By DAYO ADESULU
MTN Nigeria financial report for the year ended December 31, 2024, has revealed a staggering post-tax loss of N400.44bn, driven primarily by the sharp depreciation of the naira and escalating foreign exchange losses.
The company’s audited financial statement, released on Thursday, shows that this loss represents a 192 per cent increase from the N137.02bn loss recorded in 2023. The telecom giant, which serves over 80 million customers, highlighted that the naira’s depreciation significantly affected its foreign exchange exposure, with forex losses surging to N925bn from N740bn in the previous year.
Forex Losses and Currency Devaluation Impact Over MTN Nigeria
The naira depreciated from N907/$1 as of December 31, 2023, to N1,535/$ by the end of 2024. This decline worsened MTN Nigeria’s financial position, making it difficult to mitigate foreign exchange obligations.
The telecom company explained in its financial statement, “Forex losses arising from the revaluation of foreign currency-denominated obligations resulted in a loss after tax of N400.4bn (2023: N137bn loss), albeit with a positive result in Q4 (PAT of N114.5bn). Consequently, we reported negative retained earnings of N607.5bn (December 2023: negative N208bn), which was an improvement from the June 2024 balance of N727.2bn.”
MTN Nigeria: Revenue Growth Fails to Offset Losses
Despite the heavy losses, MTN Nigeria reported a revenue increase of 36 per cent, rising from N2.47tn in 2023 to N3.36tn in 2024. The surge was attributed to continued demand for data and digital services, which have become the backbone of the company’s operations.
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However, the company’s operating profit—earnings from its core business activities—stood at N778.2bn, reflecting a marginal increase of just 0.46 per cent from N774.6bn in 2023. Unfortunately, the gains were overshadowed by the significant forex losses.
MTN Nigeria CEO’s Statement on Financial Performance
Karl Toriola, CEO of MTN Nigeria, acknowledged the challenging macroeconomic environment but remained optimistic about the company’s resilience.
“We are encouraged by the resilience of our business in FY 2024, which reflects our strong commitment to driving growth and managing costs,” Toriola stated. “Despite facing significant macroeconomic headwinds, including record-high inflation, as well as ongoing currency and energy price volatility, we remained focused on executing our strategy and creating long-term value for our stakeholders.”
Toriola also expressed appreciation for the recent approval of tariff adjustments by regulatory authorities, emphasizing that these changes are crucial for the telecom industry’s sustainability.
“We are grateful to the authorities for the recent approval of tariff adjustments, which are essential for our industry’s sustainability and crucial for addressing our negative capital position,” he added.
Regulatory Challenges and Tariff Adjustments
The Nigerian telecom sector has faced challenges in recent months, particularly concerning pricing adjustments and government regulations. In response to rising operational costs, MTN Nigeria and other telecom operators implemented a 50 per cent tariff hike, which raised data prices significantly. The move sparked backlash from consumers and led to demands from the House of Representatives for a reversal of the new pricing model.
In an official statement, MTN Nigeria apologized to its customers and assured them of improved services despite the difficult economic climate.
Historical Overview of MTN Nigeria
MTN Nigeria Communications Plc was incorporated on November 8, 2000, as a private limited liability company. It was granted a licence by the Nigerian Communications Commission on February 9, 2001, allowing it to build and operate GSM cellular network systems nationwide.
The company commenced operations on August 8, 2001, and has since grown into Nigeria’s largest telecommunications provider. However, recent economic challenges, particularly those related to currency volatility and regulatory hurdles, have put pressure on its financial performance.
Future Outlook for MTN Nigeria
As MTN Nigeria navigates the economic downturn, the company’s focus remains on mitigating losses through strategic cost management and regulatory engagement. The telecom giant aims to strengthen its financial position and sustain growth by investing in network expansion and digital services.
While the financial report paints a challenging picture, MTN Nigeria’s leadership remains confident in its ability to adapt to the changing economic landscape. The company will continue working closely with regulatory authorities and stakeholders to address its financial challenges while ensuring uninterrupted services for its customers.
Conclusion
MTN Nigeria’s financial report highlights the significant impact of currency depreciation on corporate earnings. Although the company achieved revenue growth, forex losses wiped out profits, resulting in a record loss of N400.44bn. As the telecommunications sector faces increased scrutiny and regulatory interventions, MTN Nigeria must navigate these challenges while maintaining its position as a market leader.
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Dayo Adesulu, Online Editor, SEO Expert.
