Nigeria’s foremost telecom company, MTN Nigeria reported a pre-tax loss of N575.69 billion in the first quarter of 2024 despite an upsurge in revenue compared to the same period last year.
The telco reported a revenue of N752.9 billion, up 32.5% compared to N568.1 billion for the same period in 2023.
Its pre-tax loss of N575.69 billion is a sharp contrast to the N162.9 billion profit reported for the same period a year earlier.
The loss is attributed primarily to exchange rate depreciation. MTN lost a staggering N656.3 billion to foreign exchange fluctuations.
Looking at the breakdown, the company had total revenue of N752.9 billion (+32.5%); EBITDA of N296.9 billion (-1.9%); Net Finance Cost: N749.7 billion (+1,615.5%); Net Foreign Exchange loss: N656.3 billion, (+14489.2%); Pre-tax loss: N575.69 billion (+N162.9 billion) and Loss after tax: N392.69 billion (+N108.4 billion).
The telco’s Net Assets is put at N437 billion (-N40.8 billion); Free Cash flow: N177.2 billion (-35.6%); Capex: N390.6 billion (+49.1%); Mobile subscribers: 77.7 million (+1.3%); Data subscribers: 44.5 million (+8%); MoMo Wallets: 4.8 million (+48.8%) Ayobo Subscribers: 8.5 million (+27.3%)
MTN Nigeria experienced growth in all of its revenue lines including Voice, Data, FinTech and Digital revenue respectively.
Voice and Data alone contributed N318.9 billion and N349.5 billion representing a 14.9% and 53.4% growth respectively.
“The operating environment in the first quarter remained very challenging, with rising inflation and continued naira depreciation off an already low base. The naira depreciated to an all-time low of N1,627/US$ at the Nigerian Autonomous Foreign Exchange Market (NAFEM) in March, from N907/US$ at the end of December 2023, before moderating to N1,309/US$ by the end of the quarter. Additionally, the inflation rate maintained an upward trajectory, rising to 33.2% in March, with an average rate of 31.6% in the quarter” the telco said.
Of its outlook, the company said:
“Continued elevated inflation and unpredictable foreign exchange rates remain significant challenges for businesses. However, we remain focused on sustaining our commercial momentum, accelerating our service revenue growth, unlocking operational efficiencies, and strengthening our balance sheet to improve the profitability of our business. We do, however, also require regulated tariff increases to restore the profitability of the Company.”
MTN Nigeria says it plans to grow revenues faster, repair margins, as well as rebuild reserves to strengthen its balance sheet position by tariff increases, improving margins, optimize capex and reduce forex exposure.
“We are focused on reducing the various exposures our business has to US$ volatility. One key area is the Company’s outstanding letters of credit (LC) obligations, which contribute to the volatility in our earnings through FX losses reported in our income statement. These obligations were raised in support of our capex requirements which are largely foreign currency denominated. In this regard, we have utilised the improved liquidity in the FX market to reduce the balance of outstanding LC obligations to US$243.4 million as at 31 March 2024, from US$416.6 million as at 31 December 2023.”
