Naira Devaluation Erodes MTN’s Profit as Company Releases 9-Month Report
- Telecom company MTN recorded a loss after tax of N514.9 billion in the first nine months of the year
- The loss was largely due to the devaluation of the naira, which affected lots of companies during the period
- Total subscribers decreased to 77 million as its subscriber base was impacted by the NIN-SIM linkage regulations
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
MTN Nigeria Communications Plc has released its financial results for the nine months ending September 30, 2024.
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Profit After Tax (PAT), which was adjusted for the net currency loss, was N118.5 billion, down 59.2%, while the telecom business reported a loss after tax of N514.9 billion.
Meanwhile, the devaluation of the naira was primarily to blame for the loss, which was N41 billion lower than the N519.1 billion in its half-year results.
The revenue from services climbed by 33.6% to N2.4 trillion in spite of the economic challenges.
Additionally, as a result of telecom providers deregistering some Subscriber Identity Module (SIM) cards due to the NIN-SIM linking requirements, the total number of customers fell by 0.9% to 77.0 million.
The results showed that while active mobile money (MoMo PSB) wallets fell by 21.8% to 2.8 million, active data users rose by 5.1% to 45.3 million.
MTN Nigeria CEO reacts to report
In his remarks regarding the nine-month results, MTN Nigeria CEO Karl Toriola characterised the performance as "resilient" in spite of ongoing macroeconomic difficulties and regulatory obstacles.
“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.”
MTN buys bank for N16.35 billion
Legit.ng reported that In an effort to improve its standing in the financial services industry, MTN, the largest telecom company in Nigeria, paid N6.95 billion to acquire the remaining 7.17% minority stake in MoMo Payment Service Bank.
MTN Nigeria's unaudited financial statements for the nine months ending September 30, 2024, included information on the acquisition.
MoMo PSB's minority shareholders agreed to sell their shareholding to MTN in May, putting MTN's ownership of the bank closer to complete control.
Proofreading by Nkem Ikeke, journalist and copy editor at Legit.ng.
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