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MTN Reports N167b Loss In Equity Over Naira Depreciation



MTN reports on forex

MTN Nigeria Plc faced a significant financial setback in its 2023 fiscal year, as revealed by its report released on the Nigeria Exchange Limited (NGX) on Friday. The company reported a staggering foreign exchange forex loss of N740 billion, resulting in a pre-tax loss of N177.8 billion compared to the previous year’s pre-tax profit of N518.8 billion.

The audited results for the year ended December 31, 2023, reflected a loss after tax amounting to N137 billion, a stark contrast to the restated Profit After Tax (PAT) of N348.7 billion reported in 2022. This downturn had a ripple effect on the company’s retained earnings and shareholders’ equity, reported at N208 billion and N40.8 billion respectively, as of December 2022 and 2023.

MTN attributed this financial decline primarily to the significant devaluation of the naira in 2023, resulting in a substantial net forex loss of N740.4 billion, compared to N81.8 billion in 2022. The company also cited changes in the Nigerian forex operations announced by the Central Bank of Nigeria on June 14, 2023, which led to a 96.7 percent movement in the exchange rate.

The drastic exchange rate movement impacted MTN’s operations, particularly its operating expenses and net finance costs, with tower lease costs comprising the bulk of its foreign currency exposure. Karl Toriola, CEO of MTN Nigeria, commented on the challenging operating environment characterized by rising inflation, currency devaluation, and forex shortages, compounded by geopolitical disruptions and cash shortages in Q1.

Despite these challenges, Toriola emphasized MTN’s commitment to investing in network infrastructure and enhancing operational efficiencies to meet the growing demand for data and expand coverage. He highlighted the company’s disciplined focus on value-based capital allocation and competitive propositions for customers as key strategies to navigate the turbulent economic landscape.

Toriola underscored the importance of mitigating the effects of inflation and fuel price hikes on operations, noting the company’s resilience and adaptability in the face of adversity. As MTN Nigeria navigates the complexities of the market, it remains steadfast in its commitment to delivering value to customers and stakeholders alike.

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