MTN posts N392.6bn loss induced by high interest rate, naira crisis
Nigeria’s biggest telecoms provider, MTN, has posted a net negative position of -N392.6 billion after tax between January and March, indicating 462.2 per cent decline, compared to the N108.43 billion posted in the same quarter in 2023. The net loss for the quarter resulted in a further increase in its accumulated losses and negative shareholders’ […]
Nigeria’s biggest telecoms provider, MTN, has posted a net negative position of -N392.6 billion after tax between January and March, indicating 462.2 per cent decline, compared to the N108.43 billion posted in the same quarter in 2023.
The net loss for the quarter resulted in a further increase in its accumulated losses and negative shareholders’ funds to N599.2bn and N434.7bn respectively, according to the company’s first quarter 2024 financial statement.
MTN saw a boom in revenue by 32.5 per cent from N568.1bn in the first quarter of last year to N752.98bn this year. The performance was driven by N349bn revenue from data services and N318.9bn revenue from voice services.
Despite the surge in revenue, the company saw a decline in key performance indices which led to a negative shareholders’ equity and retained earnings of N599.2bn and N434.7bn respectively.
In the first quarter, the naira depreciated from N907 per dollar to N1,627 per dollar at the Nigerian Autonomous Foreign Exchange Market which led to losses for Nigerian businesses and impacted on inflation which rose to 33.2 per cent in March.
The Central Bank of Nigeria also hiked the Monetary Policy Rate to 24.75 per cent which impacted funding costs for Nigerian businesses.
Approximately 47 per cent of MTN’s debts have fixed interest rates, while 53 per cent are floating and have been impacted by the interest rate hikes.
The naira depreciation led to a 14,489.2 per cent surge in the company’s net finance loss to N656.4bn up from the N4.5bn loss posted in the first quarter of last year.
The company’s net finance costs spiked by approximately 17-fold to N749.8bn against N43.7bn spent in the first quarter of 2023, a setback significantly driven by the naira depreciation.
MTN Nigeria’s Chief Executive Officer, Mr Karl Toriola, explained that severe macroeconomic headwinds overshadowed the strong operating performance of the firm.
He said: “The operating environment in the first quarter remained very challenging, with rising inflation and continued naira depreciation off an already low base.