MTN Nigeria Plc announced a N177.8 billion pre-tax loss as compared to a N518.8 billion pre-tax profit in the previous year. The losses resulted in a wipe-out of shareholders’ funds.
The telcos blamed the losses on a significant foreign exchange loss that increased from N81 billion in 2022 to N740 billion.
In its 2023 financial statement, MTN said, “The loss was significantly due to operational changes to the Nigerian Foreign exchange market, including the abolishment of the segmented/parallel structure announced by CBN in June 2023.”
MTN stated that it has used an official (NAFEM) exchange rate of N907.11/$1 as of 31 December 2023 suggesting loss could be wider if the current exchange rate between the naira and dollar persis by the end of March when it publishes its Q1 results.
Meanwhile, the financial statement revealed that the company made revenue of N2.469 trillion compared to N2.012 trillion made in 2022; operating profit grew to N773.660 billion in 2023 compared to N734.164 billion made in 2022.
Finance income grew from N25.815 billion in 2023 compared to N13.768 billion in 2022; Finance Cost also grew from N236.927 billion in 2023, compared to N147.287 billion in 2022. Meanwhile, Net forex loss incurred was N740.434 billion compared to N81.822 billion in 2022; Profit after tax was -N137.021 billion in 2023 compared to N348.727 billion in 2022; earnings per share was -N6.38, compared to N16.76 in 2022 and total borrowing was N1.177 trillion in 2023, compared to N689.673 billion, in 2022.
On subscription, the statement revealed that total subscribers increased by 5.3 per cent to 79.7 million; active data users increased by 12.7 per cent to 44.6 million; active mobile money (MoMo PSB) wallets increased by 163.2 per cenr to 5.3 million; earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 12.3 per cent to N1.2 trillion and
EBITDA margin decreased by 4.5 percentage points (pp) to 48.7 per cent.
In its reaction, MTN Nigeria 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 28.9 per cent in December 2023 – the highest reading in 18 years – with an average rate of 24.5 per 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 66.4 per cent and 257.1 per 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 96.7 per cent unfavourable movement in the exchange rate against the US dollar from N461.1/$ in December 2022 to N907.1/$ (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.”
