MTN Nigeria reports ₦519.1 billion loss in first half of 2024

MTN Nigeria reported a substantial loss after tax of ₦519.1 billion in the first half of 2024
The losses were largely due to challenging macroeconomic conditions in Nigeria, including record-high inflation and a weaker naira
Despite the setbacks, MTN Nigeria reported revenue growth of 32.6% to ₦1.5 trillion

According to its unaudited results for the half-year ended June 2024, these losses arose from the revaluation of foreign currency-denominated obligations, exacerbated by the depreciation of the naira from ₦907/ in December 2023 to ₦1,505/in June 2024.

Despite the setbacks, MTN, Nigeria’s biggest company by market value, reported revenue growth of 32.6% to ₦1.5 trillion. However, the company’s financial performance was heavily impacted by net forex losses amounting to ₦887.7 billion.

Karl Toriola, Managing Director and Chief Executive Officer (MD/CEO) of MTN Nigeria Communications Ltd [PM News Nigeria] Pulse Nigeria

Commenting on the report, Karl Toriola, CEO of MTN Nigeria, highlighted the difficult economic environment, noting that the inflation rate reached 34.2% in June, with an average rate of 32.8% for the first half of the year.

He added that the company would have recorded a profit after tax of ₦102.3 billion if not for the forex losses.

The high inflation rate and the devaluation of the naira have significantly increased operational costs for businesses and telecom companies in Nigeria. These economic conditions have led to higher prices for imported equipment and services, affecting the overall cost structure of telecom operators.

Furthermore, rising operational costs, driven by inflation and currency volatility, have impacted the profitability of major companies, forcing many of them to balance the need to maintain high-standard infrastructure with the challenge of providing affordable services to consumers.

MTN Nigeria would have recorded a profit after tax of ₦102.3 billion if not for the forex losses. Pulse Nigeria

Looking at the impact on shareholders, MTN Nigeria’s financial loss may affect short-term dividend payouts, but the company’s revenue growth and strategic initiatives could restore profitability in the long run.

In addition, the economic pressures might lead to adjustments in pricing, but the company will aim to balance affordability with sustainability.