MTN Nigeria incurs N740BN in forex losses, shareholders funds wiped out.
The local subsidiary of Africa’s biggest mobile network operator surpassed turnover for the corresponding period of last year by more than two-fifths as a big bulge in data revenue helped drive the top line to N1.8 trillion according to its earnings report published on Monday.
MTN Nigeria signed on 3.6 million new active data users to its network within the period, pushing its total active users 13.3 per cent to 43.1 million, while its mobile subscribers were also 4.8 per cent up at 77.6 million.
MTN Nigeria Plc has reported a loss before tax of N177.8 billion compared to a pre-tax profit of N518.8 billion a year earlier. The losses resulted in a wipe-out of shareholders’ funds.
The company attributed the losses to a massive foreign currency loss of N740 billion up from N81 billion reported in 2022.
This is the company’s first-ever loss since it became a quoted company in Nigeria.
According to MTN, “the loss was significantly due to operational changes to the Nigerian Foreign exchange market, including the abolishment of the segmented/parallel structure announced by CBN in June 2023.”
According to MTN, “the loss was significantly due to operational changes to the Nigerian Foreign exchange market, including the abolishment of the segmented/parallel structure announced by CBN in June 2023.”
MTN also stated that it has used an official (NAFEM) exchange rate of N907.11/$1 as of 31 December 2023 suggesting losss could be wider if the current exchange rate between the naira and dollar persis by the end of March when it publishes its Q1 results.
“The liberalisation of the forex management in June 2023 resulted in a 68.5% upward movement in the exchange rate from N461/$1 in December 2022 to N777/US$ at the end of September, resulting in higher cost of doing business,” CEO Karl Toriola said in a separate statement.
“Our fintech business continued to gain traction, recovering from the slowdown in H1. Active wallets rose by 1.6 million to 3.6 million, with over 293k MoMo agents and 197k merchants demonstrating the underlying momentum in the ecosystem,” he added.