MTN Nigeria Communications Plc (MTN Nigeria) has released its financial results for the nine months ending 30 September 2024, showing mixed performance.
The telecom company reported a loss after tax of ₦514.9 billion, compared to a profit after tax of ₦4.1 billion in Q3 2024. This loss was mainly due to the devaluation of the naira, with the ₦514.9 billion down by ₦4.1 billion against the ₦519.1 billion recorded in its half-year results.
Despite economic challenges, service revenue increased by 33.6% to ₦2.4 trillion. Total subscribers decreased by 0.9% to 77.0 million, impacted by the NIN-SIM linkage regulations, which led to the deregistration of some Subscriber Identity Module (SIM) cards.
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. Earnings before interest, tax, depreciation, and amortisation (EBITDA) fell by 5.3% to ₦860.2 billion, and the EBITDA margin decreased by 14.9 percentage points to 36.3%.
MTN Nigeria CEO Karl Toriola described the performance as “resilient” despite persistent macroeconomic pressures and regulatory challenges. He stated, “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 (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 also announced it would raise ₦50 billion through its latest issuance of commercial paper (CP) under its ₦250 billion Commercial Paper Issuance Programme.
This Series 11 and 12 CP issuance aims to strengthen MTN Nigeria’s short-term working capital and diversify its financing base. This is part of MTN Nigeria’s ongoing strategy to tap the debt market as a flexible funding source to meet immediate financial needs.
Recently, the depreciation of the naira has affected the company’s earnings, impacting its ability to declare dividends for shareholders.
In 2023, MTN Nigeria recorded a significantly higher net foreign exchange loss of ₦740.4 billion, an 805% increase over 2022 (₦81.8 billion). In June 2023, the Central Bank of Nigeria (CBN) ended the multiple exchange rate regime 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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