In a significant turn of events, MTN Nigeria Plc has reported a staggering loss before tax amounting to N177.8 billion, marking a stark contrast to the pre-tax profit of N518.8 billion recorded a year earlier. This substantial loss has resulted in a complete wipe-out of shareholders’ funds, presenting unprecedented challenges for the telecom giant.
The company attributes these losses primarily to a massive foreign currency loss of N740 billion, a significant surge from the N81 billion reported in the preceding year. This development marks MTN Nigeria’s first-ever loss since its inception as a quoted company in Nigeria.
Explaining the factors behind these substantial losses, MTN cited operational changes in the Nigerian foreign exchange market, particularly the abolishment of the segmented/parallel structure announced by the Central Bank of Nigeria (CBN) in June 2023. This shift significantly impacted MTN’s financial performance, leading to the depletion of its retained earnings and shareholders’ funds.
Key financial highlights for the fiscal year 2023 include:
– Revenue: N2.469 trillion, up from N2.012 trillion in the previous year, marking a 22.69% year-on-year increase.
– Operating Profit: N773.660 billion, reflecting a 5.38% year-on-year growth.
– Finance Income: N25.815 billion, an 87.50% year-on-year increase.
– Finance Cost: N236.927 billion, up by 60.86% year-on-year.
– Net FX Loss: N740.434 billion, a staggering 804.93% year-on-year surge.
– Loss after tax: N137.021 billion, compared to a profit of N348.727 billion in the previous year.
Additionally, the company reported a substantial increase in total borrowing, reaching N1.177 trillion compared to N689.673 billion in the previous year. Despite these challenges, MTN Nigeria witnessed growth in key subscriber metrics, including total subscribers, active data users, and active mobile money (MoMo PSB) wallets.
In response to the adverse financial performance, MTN Nigeria has communicated that it will not propose a final dividend payment for the year ended December 31, 2023. This decision is attributed to the substantial loss incurred during the fiscal year.
The company’s stock performance reflects shareholders’ concerns, with MTN Nigeria Communications Plc (MTNN) experiencing a year-to-date loss of 15.6% and a 19% decline from February 1st to the current date. Shareholders’ worries are compounded by the challenging operating environment characterized by rising inflation, currency devaluation, and foreign exchange shortages.
Despite these challenges, MTN Nigeria remains committed to navigating the turbulent landscape and addressing the complex issues affecting its financial performance, with a focus on sustaining long-term growth and value creation for shareholders.
