Currency Collapse: MTN Nigeria Sees ₦514.9 Billion Loss In Latest Financial Report 5th November 2024 

The significant loss is largely attributed to the naira’s devaluation, which shows a reduction of ₦4.1 billion from the ₦519.1 billion loss reported in the half-year results. Despite the tough economic landscape, service revenue surged by 33.6%, reaching ₦2.4 trillion.

The total number of subscribers decreased by 0.9% to 77.0 million, influenced by NIN-SIM linkage regulations that led to the deregistration of certain SIM cards. However, there was a 5.1% increase in active data users, totaling 45.3 million, while the number of active mobile money (MoMo PSB) wallets fell by 21.8% to 2.8 million.

Additionally, the results showed a 5.3% drop in Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA), totaling ₦860.2 billion, with the EBITDA margin declining by 14.9 percentage points to 36.3%.

MTN Nigeria’s CEO, Karl Toriola, described the overall performance as “resilient,” despite ongoing macroeconomic challenges and regulatory issues. He noted, “In the first nine months of 2024, we maintained growth in our underlying operating performance, driven by our resilient business model and operational agility despite the adverse conditions.”

The inflation rate has remained high, exacerbated by rising energy prices and naira depreciation, averaging 32.8% during the nine-month period, compared to 24.5% in 2023. In response, the Central Bank of Nigeria (CBN) raised the Monetary Policy Rate (MPR) by 8.5 percentage points to 27.25%, leading to increased funding costs but helping to reduce volatility and improve liquidity in the foreign exchange market.

This higher inflation and interest rates have impacted consumer spending power and business activity. Nevertheless, the company remains focused on enhancing operational efficiency and promoting growth in its commercial operations.

MTN Nigeria also announced plans to raise ₦50 billion through a new issuance of commercial paper (CP) as part of its ₦250 billion Commercial Paper Issuance Programme. This issuance aims to bolster MTN Nigeria’s short-term working capital and expand its financing options.

The recent depreciation of the naira has significantly affected the company’s earnings and its ability to distribute dividends to shareholders. In 2023, MTN Nigeria faced a substantial increase in net foreign exchange losses, reaching ₦740.4 billion, an increase of 805% compared to ₦81.8 billion in 2022.

It is important to note that in June 2023, the CBN ended the multiple exchange rate system and allowed the naira to float freely, resulting in a sharp increase in the exchange rate from ₦461.1/US$ in December 2022 to ₦907.1/US$ in December 2023.