MTN Nigeria Communications Plc (MTN Nigeria) has released its financial results for the nine months ending September 30, 2024, showing a mixed performance.
The telecom company reported a post-tax loss of ₦514.9 billion for this period (with a Q3 2024 post-tax profit of ₦4.1 billion). However, when adjusted for net forex losses, Profit After Tax (PAT) stood at ₦118.5 billion, marking a 59.2% decline.
The loss was primarily driven by the naira’s devaluation, with the ₦514.9 billion loss representing a slight decrease from the ₦519.1 billion reported in the half-year results.
Despite these economic challenges, service revenue rose by 33.6%, reaching ₦2.4 trillion.
Additionally, total subscribers fell by 0.9% to 77.0 million, impacted by the NIN-SIM linkage regulations, which required telecom companies to deregister certain Subscriber Identity Module (SIM) cards.
The report showed a 5.1% increase in active data users, reaching 45.3 million, while active mobile money (MoMo PSB) wallets dropped by 21.8% to 2.8 million.
Earnings before interest, tax, depreciation, and amortisation (EBITDA) also declined by 5.3% to ₦860.2 billion, with the EBITDA margin down by 14.9 percentage points to 36.3%.
Commenting on the nine-month results, MTN Nigeria CEO Karl Toriola described the performance as “resilient,” despite ongoing macroeconomic pressures and regulatory challenges.
“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.
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“The inflation rate remained elevated amidst rising energy prices and naira depreciation. Inflation averaged 32.8% in the nine months (Q3 2024: 32.8%) compared to an average of 24.5% in 2023 (Q3 2023: 25.5%). 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.”
The company announced plans to raise ₦50 billion through its latest commercial paper (CP) issuance as part of its ₦250 billion Commercial Paper Issuance Programme.
This Series 11 and 12 CP issuance aims to bolster MTN Nigeria’s short-term working capital and expand its funding base, according to a notification to the Nigerian Exchange Limited and the investing public.
MTN Nigeria stated that the issuance aligns with its strategy to utilize the debt market as a flexible funding source for immediate financial needs.
The depreciation of the naira has recently impacted the company’s earnings, limiting its ability to declare dividends for shareholders. In 2023, MTN Nigeria reported a significant increase in net foreign exchange loss, reaching ₦740.4 billion—an 805% surge from ₦81.8 billion in 2022.
It’s worth noting that in June 2023, the Central Bank of Nigeria (CBN) ended the multiple exchange rate system and floated the currency, causing the exchange rate to rise from ₦461.1/US$ in December 2022 to ₦907.1/US$ in December 2023.
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