MTN Nigeria Communications continues to struggle against the country’s currency devaluation which was the main reason for the N514.9 billion (R5.5 million) loss after tax for the nine months to September 30, compared with a N4.1bn taxed profit in the same period a year before.
MTN Nigeria is a major subsidiary of the MTN Group and contributed about 35.1% of its parent’s revenue in 2023. However, in contrast with last year, some of the key operational performance indicators produced mixed results over the nine months.
Total subscribers decreased by 0.9% to 77 million, impacted by the NIN-SIM regulations.
While active data users increased by 5.1% to 45.3m, active mobile money (MoMo PSB) wallets decreased 21.8% to 2.8m. Service revenue, however, increased by a healthy 33.6% to N2.4 trillion.
This growth was led by data and supported by voice, fintech and digital services. Data usage per user grew by 31.2% to 11.3GB, supported by the rising demand for data and digital services, which had contributed to revenue growth.
MTN Nigeria CEO Karl Toriola said it was a “resilient performance” despite persistent macroeconomic pressures and regulatory challenges.
Overall, earnings before interest, tax, depreciation and amortisation (EBITDA) decreased by 5.3% to N860.2bn. The EBITDA margin decreased by 14.9 percentage points to 36.3%.
The renegotiated tower lease contracts with IHS Towers led to savings in operating expenses, which positively impacted the EBITDA margin by 2.3 percentage points.
Profit after tax (PAT) adjusted for the net foreign exchange loss was N118.5bn, down 59.2%. Earnings per share (EPS) was negative N24.51 kobo compared with a positive N5.65 kobo. Adjusted for the forex loss, EPS fell 59.2%. Positive free cash flow of N536.8bn represented an increase of 21.9%.
“We sustained the growth in our underlying operating performance – underpinned by our resilient business model and operational agility – despite challenging conditions,” said Toriola.
Over the nine months, the inflation rate in Nigeria had remained elevated amid rising energy prices and naira depreciation. Inflation averaged 32.8% compared to an average 24.5% in 2023.
To curb inflation, the Central Bank of Nigeria (CBN) increased the Monetary Policy Rate (MPR) by 8.5 percentage points to 27.25%, 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.
“We remain focused on enhancing operational efficiency and driving the growth of our commercial operations,” said Toriola.
He added that they remained engaged with the authorities through relevant industry bodies to address tariff increases.
Additionally, the naira closed at the Nigerian Autonomous Foreign Exchange Market (NAFEM) in September 2023 at N1 542/US$ (December 2023: N907/US$), exerting pressure on business activity.
An improvement in liquidity in the foreign exchange market had helped the group reduce its exposure to foreign currency-denominated obligations.
As part of its Project Zero initiatives, the group had launched the pilot phase of its biodegradable, eco-friendly, paper-based SIM cards.
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