BREAKIING: MTN Nigeria declares N137bn loss in 2023 over Naira devaluation

MTN Nigeria Communications Plc on Friday announced N137 billion loss in audited result and accounts for period ended December 31, 2023 from N348.73 billion profit declared in 2022 over foreign exchange loss.

The telecommunication company on the Nigerian Exchange Limited (NGX) declared N177.89billion loss before tax in 2023 from N518.82billion profit before tax in 2022 as the net loss for the year has resulted in a depletion of our retained earnings and shareholders’ fund to negative N208.0 billion and N40.8 billion, respectively.

Its capital expenditure (capex) increased by 13.2per cent to N571.0 billion (up 24.5 per cent to N449.3 billion, ex-leases).

The group declared N2.47 trillion revenue in 2023, representing an increase of 23 per cent from N2.01trillion reported in 2022.

Commenting on the results, CEO, MTN Nigeria, Mr. Karl Toriola in a statement said, “2023 witnessed a very challenging operating environment characterised by rising inflation, currency devaluation and foreign exchange shortages, complicated by geopolitical disruptions and cash shortages in Q1 arising from a redesign of the naira. These factors created severe headwinds for our customers and our business during the year.

“The inflation rate increased throughout the year, reaching 29.9per cent in December 2023 – the highest reading in 18 years – with an average rate of 24.5per cent. This was further exacerbated by higher fuel prices, arising from the removal of the fuel subsidy in May 2023, with the average prices of diesel and petrol up by 66.4per cent and 257.1per cent in 2023 to N1,416.8/litre and N600/litre, respectively.

“In June 2023, the Central Bank of Nigeria (CBN) adopted a more liberal foreign exchange management system and reintroduced the ‘willing buyer, willing seller’ model. This has resulted in a 96.7per cent unfavourable movement in the exchange rate against the US dollar from N461.1/US$ in December 2022 to N907.1/US$ (Nigerian Autonomous Foreign Exchange Market (NAFEM) rate) in December 2023.

“This development contributed meaningfully to the upward pressure on the cost of doing business in Nigeria, and for MTN Nigeria in particular, significantly increased the costs in relation to our tower leases.

“In December 2023, we released an announcement relating to an industry-wide directive issued by the Nigerian Communications Commission (NCC) to operators in the country. This directed operators to implement full network barring on all subscriber lines for which subscribers have not submitted their National Identity Numbers (NINs) and those whose NINs are unverified.

“To mitigate the effects of these headwinds on our operations, we continued to invest in our network infrastructure – with a disciplined focus on value-based capital allocation and efficiencies – to enhance capacity and expand coverage. This enabled us to meet the rising demand for data and, coupled with compelling and competitive propositions for our customers, accelerate the growth of our commercial operations.”