MTN Nigeria Communications Plc has announced plans to raise up to N50 billion through Series 11 and 12 commercial paper notes, as part of its larger N250 billion commercial paper program. The company disclosed this initiative in a filing with the Nigerian Exchange Limited on Monday, signed by its Company Secretary, Uto Ukpanah.
This fresh issuance follows MTN Nigeria’s successful Series 10 commercial paper issuance in 2023, where the company raised N72.1 billion, surpassing expectations with a 149% subscription rate and securing a 16% yield on a 266-day note. The latest Series 11 and 12 issuance is aimed at bolstering MTN’s short-term working capital and diversifying its financing options.
Amid these developments, MTN Nigeria faces financial hurdles. The company reported a N1.9 billion loss for the first nine months of 2024, largely due to the naira’s devaluation, surging energy expenses, and high inflation. MTN Nigeria’s CEO, Karl Toriola, attributed the losses to these external economic factors, while also noting that the company had recorded a 33.6% growth in service revenue, reaching N2.4 trillion. However, this growth was tempered by a 5.3% decline in earnings before interest, tax, depreciation, and amortisation (EBITDA), which dropped to N860.2 billion.
Toriola commented on MTN’s performance, highlighting the company’s resilience and adaptive strategy in the face of economic challenges. Despite a strong revenue increase, MTN’s bottom line was strained by the currency devaluation and rising operational costs, including energy expenses. Additionally, the introduction of value-added tax on leases in September 2023 weighed down EBITDA growth year-on-year.
The financial report further revealed that foreign currency obligations continued to impact MTN’s overall earnings, resulting in a significant after-tax loss of N514.9 billion for the first nine months. This affected shareholders’ equity and retained earnings, both of which remained negative. Toriola indicated that excluding forex-related losses, MTN’s profit after tax would have been N118.5 billion, while further adjustments could have driven profits up to N367.1 billion.
Despite these challenges, MTN delivered a positive free cash flow of N536.8 billion, a 21.9% increase, which was supported by effective working capital management and reduced capital expenditures. This commercial paper issuance reflects MTN Nigeria’s ongoing commitment to strategic financial management and operational resilience amid challenging economic conditions.
