MTN Forex Losses Hit N925.36bn As Telcos Battle Rising Cost

…Loss After Tax Widens By N263bn To N400bn

MTN Nigeria Plc has announced financial performance for the 2024 fiscal year, suffering a net foreign exchange loss of N925.36bn in the 2024 financial year as against N740.43bn reported in 2023 representing a growth of 25 per cent.

The drop is attributed to the depreciation of the naira and rising inflation wherein in the foreign exchange market, the naira depreciated to N1,535/US$ by the end of 2024 (from N907.1/US$ on 31 December 2023), as businesses and consumers continued to grapple with escalating costs.

Inflation reached 34.8 per cent in December 2024, averaging 33.2 per cent for the year, significantly impacting operational costs and consumer purchasing power. The Monetary Policy Rate (MPR) was raised on multiple occasions throughout the year, reaching 27.5 per cent, aimed at counteracting naira volatility and elevated inflation. This increased our cost of borrowing.

The losses resulted in the company recording a loss after tax of N400.4bn as against the N137bn loss posted in 2023.

However, the company said it took some comfort from the improvement in US dollar liquidity in the forex market and reduced volatility for the year, as the naira exchange rate held relatively stable through H2.

MTN Nigeria CEO Karl Toriola said that the company is encouraged by the resilience of its business in 2024, which reflects its strong commitment to driving growth and managing costs.

Toriola noted that despite facing significant macroeconomic headwinds, including record-high inflation, as well as ongoing currency and energy price volatility, the company remained focused on executing its strategy and creating long-term value for our stakeholders.

“ 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.

“We made significant progress in driving the growth of our commercial operations, boosted by our ongoing investments in the coverage and capacity of our network to accommodate traffic growth and enhance the quality of service.

“This was a major focus of our N443.5 billion capex (ex-leases) in the year. Our subscriber base climbed further to 80.9m, up 1.6 per cent, despite the effects of the Nigerian Communications Commission’s (NCC) industry-wide directive on NIN-SIM registration. Likewise, active data subscribers grew by 7 per cent to 47.7 million.

Our diligent gross connection and churn management initiatives, including ongoing innovation in our customer value propositions, supported the growth of our subscriber base,” he said.

Toriola said these interventions underpinned the significant growth in the traffic on the company’s network, reflecting the structural demand for its digital and connectivity services.

According to him, “Data traffic rose by 42.9 per cent, with average monthly data usage per user growing by 33.6 per cent to 11.2GB.

“In fintech, we recalibrated the business’ growth strategy to improve the quality and stickiness of our wallet base and the development of advanced services, supported by the promotion of the MoMo PSB app.

“In this regard, we revamped our customer acquisition strategy. Although this intervention resulted in a decline in active wallets (down 46.6 per cent to 2.8m), it was essential to establish a sustainable growth trajectory for our MoMo PSB ecosystem.

“Supported by strong commercial momentum, service revenue was up by 35.9 per cent, led by data, voice, fintech and digital services, as well as the once-off revenue recognition relating to outstanding USSD debt owed by deposit money banks.

“As of December 2024, approximately 34 per cent had been repaid, and the remaining balance was recognised as receivables, which are expected to be settled in 2025. Excluding the USSD revenue recognition, underlying service revenue growth remained robust (up 32.8 per cent), and tracked at the upper end of our FY 2024 guidance of ‘high-20 per cent to low 30 per cent’.

“To mitigate the effects of macro headwinds on our business, exacerbated by the introduction of VAT on leases in September 2023, we drove our expense efficiency programme to deliver EBITDA growth of 9.2 per cent. While the EBITDA margin decreased by 9.6pp to 39.1 per cent, reflecting the above-mentioned forex impact, we are pleased with the strong growth in our Q4 EBITDA (up 53.9 per cent) and 3.5pp YoY improvement in margin to 45.8 per cent.”

Toriola noted that 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.

“Shareholders’ equity was negative N458bn (December 2023: negative N40.8bn), compared to negative N577.7bn in June 2024. We delivered a positive free cash flow of N388.2bn, down 3.7 per cent,” he said.

MTN Forex Losses Hit N925.36bn As Telcos Battle Rising Cost is first published on The Whistler Newspaper