MTN Nigeria (MTNN), the country’s largest mobile network operator, has reported a staggering N519 billion loss after tax for the first half of 2024, marking its largest half-year loss on record. This figure represents a sixfold increase from the same period last year, according to the company’s latest earnings report released on Wednesday.
The telecommunications giant, a subsidiary of Africa’s leading mobile network operator MTN Plc, attributes this loss primarily to the recent devaluation of the Nigerian naira. The currency devaluation, implemented twice in the past eight months as part of government reforms to unify official and unofficial exchange rates, has resulted in massive foreign exchange losses for the company.
CEO Karl Toriola commented on the challenging financial environment, stating, “The higher general inflation impacted our cost profile and eroded earnings.”
He added, “Despite barring 8.6 million subscribers during H1, in line with the NCC directive, we managed to limit the decline in our base to 280k; resulting in a 2.9% YoY increased in our customers to 79.4 million.”
The Explainer learned, the company’s net foreign exchange loss surged to N887.7 billion, up from N454.7 billion in the previous year. This substantial increase was driven by the rising cost of foreign-currency obligations, including borrowings, trade and other payables, and lease liabilities, when converted to naira.
Despite these challenges, MTNN reported a 32.8% increase in revenue, reaching N1.5 trillion. This growth was primarily fueled by a sharp uptick in data income, which accounted for 47.2% of the total turnover. However, the positive revenue performance was overshadowed by escalating costs, with direct network operating costs more than doubling to N586.7 billion and other operating expenses growing by 103.3%.
The company’s loss before tax rose dramatically to N751.3 billion from N119.4 billion in the previous year. A tax credit of N232.2 billion from Nigerian tax authorities helped to partially offset this loss, resulting in the final net loss figure of N519.1 billion.
MTNN’s financial position remains precarious, with shareholders’ funds remaining in negative territory at -N577.7 billion.
The company’s total assets at the end of the period stood at N3.3 trillion, while liabilities amounted to N3.9 trillion.
