeria, led by Nigerian business executive Karl Toriola, faced a substantial financial setback, revealing losses exceeding $80 million at the close of its fiscal year 2023. The challenging macroeconomic landscape, particularly the devaluation of the naira, emerged as the primary catalyst for this downturn.


In its recently released financial report, MTN Nigeria reported a 22.7 percent increase in revenue, soaring from N2 trillion ($1.24 billion) in 2022 to N2.47 trillion ($1.52 billion) in 2023. However, it simultaneously plunged into a loss of N133.84 billion ($82.7 million), a stark contrast to the N351.38 billion ($217.24 million) profit recorded in 2022.


This financial outcome resulted from a combination of factors, including naira devaluation, heightened inflation, increased energy costs, and the imposition of the 2023 Finance Act VAT on tower leases, contributing to elevated operating expenses (opex).


Forex losses soar, finance costs surge, and subscriber base expands amidst currency volatility

Throughout the fiscal year, the company experienced a 341.9 percent surge in net finance costs, reaching N951.5 billion ($588.24 million), driven by amplified borrowings, heightened interest rates, and a significant devaluation of the naira from N461/$ in December 2022 to N907.1/$ in December 2023, influenced by the forex market liberalization in June 2023.


Consequently, the forex loss ballooned to N740 billion ($457.5 million) from N81.8 billion ($50.6 million), with finance costs escalating by 60.9 percent to N236.9 billion ($146.45 million). The underlying net finance cost, excluding forex losses, also surged by 58.1 percent to N211.1 billion ($130.48 million).


MTN Nigeria’s operations face vulnerability to foreign currency volatility, particularly in operating and capital expenditures. Tower lease costs, a significant portion of the 45-50 percent foreign currency exposure in operating expenses, were notably affected, with the majority indexed to the US dollar but invoiced and paid in naira.


Despite the substantial fiscal year loss, MTN Nigeria achieved noteworthy milestones, including a 5.3 percent increase in total subscribers to 79.7 million, a 12.7 percent rise in active data users to 44.6 million, and a remarkable 163.2 percent surge in active mobile money (MoMo PSB) wallets to 5.3 million. Service revenue surged by 22.4 percent to N2.5 trillion, and earnings before interest, tax, depreciation, and amortization (EBITDA) grew by 12.3 percent to N1.2 trillion ($742 million).


In response to the challenging operating environment, MTN Nigeria CEO Karl Toriola acknowledged, “2023 witnessed a very challenging operating environment characterized by rising inflation, currency devaluation, and foreign exchange shortages, complicated by geopolitical disruptions and cash shortages in Q1 arising from a redesign of the naira. These factors created severe headwinds for our customers and our business during the year.”


Toriola highlighted the year’s inflation rate, reaching 28.9 percent in December 2023—the highest in 18 years—with an average rate of 24.5 percent. He also pointed out the exacerbation of challenges by higher fuel prices, a consequence of the fuel subsidy removal in May 2023.



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