MTN Nigeria has reported a significant after-tax loss of ₦519.1 billion in the first half of 2024, driven by the challenging macroeconomic environment in Nigeria.
MTN building [ACCL Architects]
Key Financial Highlights:
- Loss: ₦519.1 billion after tax.
- Revenue Growth: 32.6% increase to ₦1.5 trillion.
- Net Forex Losses: ₦887.7 billion due to naira depreciation.
Despite revenue growth, MTN Nigeria’s financial performance was severely impacted by net foreign exchange losses. These losses resulted from the revaluation of foreign currency-denominated obligations, exacerbated by the naira’s depreciation from ₦907/USD in December 2023 to ₦1,505/USD in June 2024.
Karl Toriola, CEO of MTN Nigeria, noted the difficult economic environment, highlighting that the inflation rate reached 34.2% in June, with an average rate of 32.8% for the first half of the year. He mentioned that without the forex losses, the company would have recorded a profit after tax of ₦102.3 billion.
Economic Pressures:
- High Inflation: Significantly increased operational costs for businesses.
- Currency Devaluation: Raised prices for imported equipment and services, impacting telecom operators’ cost structures.
The high inflation rate and the devaluation of the naira have forced many companies, including telecom operators, to balance the need to maintain high-standard infrastructure with the challenge of providing affordable services to consumers. This economic situation has led to higher operational costs and affected overall profitability.
Despite these setbacks, MTN Nigeria remains focused on strategic initiatives to restore profitability in the long run. While short-term dividend payouts may be affected, the company’s revenue growth and proactive measures aim to ensure sustainability and affordability for consumers.
Karl Toriola, Managing Director and Chief Executive Officer (MD/CEO) of MTN Nigeria Communications Ltd [PM News Nigeria]
In summary, MTN Nigeria’s financial loss underscores the broader economic challenges facing businesses in Nigeria. However, the company’s strategic focus on growth and resilience could help navigate these difficulties and ensure long-term success.
For more on this story and other related articles, visit MTN Nigeria closes all stores and service centers nationwide.
