MTN Nigeria’s Billboard (Source: Alamy)
MTN Nigeria has revealed its financial results for the past nine months ending September 30, 2024. Data showed that the telco’s net losses grew by more than 3335% year on year to N514.928 billion, according to details from the telecommunication company’s unaudited financial statement revealed. This loss spiked from N14.984 billion in the comparable period in 2023.
On the other hand, this loss was followed by growth in voice, data, digital, fintechs and other services revenue in the period. The telecom company report also revealed that service revenue increased by 33.6% to N2.4 trillion at the end of the 9M-2024 despite the fact that subscribers reduced.
The company’s total subscribers decreased by 0.9% to 77.0 million, impacted by the NIN-SIM regulations. However, active data users increased by 5.1% to 45.3 million while active mobile money (MoMo PSB) wallets decreased by 21.8% to 2.8 million.
Total operating expenses surged by about 75% year on year to N1.510 trillion from N865 billion in the equivalent period in 2023. Without FX related losses, MTN Nigeria profit after tax (PAT) would have settled at N118.5 billion, which is a significant 59.2% year on year drop in bottom line. This resulted in negative Earnings per share (EPS) of N24.51 kobo.
“In the first nine months of 2024, we sustained the growth in our underlying operating performance – underpinned by our resilient business model and operational agility – despite challenging conditions.
“The inflation rate remained elevated amidst rising energy prices and naira depreciation. Inflation averaged 32.8% in the nine months 2024 compared to an average of 24.5% in 2023.To curb inflation, the Central Bank of Nigeria (CBN) increased the Monetary Policy Rate (MPR) by 8.5pp to 27.25% during the period, resulting in higher funding costs, although this helped reduce volatility and improve liquidity in the forex market.
“The higher inflation and interest rates weighed on consumers’ spending power and impacted business activity. However, we remain focused on enhancing operational efficiency and driving the growth of our commercial operations.
“Additionally, the naira closed at the Nigerian Autonomous Foreign Exchange Market (NAFEM) in September 2024 at N1,542/US$ (December 2023: N907/US$), exerting pressure on business activity. The improvement in liquidity in the foreign exchange (forex) market has helped us reduce our exposure to foreign currency-denominated obligations”. Toriola said in a press release.
The focus at the moment is to salvage the situation by increasing tarrifs. Karl Toriola, CEO of MTN Nigeria, stated that “if the tariff doesn’t go up, the telco will shut down,” emphasizing the need for the telecommunications sector to return to profitability to sustain its operations, as telcos call for tariff increases in response to economic challenges.
During the period, MTN Nigeria successfully renegotiated tower lease contracts with IHS Towers where the renegotiated agreements also included an energy cost component linked to the cost of providing diesel power.
